Russia's space industry comprises more than 100 companies and employs 250,000 people.^[3] Most of the companies are descendants of Soviet design bureau and state production companies. The industry entered a deep crisis following thedissolution of the Soviet Union, with its fullest effect occurring in the last years of the 1990s. Funding of the space program declined by 80% and the industry lost a large part of its work force before recovery began in the early 2000s. Many companies survived by creating joint-ventures with foreign firms and marketing their products abroad.

In the mid-2000s, as part of the general improvement in the economy, funding of the country's space program was substantially increased and a new ambitious federal space plan was introduced, resulting in a great boost to the industry. Its largest company isRKK Energiya, the main crewed space flight contractor. Leading launch vehicle producers areKhrunichev andTsSKB-Progress. The largest satellite developer isISS Reshetnev, whileNPO Lavochkin is the main developer of interplanetary probes.

As of 2013,^[update] a major reorganization of the Russian space industry is underway, with increased state supervision and involvement of the ostensibly private companies formed in the early 1990s following thedissolution of the Soviet Union.

The space industry of theSoviet Union was a formidable, capable and well-funded complex, which scored a number of great successes. Spending on thespace program peaked in 1989, when its budget totaled 6.9 billion rubles, amounting to 1.5% of the Soviet Union's gross domestic product.^[4] During theperestroika period of the late 1980s, the space program's funding began to decrease, and this was seriously accelerated by the economic hardships of the 1990s. TheRussian Federation inherited the major part of the infrastructure and companies of the Soviet program (while others, such asYuzhnoye Design Bureau, becameUkrainian), but found itself unable to continue the appropriate level of financing. By 1998, the space program's funding had been cut by 80%.

To coordinate the country's space activities, on 25 February 1992, theRussian Federal Space Agency was created. During Soviet times, there had been no central agency; instead, the design bureaus had been very powerful. To an extent, this continued during the first years of the agency, which suffered from a lack of authority while the design bureaus fought to survive in the difficult environment.^[5]

In 1993, the most prestigious program of the industry, theBuran space shuttle, was canceled. It had been worked on for 20 years by the industry's best companies, and the cancelation immediately resulted in a 30% reduction in the industry's work force. 300,000 people worked in the industry at the end of 1994,^[6] down from 400,000 in 1987,^[7] and the space program's funding now amounted to just 0.23% of the country's budget.^[6]

The final phase of the space program's contraction took place during the1998 Russian financial crisis. Much of the budgeted money never arrived at the companies. The space industry continued to shed work force, and soon only 100,000 people remained. Wages were also cut: for example at the leading rocket engine producerNPO Energomash, the average monthly salary during this time was 3,000 rubles ($104).^[8] The space industry's physical infrastructure declined greatly, and this was symbolised by a roof collapse in 2001 at theBaikonur Cosmodrome which destroyed the Buran shuttle which had flown the one and only flight of the program in 1988. No funds were available to look after the shuttle's hangar in Baikonur and it collapsed on the shuttle in May 2002.^[8]

During the crisis years, of the main ways for the industry's companies to survive was to look for foreign partnerships. In this respect,Khrunichev was particularly successful. On 15 April 1993 Khrunichev created the Lockheed-Khrunichev-Energia joint venture with the American companyLockheed. In 1995, due to the merger ofLockheed andMartin Marietta, it was transformed intoInternational Launch Services (ILS). The joint venture marketed launches on both theProton and the AmericanAtlas rockets. TheUnited States had given permission for the appearance of Proton on the international launch market, but introduced a quota to protect the launch market from "Russian dumping." Despite this, the Proton, built by Khrunichev, was successful and by the end of 2000 had earned launch contracts worth over $1.5 billion.^[9] Since 1994, the Proton has earned $4.3 billion for the Russian space industry as a whole, and in 2011 this figure is expected to raise to $6 billion.^[10]

Another successful company wasNPO Energomash, whose extremely powerfulRD-180 engine was installed on AmericanAtlas V rockets. The rocket's manufacturerLockheed Martin initially bought 101 RD-180 engines from Energomash, earning the company $1 billion in hard currency.^[11]

In the early 2000s, duringVladimir Putin's presidency, the Russian economy started recovering, growing more each year than in all of the previous decade. The funding outlook for Russia's space program started to look more favourable.

