As the commercial anchor of the space sector, the downstream sector plays an essential role in Europe where industry focuses mainly on application markets and where socio-economic considerations have become the main driver of space policy. The European approach to space has been shaped by the success of public strategies and private businesses on these commercial markets, from satellite manufacturing and launch services to the provision of space-based services. Yet, forces at play in the space sector are changing, challenging Europe to adapt its approach to new commercial realities in competition, innovation, and market fronts. In this new ecosystem, the space infrastructure is increasingly steered toward its function of enabler of commercial applications and public services. The emergence of integrated business models such as Space/Starlink is not only reshuffling the competition landscape but also changing the way space capabilities are being developed, exploited, and marketed, as part of a unified chain of activities optimized to deliver a service. This commoditization of the space infrastructure is, in part, the consequence of a new symbiosis between the space sector and the digital economy, where satellites are becoming a component of the broader digital infrastructure and where space-based data are mingled into the wider data value chain. Other trends are also nurturing a change of paradigm that is leading to a new kind of synergy between upstream space industry and downstream markets where space systems are becoming a technical means to a market end. While these trends are opening new opportunities for the European space sector, they are also raising serious challenges for private players to adapt to market shifts and international competition, and for public actors to foster new conditions for industrial and business development. Despite successful initiatives in Europe and major announcements at the recent Space Forum in Toulouse, the stakes remain high for Europe to find new ways to boost the development of the space sector and project it into a future governed by different dynamics. Ultimately, current developments are challenging the relevance and effectiveness of a space strategy focused principally on programs and industry, leaving aside applications and markets in the mists of an unclear objective of “maximizing the socio-economic benefits of space”. A change of mindset is necessary to ensure that development of the space sector answers not only to a logic of return on investment but fits with broader strategic and political concerns, from strategic autonomy to sustainable development.