International Launch Services, a U.S.-Russian joint venture, is expected to launch a Russian Proton-M rocket from the Baikonur Cosmodrome in Kazakhstan in late September or early October, making it the first Proton-M rocket to be launched since one exploded shortly after liftoff in July. The rocket had been scheduled for a launch in mid-September was postponed due to a technical issue. While a successful launch would not remove all concerns surrounding the reliability of the Proton-M and other Russian rockets, another failure could be disastrous.
Over the past few years, Russia's space industry has been plagued by launch failures and other problems due to an overreliance on outdated Soviet technology and quality control shortfalls. Despite this, Russia has emerged as the world's leader in commercial payload launches — accounting for nearly half of all launches — and taken over manned missions for NASA to the International Space Station. However, the continued growth of the U.S. space industry is threatening Russia's dominance, forcing Moscow to take initial steps to reform the industry.
The space industry is important to Russia for two main reasons: First and foremost, it is a strategic resource for the Russian military. For example, the payload for the doomed Proton-M launch in July was three GLONASS navigation satellites — Russia's alternative to the United States' GPS. While such a service has civilian applications, it also aids the military by providing more accurate targeting and navigation information.
Second, the industry has economic importance, since Russia is responsible for about 40 percent of worldwide orbital launches each year. The size of the global space industry is now close to $500 billion, though much of the recent increase in value has been in communication and navigation technology, areas where Russia has not partnered with drivers in the industry internationally. Instead, Russia has become the dominant launch service for these platforms. Nonetheless, Russia is not integrated with the operation of satellites in orbit, so its value to the international space industry is dependent on its ability to successfully launch spacecraft.
Since 2010, Russia has had numerous rocket failures, including four involving the Proton-M, hurting the country's competitiveness in commercial spaceflight. International Launch Services, the company behind the Proton-M launches, has had to reduce its price due to increased insurance premiums and concerns about the reliability of the Proton-M launches. The pervading problem with the industry has been that most of the technology has not significantly evolved since the fall of the Soviet Union. For instance, the Proton-M's first stage has only been moderately upgraded since its original inception in 1965 and was the cause of the July 2013 explosion.
Most of the other Proton-M rocket failures have been caused by one of the common secondary rockets, the Briz-M, that was introduced in 2000 but has developed a reputation for unreliability. This highlights another problem that Russia has faced: the advanced age of its space industry workforce. The average age of a worker in the industry is about 45, and the average age of one with a doctorate is about 60, meaning that the space industry will experience a demographic crunch within the next five to 10 years. Moreover, Russia has not cultivated a younger aerospace workforce or one that is entrepreneurial like the one in the United States. Numerous experienced cosmonauts have been leaving for more lucrative industries, as seen by cosmonaut Yury Lonchakov's recent resignation to take a job with Russian energy giant Gazprom.
The uncertain future of Russia's space industry has brought added scrutiny to the next launch of the heavy-lift Proton-M rocket, in light of the failure in July. While a successful launch would not erase all concerns about its reliability, another failure would be disastrous for its reputation and push other companies to launch their satellites and other payloads with competitors. However, it is important to note that the unreliability of the Proton-M has not affected the Soyuz rocket family — the most frequently used rocket in history, which handles Russia's manned space flights to the International Space Station. Still, the Russian space industry's future is heavily tied to the Proton-M, which is already the world's second-busiest commercial launch rocket and Russia's most powerful launch vehicle.
Even as Russia deals with these problems, Russia's competitors have not slowed down. The private space industry in the United States is focusing on reducing lifting costs and developing powerful commercial rockets. This has the potential to affect Russia's market share in the future if the reliability concerns are not abated and Moscow cannot reinvigorate its domestic space industry.
The move in the United States toward a public-private model for the space industry, coupled with Russia's internal problems, is causing Moscow to reconsider the organization of its own space program. Following the breakup of the Soviet Union, the Russian industry was partly privatized, with its research and development being undertaken by private companies in which Moscow retained some ownership.
On Sept. 4, Russian Deputy Prime Minister Dmitri Rogozin announced the details on a renationalization plan that was hinted at immediately following the Proton-M's latest failure. Moscow will create a joint-stock corporation, United Rocket and Space Corporation, that will be initially 100-percent owned by Moscow and controlled by the Russian Space Agency. Within one year, nearly the entire Russian space industry will be consolidated under this corporation, containing 33 enterprises.
By bringing its space industry back under Moscow's close control, Russia is essentially taking the opposite approach of the United States.
The effort is aimed at increasing oversight and efficiency in the industry, but there are factors that could limit its success. Because the industry was only partially privatized initially, reconsolidation and nationalization may not help matters much. The government already largely owns most of the companies. However, increasing efficiency by removing redundancies and improving coordination among the companies could be beneficial. Yet the biggest problem — the dwindling amount of human capital in the industry — is one that cannot be remedied by the space industry itself but instead will depend on Russia's education and incentive programs, as well as its demographic profile.
Regardless, Russia is moving forward with several ambitious projects, largely at the behest of President Vladimir Putin. The first is the construction of the Vostochny Cosmodrome in southeastern Russia, which the government hopes will be complete by 2018. Currently, all of Russia's manned and most of its commercial launches take place in Kazakhstan, and Moscow has been planning to develop a launch facility in Russia with the same capabilities since dissolution of the Soviet Union. The second is the Angara rocket family, expected to replace the Proton-M and several other Russian rockets, which will be launched primarily at the Vostochny Cosmodrome. In addition, the Angara-7 rocket will be more powerful than any other active Russian rocket. Yet, the Angara rocket family has been in development since 1995, and it is too early to predict whether it will prove more effective than the Proton-M. The first launch is currently scheduled for mid-2014, although this could be delayed.
The challenge for Russia will come not only from competition in the United States but also the declining number of sufficiently educated workers available for the Russian space industry. By bringing its space industry back under Moscow's close control, Russia is essentially taking the opposite approach of the United States, which is moving to privatize its space industry as a way to lower costs and improve results. Both strategies have their advantages. Historically national space programs have fared far better, largely due to the amount of capital available to them and their proximity to military applications, but it remains to be seen if this will remain true in the future.
This is the second installment of a two-part series on the evolution of the U.S. and Russian space industries.