In 2001, the development of theGLONASS satellite navigation system was made a government priority with the introduction of a new Federal Targeted Program.^[12] The main contractor for GLONASS,NPO PM (later renamed ISS Reshetnev), thus received a boost in its finances. In total, 4.8 billion rubles was allocated for the space program in 2001, of which 1.6 billion was earmarked for GLONASS.^[13] By 2004, Russia's space spending had grown to 12 billion rubles. In 2005, a new strategy for the development of the country's space program, titled the Federal Space Plan 2006–2015, was approved. It stipulated the completion of theInternational Space Station, development of theAngara rocket family, introduction of a new crewed spacecraft and completion of the GLONASS constellation, among others.^[14]

In the mid-2000s, funding of the space program continued to improve substantially, amounting to 21.59 billion rubles in 2005 and rising to 23 billion rubles in 2006. In 2007, 24.4 billion rubles was spent on the civilian space program, while the military space program's budget was 11 billion rubles. The industry also continued to receive very substantial funds from exports and foreign partnerships.^[15]

As a result of a series of reliability problems, and proximate to the failure of a July 2013Proton M launch, a major reorganization of the Russian space industry was undertaken. TheUnited Rocket and Space Corporation was formed as ajoint-stock corporation by thegovernment in August 2013 to consolidate the Russianspace sector. Deputy Prime MinisterDmitry Rogozin said "the failure-prone space sector is so troubled that it needs state supervision to overcome its problems."^[16] Three days following the Proton M launch failure, the Russian government had announced that "extremely harsh measures" would be taken "and spell the end of the [Russian] space industry as we know it."^[17]

The largest company of Russia's space industry isRKK Energiya. It is the country's main human spaceflight contractor, the lead developer of theSoyuz-TMA andProgress spacecraft and the Russian end of theInternational Space Station. It employs around 22,000-30,000 people.^[18]Progress State Research and Production Rocket Space Center (TsSKB Progress) is the developer and producer of the famousSoyuz launch vehicle. TheSoyuz-FG version is used to launch crewed spacecraft, while the international joint-ventureStarsem markets commercial satellite launches on the other versions. TsSKB Progress is currently leading the development of a new launcher calledRus-M, which is to replace the Soyuz. Moscow-basedKhrunichev State Research and Production Space Center is one of the commercially most successful companies of the space industry. It is the developer of theProton-M rocket and theFregat upper stage. The company's newAngara rocket family is expected to be put into service 2013. The largest satellite manufacturer in Russia isISS Reshetnev (formerly called NPO PM). It is main contractor for theGLONASSsatellite navigation program and produces theEkspress series of communications satellites. The company is located inZheleznogorsk,Krasnoyarsk Krai, and employs around 6,500 people. The leading rocket engine company isNPO Energomash, designer and producer of the famousRD-180 engine. In electric spacecraft propulsion,OKB Fakel, located inKaliningrad Oblast, is one of the top companies.NPO Lavochkin is Russia's main planetary probe designer. It is responsible for the high-profileFobos-Grunt mission, Russia's first attempt at an interplanetary probe sinceMars 96.

• Progress Rocket Space Centre:Soyuz-2.1a/2.1b
• Khrunichev:Proton-M,Angara

A large experience gained by the Russian propulsion industry on all types of rocket engines but in particular in oxygen hydrocarbon propellant and staged combustion system.^[19]

• NPO Energomash
• Production Corporation Polyot
• KBKhA
• KBKhM
• JSC Kuznetsov
• Keldysh Research Center
• OKB Fakel
• NIIMash
• TsNIIMash
• Proton-PM
• Voronezh Mechanical Plant

• Energiya:Soyuz MS (crewed),Progress MS (cargo)

• NPO Lavochkin:Fobos-Grunt

• ISS Reshetnev:GLONASS,Express
• NPO Lavochkin:Elektro–L
• Gazprom Space Systems
• SPUTNIX
• DAURIA Aerospace
• Success Rockets

Critics claim that Proton rocket fuel (unsymmetrical dimethylhydrazine, UDMH) and debris created by Russia's space programme is poisoning areas of Russia andKazakhstan. Clusters of cancers have been found in theRepublic of Altai^[20] and residents claim thatacid rain falls after some launches.Anatoly Kuzin, deputy director of theKhrunichev State Research and Production Space Center, has denied these claims, saying: "We did special research into the issue. The level of acidity in the atmosphere is not affected by the rocket launches [and] there is no data to prove any link between the illnesses [in Altai] and the influence of rocket fuel components or space activity of any kind".^[20]

• Aircraft industry of Russia
• Defence industry of Russia
• Success Rockets — Russian private space company

• Harvey, Brian (2007).The Rebirth of the Russian Space Program (1st ed.). Germany: Springer.ISBN 978-0-387-71354-0.

• Economy of Russia
• Space industry
• Space industry companies of Russia
• Space program of Russia

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