Earth observation: A trillion-dollar opportunity for sustainable economic growth

The dual value of Earth data for commercial and public benefit

Considering the multitude of ways that measurements of Earth’s physical, chemical, biological, and anthropogenic (human) systems can be adapted to specific regions, industries, and organizational objectives, the depth and diversity of use cases for Earth observation are astonishing. However, the fundamental value proposition for Earth observation is simple: Better data can inform better decisions. As such, industry leaders can use Earth data to help make data-driven decisions to create innovative solutions, drive operational efficiencies, and better manage risks.

The result? Organizations that turn Earth data into insights can create significant value for business and sustainability goals alike.

As discussed in the study “Amplifying the global value of Earth observation,” nine functional, industry-agnostic categories can be used to define Earth observation’s uses (the study did not include common uses of Earth observation in defense, intelligence, and other national security applications). Each category listed below comprises a range of unique applications and diverse data sources.

1. Consumer experience: Providing individual users value through information such as air quality or weather forecasts.
2. Early warning: Detecting disasters—like floods and wildfires—with more speed and accuracy bolsters planning, response, and recovery.
3. Environmental impact monitoring: Providing a trusted, third-party source to measure environmental impacts and help verify certain environmental commitments and mandates.
4. Post-event analysis: Analyzing environmental changes to better direct emergency response and measure the extent of damages.
5. Precision agriculture and aquaculture: Enhancing regenerative practices, reducing input costs, and monitoring in-season performance and yield.
6. Route optimization: Optimizing transport routes in concert with GPS data by detecting potential environmental disruptions and offering alternatives based on environmental impact.
7. Site selection: Identifying operational sites for large-scale infrastructure with the best yield, efficiency, and relative environmental impact.
8. Supply chain monitoring: Detecting changes to physical goods supply chains and their impacts on international commerce and ecological indicators.
9. Vulnerability analysis: Characterizing and assessing the risks posed by climate and nature changes and other hazards that may materially impact people, infrastructure, and operations.

The kind of benefits derived from Earth observation depends largely on the end users’ motives in each application. In general, these motives fall on a spectrum from purely public benefits to purely commercial benefits (figure 1). The former is a typical focus for the public sector and civil society (including academic and nonprofit organizations). The latter is primarily the focus of private industry. 

A proven tool for the public good

The use of Earth observation for public benefit traces back to its genesis. Since the first satellites were launched during the Cold War, many remote sensing satellites have served defense and surveillance purposes—applications that continue to dominate demand. However, Earth observation also plays a valuable role in civil government and public health, with examples ranging from local science studies to global policy interventions worldwide. For instance, in Australia, Earth observation has proven to be an effective tool in bolstering efforts to restore the Great Barrier Reef.¹ Meanwhile, in the United States, NASA-backed environmental justice programs are using new hyperspectral and high-resolution data to tackle policy questions at the confluence of climate risks, environmental conditions, and socioeconomics.²

A growing case for commercial benefit

From a purely commercial standpoint, Earth observation can be a valuable tool to increase business performance by enabling data-driven decisions that help minimize risk or drive operational efficiencies. To date, this has benefitted tech-ready industries such as insurance, financial services, mining, oil and gas, and industrialized agriculture. The ability to remotely monitor geographically dispersed land and infrastructure is a core value proposition for these industries. For example, insurance companies use remotely sensed data to better assess risks to covered assets, offer parametric insurance products, and unlock efficiencies in evaluating claims.³

Earth observation data can also be used to enhance top-line growth, such as infusing Earth observation data into products and services to help create new and innovative offerings. Common mapping and navigation apps are pervasive examples where satellite imagery is front and center, but Earth observation insights can also be infused in less visible ways to create differentiated experiences. Consumer-focused apps like onX and Strava are built around recreational activities and combine location data with Earth observation data to help people stay safe and maximize their time spent on the activities.⁴

A global opportunity for sustainable development

Between the poles of purely public or commercial interests lies a promising intersection where motives and benefits align. This is partly driven by the private industry’s increasing focus on mitigating climate risks and measuring success by its triple bottom line—positive financial, social, and environmental returns. However, government and civil society organizations can also drive dual value, and the collective opportunity is substantial.

