(MENAFN– Speech) The Ariane 6 project, Europe’s new space launcher, is making headlines at a time when the European Space Agency (ESA) and ArianeGroup are pushing for a first launch in 2024. This high-profile initiative has faced delays but remains a cornerstone of Europe’s ambitions in space. The project is an important example of public-private collaboration, in which ESA as well as private sector partners play an important role.

Designed to compete with SpaceX’s Falcon 9, Ariane 6 aims to provide a competitive advantage in the commercial launch market. The project underscores Europe’s broader strategy to maintain its place in the global space race. While ESA provides the necessary funding and oversight, a network of companies and subcontractors such as ArianeGroup, Airbus Defense and Space, Safran, and others promote the technological innovation necessary for success. This balance between collaboration and competition among stakeholders is known as “co-competition,” a common dynamic in public-private projects.

Collaboration: a double-edged sword

Cooperation combines cooperation and competition. In projects like Ariane 6, companies that are often fierce competitors in the market must collaborate to achieve common goals. As the public authority, ESA helps manage the project, but private companies often have different, sometimes conflicting, objectives.

Research shows that co-opetition can accelerate innovation by combining the strengths of collaboration, such as resource sharing, with the benefits of competition, such as efficiency and rapid decision-making. However, this setup also creates tension. Competing priorities can threaten progress on high-risk initiatives by leading to conflicts, coordination difficulties, and even project paralysis.

Governance: the key to managing common competition

Given the high social, economic and political risks, failure is not an option for public-private projects. Effective governance is critical to managing collaborative competition and resolving its inherent tensions. Our recent research on interorganizational strategy shows that project governance is essential for balancing collaboration and competition throughout a project’s lifecycle.

The first generation of the Galileo satellite project, Europe’s effort to develop its own satellite navigation system, offers valuable insight into how management can drive joint competition. Like Ariane 6, Galileo brought together major players of the European space industry, including both private and public stakeholders, who had to collaborate but also pursue different goals. Alcatel Space Industries, Alenia Spazio, Astrium GmbH, Astrum Ltd. and competitors such as Galileo Sistemas y Servicios collaborated with each other to produce Galileo satellites while maintaining fierce competition in the market.

The project’s navigation system was based on the integration of components developed by different manufacturers. To ensure a seamless integration, these manufacturers regularly exchanged information on components and system architecture. They also collaborated with the public sector (led by ESA), bringing together complementary technological know-how and financing capacities. Simultaneously, the public and private sectors competed to control resource use. While the ESA encouraged the use of resources for social value, corporations also sought profit. Everyone agreed that the project was of extremely strategic, military and economic importance for Europe.

But there were critical tensions among Galileo’s stakeholders. The public and private sectors were the first to advocate different models of value creation, which we define as “value tensions”. For example, ESA aimed to create social value for European citizens with a unique satellite positioning system and a commercialized service model. But satellite manufacturers, focused on profitability and competitiveness, doubted the long-term viability of the model for the industry. Space manufacturers also faced tensions as they pooled know-how for Galileo and competed outside it. Such tensions are “information tensions,” which refer to the need to balance between sharing critical information and trying to protect it. Effective management of these tensions was vital for Galileo’s operations to be successful.

Lessons from Galileo

The Galileo project demonstrated that governance structures can make or break a collaborative enterprise. Our research found that centralized government led by a primary public actor can be more effective than decentralized management models. At the end of the study period, we identified an approach (lead organization management) that combines contractual and relational mechanisms to prevent competition and enhance cooperation. We have seen that in a decentralized governance structure, two common competitive relationships, between industry competitors and between the public agency and the consortium, are managed separately. As a result, a unique mix of governance mechanisms was used in each relationship. This was problematic because the mechanisms used to manage relationships focused on either cooperation or competition rather than focusing on both simultaneously.

A dual management strategy that encourages collaboration while managing competition between stakeholders is crucial. For example, in bilateral governance, contractual mechanisms (formal agreements, open resource allocation) and relational mechanisms (trust building, informal networks) complement each other. We find that contractual mechanisms are particularly effective in curbing competitive behavior, while relational mechanisms encourage cooperative behavior. The combination of mechanisms helped achieve balance.

Our study also showed that when governance is inadequate, tensions can increase. In order to increase cooperation in the Galileo project, priority was given to relationship mechanisms between satellite manufacturers. However, although robust contractual protections are vital when direct competitors cooperate, the contractual protections put in place were inadequate, leading to information tensions.

Our analysis also showed that over-reliance on contractual mechanisms to the detriment of informal relationship mechanisms hinders mutual understanding and stifles collaboration between the utility and satellite manufacturers. This over-dependence has emphasized rather than resolved competing goals of value creation, leading to increased perceptions of opportunism.

Interestingly, the same tensions often lead to adjustments in governance structures, particularly in terms of mechanisms (from contractual or relational to a combination of the two), objectives (from cooperation or competition to a collaborative orientation), and form of governance (from decentralized to governance). . leading governance).

This means that a dynamic and flexible approach to project management is required, as mutual competition forces stakeholders to rethink and reorganize how they manage the project as it progresses. After all, governance and collaborative competition in public-private projects evolve together and require ongoing attention throughout the project’s lifecycle.

Implications for future projects

These insights are particularly relevant to managing long-term, complex commitments. As second-generation Galileo satellites enter production, relationships between stakeholders will continue to evolve and require adaptive management to maintain the balance between cooperation and competition. By understanding and managing shared competition through dynamic governance, public and private stakeholders can foster innovation while minimizing conflicts that can derail critical projects.

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