The European Space Agency and Norwegian Space Center state that one major aim of their space programs is to generate industrial growth in the form of synergies, spinoffs and spillovers. This thesis investigates whether these two institutions achieve this goal by studying the economic benefits Norwegian companies derive from participating in European Space Agency programs. Innovation theories are used as a theoretical framework and three possible ways ESA contracts generate economic growth are explored, with focus on capabilities as an important concept. Rosenberg`s theories of technology transfer, Teece, Pisano and Shuen`s theories of capability development, and Henderson & Cockburn`s theories of spillover are used throughout the work as important references.
The thesis employs a case study design, where it compares the experience five Norwegian space companies have had with European Space Agency programs. The companies studied acquired benefits in the form of technology transfer related to work methods and development of new capabilities, which were noted to have applications in other non space related areas. The thesis found a limited amount of evidence for spinoffs and spillovers to other companies and industrial sectors. It is important to note that the firms` existing capabilities were a determining factor for the utilization of the economic benefits of participating in the European Space Agency programs.