The Next Great Power Scramble Lies Right Over Our Heads

From balloons to high-altitude platforms, a new industry of competition is in the making; and just as cyberspace earlier, the governance vacuum is a looming threat.

The topic of world headlines in early 2023: the presence of a Chinese spy balloon flying over the USA skies. A day later, another shot down in Canada. Numerous observers at the time wrote off these as mere curiosities; abnormalities in an otherwise normal airspace. Turns out, these are far more than fleeting events to anyone following the historical trend of technological change and geopolitical tension. They are portents of new strategic rivalry which was still being played out in an unexpected place: the stratosphere.

This newly-open battleground, the gray zone between sovereign airspace and outer space, is set to become one of the most significant of the coming decade. And just like all the other disruptive technologies that came before it, innovation is going much faster than governance, putting regulation, business executives and international organizations at risk.

Stratosphere now?

High-Altitude Platform Systems (HAPS) along with High-Altitude Long Endurance (HALE) aviation are at the center of this paradigm change. Such platforms cannot be classified as planes and satellites. At the altitude of 12 to 18 kilometers, they can stay motionless and still all or a part of a day, even months, proving to be of persistent surveillance, communication and even electronic warfare abilities all at a tenth of the normal satellite costs.

This is a no-brainer to governments and companies alike. The systems are flexible to deploy, do not present large risks to human operators, and are freely accessible to communication and sensing abilities hitherto limited to the space environment. The remit of only a small number of costly military programs in the past, advances in artificial intelligence, lightweight materials, and low-cost components are rapidly democratizing this space.

The United States, for example, which long dominated this field through programs using the RQ-4 Global Hawk, is losing this hegemony now. Similar technologies have been introduced by China, Russia, as well as non-state actors. Russia too released a monitoring balloon into the stratosphere in 2023 over the Pacific. Lebanese Shia Islamist political party Hezbollah deployed loitering munitions carried by a balloon in 2024. The implication is obvious: what used to be experimental has today turned operational, and undoubtedly global.

The Issue of the Middle Way

The new band of altitude presents a regulatory issue. HAPS exist higher than conventional aviation law (including the Chicago Convention) but lower than the accords of outer space. The result? A legal no man land.

Countries are left alone to interpret the actions in this zone however they want since there are no common controls or means of enforcing any norms. A HAPS platform placed in stratospheric airspace can be considered harmless to one nation but offensive to another. A shoot-down measure might be conceived both as justifiable self-defense or an act of war. The ambiguity is not only a legal issue; it is a formula for miscalculation and escalation.

This is not new for business leaders. We have experienced that in cyberspace, in crypto markets, and even in the historical times of AI. Breakneck innovation generates value and at the same time, causes systematic risk unless there is clarity about the rules of the road. The stratosphere today is no exception to that script, and perhaps as crucial, with stakes as high as national security and global trade.

So,what is the relevance of some upper layer in the atmosphere to the board members and executives? The short answer: the fact that current strategic instability in the stratosphere might affect the supply chain, regional tensions, and fuel post-decoupling processes already transforming international markets. The operation of satellite alternatives such as HAPS may be crucial in communications, logistics, and disaster assistance, along with soon becoming a matter of economic and, therefore, military interest in governance.

In addition, the dual character of these technologies that may be civilian or commercial today and militarized tomorrow makes those very delicate. The network facilitating rural broadband in Africa can with different controls provide electronic warfare across disputed lands.

It seems like businesses are buying into such platforms – or using those that use them – so it is only logical that they must factor geopolitical risk in a manner that transcends conventional insurances or regulation. The question that must be asked is who dominates the regulatory discourse? Who is defining or molding the norms? And what will be the consequence when the mishap of an operational kind causes a diplomatic stand-off?

Towards a Stratospheric Framework

We are at the same turning point. The high seas, civil aviation and outer space have one thing in common and that is, like us, they once had to develop norms to govern them. It is high time to develop an architecture of governance, particularly given how soon the stratosphere is likely to become a high-consideration area.

This will not be a walk in the park. It involves the need to have multilateral coordination, the redefining of sovereignty, the consent on the rights and constraints of surveillance. Nevertheless, it is needed. The other alternative is a layer of sky that is getting more and more contested, where the potential of miscommunication (or a lack thereof) becoming the source of a conflict and strategic benefit that role may trigger a push to do so.

In an economic hemisphere, this represents an economy-book model of worldwide market failure. The personal gain of making use of such a territory is increasing, however, the shared dangers such as legal uncertainty, army folly, global accidents are being shifted to all the rest. Uncontrolled, the stratosphere will be another zero-sum game that destabilizes the world and economics at large.

So what should world leaders do next?

• Engage with policymakers: Companies that develop technology or aerospace products cannot be ignored when new laws are being designed – they are key stakeholders who need to be made part of the process in some capacity.
  
  
• Construct scenario plans: Near-space assets need to be accounted for in geopolitical forecasting. The price of neglecting this field is too big.
  
  
• Promote international cooperation: International industry-specific organizations ought to drive to some concursion in stratospheric activity, especially in dual-use situations.

The stratospheric scramble is well and truly underway, and leaders in both business and policymaking need to realize their decisions today will have very real outcomes tomorrow. The opportunity to shape rules for the future is open, but not for long.

Further reading: “Eyes in the Stratosphere: How Near-Space Surveillance Platforms Are Redefining Global Power Projection and Strategic Ambiguity” by Trends Research & Advisory, available here.