Looking bottom up at the economic and environmental benefits of Earth observation reveals a striking result—by 2030, over US$550 billion in economic value associated with downstream uses of Earth observation could be tied to applications with sustainability benefits. This represents nearly 80% of the total global value added by the technology at that time (figure 2).⁵

Examples of applications with dual benefits include:

• Natural capital protection: Satellite-based remote sensing can monitor the health and vulnerabilities of vital natural capital such as forests, mangroves, and other ecosystems. In turn, data-driven insights inform policies and strategies to aid in protection, recovery, and restoration.
• Climate change adaptation: Modeling the effects of hazards linked to climate change (such as floods, droughts, and wildfires) is a critical tool in proactively addressing physical risks. Nearly all sectors can benefit by reducing financial exposure; at the same time, adaptation strategies can improve outcomes for ecological and societal well-being.
• Emissions monitoring and mitigation: Spotting planet-warming emissions faster and more accurately is a key enabler for interventions to prevent them. For oil and gas companies, fixing leaks means saving products, which can offer a financial incentive while reducing emissions.

The dual-value potential inherent to these examples can also be expressed in their alignment with the United Nations sustainable development goals (SDG). For example, natural capital protection, adaptation, and mitigation have intersections with the SDGs for climate action (SDG 13) and life below water and on land (SDGs 14 and 15) while also helping improve economic livelihood by supporting affordable and clean energy (SDG 7) and sustainable cities and communities (SDG 11).⁶

Cross-sector strategies to help unlock Earth observation’s potential for sustainable development

What’s exciting is not just the scale of sustainability impact made possible through Earth insights but also the window of opportunity created when motives align to capture its potential. The growing urgency to address climate change and environmental degradation is driving action in the public and private sectors alike. In theory, using Earth observation to support sustainable development is as much an opportunity to grow the Earth observation industry as it is a vital strategy to drive favorable economic, social, and environmental outcomes worldwide.

Although the Earth observation ecosystem is showing promising trends and gaining momentum, further progress is needed to fully harness the potential of Earth data for sustainable economic growth. The following strategies seek to build on the current momentum in the Earth observation market and offer avenues to overcome some of the challenges limiting its adoption and impact:

• Expanding the reach of Earth data and insights to enable increased global adoption.
• Cocreating solutions with end users to maximize Earth observation’s positive societal impact.
• Positioning Earth observation as a principal data source for environmental disclosures to help meet regulatory requirements.
• Focusing on the government’s influence as a buyer to invest in scalable commercial services.

No one organization—or sector, for that matter—can drive systems-level changes like these alone. Collective action is needed across sectors and industries throughout the Earth observation ecosystem. The government’s long history in satellite remote sensing, substantial physical and programmatic infrastructure, policy and regulatory levers, and dominant buying power relative to commercial demand put the public sector in the driver’s seat for many of the possible interventions. In parallel, continued innovation is needed across the commercial Earth observation industry, from large satellite operators and data platforms to bespoke analytics providers and consultancies. Finally, civil society organizations will likely continue to play a crucial role in the research, development, and delivery of Earth observation technologies and solutions.

Building on momentum from the past decade of advancements, these stakeholders play a crucial role in helping to push technological boundaries and create scientific and business solutions for a more diverse market of downstream users.

Below are some possible roles of each sector in advancing these four strategies.

Expanding the reach of Earth data and insights

Increasing the use of Earth observation data across the range of downstream industry applications isn’t a simple task, but it does require meeting a few simple conditions: Prospective users should have equitable access to Earth data, be aware of relevant applications, be able to validate their business case, and face minimal friction when interacting with Earth data.

Equitable access

In terms of equitable access, government agencies already play a foundational role upstream, whereby programs like NASA’s Earthdata and the European Space Agency’s Earth Online provide free access to thousands of data sets. Platforms like Amazon Open Data, Esri ArcGIS Online, Google Earth Engine, Microsoft’s Planetary Computer, and many others make Earth observation data and analytic tools publicly available, supporting research and technology development as well as ultimately expanding the impact and applications of these critical data sets. Continued support for these programs and others like them around the world is critical for democratizing access to remotely sensed Earth data.

