On Friday 06.11.2020, Space Iceland had a short meeting with the Althing budget committee to discuss our review of the 2021 budget. Space Iceland would like to thank the committee for its gracious invitation. Space Iceland declared support for added support for innovation and basic research at the meeting. As always we support every effort on that line. However, the budget does not go far enough.
At the meeting, we emphasised our view that the budget does not adequately address the economic impact of COVID19 nor does the budget come close to being the statement and action plan needed to maintain welfare, target job creation or bet on future growth and nurture innovation.
A particularly troubling fact is that despite the rhetoric of increase in government spending, emphasis on innovation and economic resilience, the numbers do not reflect a strong enough connection between political rhetoric and tangible actions. Although the government claims massive increases in public spending, unfortunately, that is not the case. The state budget does indeed increase state spending and investment. This, however, is completely undone by an imposed austerity at the municipal level. Taking this into effect, an increase in public investment in 2021 is only around two billion ISK (US unit = thousand million) or 0,06% gross domestic product. A fact that is not only alarming but will have disastrous consequences.
Adding to this a legacy of severe underfinancing of basic research and innovation that despite a planned increase in the 2021 budget does not even reach the need during good times let alone should innovation become a driving force for economic growth. Space Iceland fears we will see a greater loss of talent over the next five years. For space derived research and development, Iceland is faced with fierce competition particularly from Europe in the form of greater market access through membership of the European Space Agency, a network of funding and support, ESA business solutions, government-financed startup loans, access to basic research, and developed legal framework and coordinated space policy. Space Iceland used this opportunity to emphasize our support for Iceland’s participation in Horizon Europe, and it’s benefits for Iceland. For every ISK spent by Iceland, we have seen a twenty-fold return on investment.
Despite Iceland’s strength and talent Space Iceland used the opportunity to point out what is on offer elsewhere and why space derived innovation is the focus of most of our neighbouring states. This is to give overview of the competition we are faced with but also to demonstrate the opportunities at our disposal for international cooperation. Like always Space Iceland urged Althing to follow through and prioritise it’s 2016 resolution for Iceland to join ESA.
Althing Committee meetings are confidential. We have provided some overview of the meeting here but cannot provide further detail than our review, which is public.