Equitable access can also be driven by organizations moving from data to insights, thereby equipping users without specialized geospatial backgrounds to take action. The work of nonprofit and philanthropic organizations is crucial in this domain. Take Digital Earth Africa, for example, which is working to translate freely available Earth observation data into useful information and services to address challenges in food, water, and economic security for the continent. But deriving insights and making them actionable entails a variety of complex “last mile” challenges. As such, scaling their impact takes outreach, partnerships, and services targeted at the unique challenges faced by different communities.⁷

Awareness and validation

A lack of awareness of industry-specific and function-specific applications has also been cited by many in the Earth observation industry as a continuing barrier to activating commercial demand. The tide may be shifting today, but even as executives become aware of Earth observation’s potential benefits, they still must vet and prove the business case for using it. As such, there’s a need to not only educate end users about known use cases but also to advance the evidence base on the business case economics of specific Earth observation applications for sustainable development. Voices from multiple sectors and disciplines are key to reaching broad audiences and providing a balanced perspective for both objectives.

Reducing technical friction

Another general barrier to mainstream adoption is the technical complexity of working with Earth data, partly due to a landscape of fragmented standards and a marketplace for Earth observation data and services that can be difficult to navigate. Addressing these challenges from within the Earth observation ecosystem can help reduce the friction experienced by users.

The open-source community has already made significant strides in developing standards, including SpatioTemporal Asset Catalogs and Committee on Earth Observation Satellites Analysis Ready Data, which aim to ensure interoperability and maximize the value of geospatial data. However, while there has been substantial adoption from major industry players, more work is needed across the Earth observation ecosystem to establish consistent definitions, build consensus, and increase the adoption of open standards.

To help address some of the challenges in navigating the Earth observation marketplace, there is a continuing need for innovative new services and business models to streamline how end users interact with Earth data. Drawing on human-centered design approaches and emerging foundation models that deepen the capabilities of AI-enabled solutions can help offer end users actionable insights rather than a quagmire of complicated data. Consultancies and other intermediaries can help amplify the reach and uptake of Earth observation data by translating capabilities into solutions tailored to their client’s unique challenges. In doing so, these intermediary players can lower barriers to adoption.

Cocreating solutions with end users

Programs like Copernicus in the European Union⁸ and Landsat in the United States⁹ are well known for their heritage in satellite-based remote sensing. Yet, they are only the tip of the iceberg in terms of government investments in Earth insights on the global stage. The uptake of Earth observation among government organizations is among the highest relative to other industries (approximately half of government organizations are estimated to use the technology as of 2023).¹⁰ Their decades-long investments have resulted in programs that now offer valuable data, tools, and services for applications in agriculture, transportation, disaster management, and more.

Return on investment from these public sector programs typically depends on user adoption since even the best information is practically worthless if not used. That’s why it is important for governments to continuously activate users in downstream roles across government, civil society, private industry, and the public.

Engaging directly with users, prototyping, testing often, and creating tailored experiences are all principles of human-centered design that programs can follow to build compelling solutions for their constituents. These principles can be seen in action across several US government agencies. For example, collaboration is a core component of the Federal Emergency Management Agency’s Risk Mapping, Assessment, and Planning program. The organization is responsible for mapping the flood risks in the United States, and the program focuses expressly on community engagement to empower people to take data-driven actions to achieve resiliency.¹¹ Similarly, the National Oceanic and Atmospheric Association has allocated billions of dollars to strengthen climate resilience and adaptation, including an Industry Proving Grounds initiative to better serve the identified private industries.¹²

Not only do these and similar programs help strengthen public sector products and services, but they can also support technology and knowledge transfer. After all, long-running government investments have built institutional value within their collective systems and knowledge bases. Consortia, conferences, industry days, and other avenues for cocreation can foster a healthy cross-pollination of ideas across the Earth observation ecosystem and with end users.

Positioning Earth observation as a principal data source for environmental disclosures

Around the world, environmental, social, and governance standards are advancing from elective to directive. There are many examples, and the landscape is evolving quickly. In March 2024, the US Securities and Exchange Commission approved regulations that will require disclosing climate-related risks and emissions (pending appeals as of June 2024).¹³ Across the Atlantic, the EU Corporate Sustainability Reporting Directive mandates climate disclosures for companies listed on EU-regulated markets beginning in 2024.¹⁴ Building on the International Sustainability Standards Board’s adoption of the Task Force on Climate-related Financial Disclosures recommendations, the Australian Treasury is working to implement standardized climate-related risk disclosures that are expected to be fully implemented by 2028.¹⁵

Access to objective, repeatable data is key to meeting these requirements. In principle, Earth observation can fit the bill. However, environmental standards and disclosure requirements tend to focus more on what to measure than how to do so. The lack of broadly accepted standards that align Earth observation measurements with these requirements may be holding back the technology’s potential. This leaves the adoption of Earth observation for environmental disclosures and carbon accounting to a fragmented landscape of technologies and approaches.

Organizations are working to address this barrier, and many have made noteworthy progress to date. For example, the US Department of Agriculture has acknowledged the opportunity for Earth observation—and remote sensing in particular—to improve the monitoring of greenhouse gases and has proposed frameworks to close the gap.¹⁶ Similarly, the United Nations initiative on Global Geospatial Information Management has made strides in defining methods for using Earth observation and broader geospatial techniques to track progress on sustainable development goals.¹⁷

However, these efforts have yet to culminate in standards and methods that are broadly accepted and practically applicable. They also do not directly address the mandates with the greatest commercial incentives for adoption (for example, the US Securities and Exchange Commission ruling, EU Corporate Sustainability Reporting Directive, and others). As a result, there is still an opportunity for greater collaboration across the Earth observation industry to align on standards and methods to fulfill regional and global environmental commitments and frameworks if Earth observation data will be able to capitalize on these driving forces for growth. 

Focusing the government’s influence as a buyer

Today, government spending accounts for almost three-quarters of the Earth observation data and services market.¹⁸ Meanwhile, the perceived “latent” commercial industry demand for Earth observation has yet to reach its full potential. That is not to suggest strong public sector demand is a bad thing—quite the contrary. It has led to countless success stories for Earth observation and has been a driving force in helping to create the commercial satellite remote sensing industry. But, the heavy concentration of demand in the public sector can have potential drawbacks.

For instance, the public sector alone likely cannot maximize the value of Earth observation data. And as Earth observation companies continue to focus their services on government buyers, investment in the commercial segment of downstream users may lag, leaving sustainability benefits on the table. The heavy concentration of demand within the commercial remote sensing industry may also add market-level risk. As such, strengthening the commercial demand segment for dual-value applications may help amplify technology’s sustainability benefits while also adding resilience to the overall Earth observation market.

Innovation is likely needed in AI-enabled solutions and other areas that allow business models to scale within and across industry verticals to help boost the commercial segment’ viability. Fortunately, the government’s position as the largest buyer of Earth observation data and services also positions it to shape innovation in the industry. By assessing the gaps in scaling commercial, dual-value applications for Earth observation and then mapping gaps against procurement needs, agencies could tailor their acquisition strategies to fill cross-industry or cross-functional needs in the market.

Specific opportunities will likely vary depending on agencies’ missions and other factors, but a general shift from buying data to buying insights and derived products may support development within the midstream of the Earth observation value chain, thereby unlocking more downstream opportunities. In effect, such a change would also shift from direct to indirect support of the commercial remote sensing industry and could make the entire value chain more robust. A similar approach can be seen in the funding set aside by the Canadian Space Agency to support the development of new Earth observation applications and to deliver on its goal to support jobs along the entire Earth observation value chain.¹⁹

Earth observation: A catalyst for economic growth and sustainable development

By 2030, Earth data insights could help add over US$700 billion to global GDP, support material reductions in greenhouse gas emissions, and boost other sustainable development goals. These potential outcomes are a strong case for greater adoption of Earth observation among downstream users, especially in the private sector. Fortunately, promising trends like the convergence of AI-enabled solutions with Earth observation and the increasing imperative for sustainable transformation point to a potential window of opportunity to expand the technology’s impact. To harness the positive momentum, the Earth observation ecosystem can continue to invest and innovate along the entire spectrum from commercial to public interests, but there is a unique set of opportunities where those interests align.

Today’s Earth observation ecosystem includes a strong foundation of public sector capabilities, a vibrant landscape of civil society organizations, and a growing, innovative mix of private sector Earth observation companies. Collaborative action across the value chain is already underway, and additional focus on remaining barriers can help fulfil the dual-value potential of Earth observation. By increasing awareness of what is possible with Earth observation, removing technical and operational barriers, collaboratively engaging with end users, and fostering innovation to create compelling solutions, this ecosystem can help position Earth observation to shape a more sustainable and prosperous future for coming generations.