For a century, we humans have been exploring space, and our activities there have produced many benefits that improve life here on Earth (1).
When we design satellites to study the space environment, we improve our critical knowledge and capabilities for developing telecommunication and global positioning. It also allows us to advance the technology we use on the surface. And the advances we make to overcome the challenges of space exploration have delivered high returns throughout history (2).
From touching the sun’s surface (3) to the launch of the James Webb telescope (4), there have been a lot of activities going on in space. In this post, we will discuss stemming opportunities from space exploration for startups and businesses.
The Commercial Space Industry and Global Space Economy
It has been sixty years since a human first traveled to space, and we have discovered a lot about the universe in those past six decades. At the same time, as we discussed, it has also delivered many practical benefits back on Earth.
Be it monitoring climate change or connecting people satellites, we have built solutions for problems here on Earth with the technology we created for space exploration.
Today, space technology has become a vital part of our lives and the global economy (5).
According to data from the World Economic Forum’s brief paper on six ways space technologies benefit lives on Earth released in 2020 (6), space technologies account for more than 366 billion USD of economic activity every year.
Another report from the Space Foundation (7), “The Space Report 2021 Q2,” says,
“In 2020, the global space economy increased to 447 billion USD, an increase of 4.4% from a revised total of 428 billion USD in 2019. The 447 billion USD economy is 55% higher than ten years ago and part of a five-year trend of uninterrupted growth. There has been a 6.6% increase in commercial space activity, accounting for about 357 billion USD in 2020. It represents about 80% of the total space economy. There has been a 1.2% drop in the global government space spending last year to 90.2 billion USD from a revised peak of 91.4 billion USD in 2019. Notably, almost 58% of it was allocated by the United States.”
According to a report from Statista on turnover of the global space economy from 2009 to 2020 (8), the turnover of the space economy worldwide was about 446.9 billion USD last year, an increase from 428 billion USD in 2019. As per the report, the essential sector in the industry is commercial space products and services, which accounts for almost 50% of the total turnover in 2020.
In addition, despite the coronavirus pandemic, the government expenditure on space exploration programs globally has been increased. Last year, it amounted to over 82.5 million USD, an increase of about 16.5% compared to 2019, with the US being the leading spender.
Space agencies have also gained significant importance over the past decades. Since its establishment back in 1958, NASA, National Aeronautics, and Space Administration have become the most important space agency worldwide. This year, NASA received a budget of over 23.3 billion USD, from which about 60% will go to the science and exploration sectors.
Even India has started pumping big money to its space agency, the ISRO, Indian Space Research Organization, to transform its “second space age” with its space startups (9) (Suggested Reading: India’s Bid to be a Global Leader in Spacetech).
The Space Economy Continues to Boom
Even though there is no shortage of hype for the commercial space industry, in a way, the space economy has always been local. It was only last year when we crossed an important threshold. For the first time in human history, humans entered space via a spacecraft designed and owned by a private company, not some government agency, to establish cheap space settlements.
It was the first major step toward establishing a space economy and a space economy for space. It’s difficult to overestimate the ramifications for business, legislation, and society at large.
In 2019, over 95% of the almost 366 billion USD revenue earned in the space industry was from the space-for-earth economy, products, or services made in space for use on Earth (10). It includes infrastructure for the internet and telecommunications, national security satellites, planet observation capabilities, and much more.
In short, the space economy is booming, and its projections are optimistic (11).
Furthermore, the entry of private players like SpaceX has led to decreasing costs for space launch and hardware, which have enticed new and even smaller entrants into this market (Suggested Reading: Elon Musk’s Starlink India Launch Hype, Space Billboards: A “Bright” New Marketing Tool or A Threat to Humanity?).
Notably, companies from various industries have already started to leverage satellite technology and space access to drive efficiency and innovation to their Earth-bound offerings.
In contrast, the space-for-space economy, which includes products and services made in space like mining the Moon or asteroids for materials to construct in-space habitats, is struggling to gain momentum.
As far back as in the 1970s, NASA commissioned research that predicted the rise of a space-based economy. It predicted the rise of a space-based economy that would supply the demands of hundreds or even millions of humans living in space. And that it would dwarf the space-for-earth economy and ultimately the entire terrestrial economy.
However, the realization of such a vision never happened since we have never had more than thirteen people in space at once (12). So far, the dream has been nothing more than science fiction.
If we realize the vision, it can change how we do business, live our lives and run society (Suggested reading: Solarpunk: An Intriguing, Optimistic Subculture on the Rise).
And we the rise of efforts and achievements by private players like SpaceX, Virgin Galactic, Blue Origin, and Boeing to put people in space with scale and sustainability, we now have a reason to believe that we may be at the initial stage of a real space-for-space economy (13). Their entry, in other words, has marked the opening of a new chapter in spaceflight.
Private firms have the capacity and intention to bring private citizens to space as tourists, passengers, and eventually settlers. It has opened windows for businesses to meet the demand of those individuals building over the next several decades with various space-for-space offerings.
As per a publication by Harvard Business School (14), examining the model of centralized government-directed human activity in space since the 1960s over the past twenty years has paved the way for a new model. In this new method, public initiatives in space share the stage with private priorities.
Ultimately, centralized, government-led space programs will focus on public-interest space-for-earth activities, including national defense, basic science, and national pride. Whereas the private sector is keen to send individuals into space to follow their interests and supply the demands, they build.
It is the vision that has driven SpaceX to completely transform the rocket launch industry in its first two decades. Today, it has secured almost 60% of the global commercial launch market. It is developing ever-larger spacecraft to ferry passengers not only to the ISS, International Space Station, but also to its own promised settlement on Mars (15).
At the moment, the space-for-space market is limited to supplying to individuals already in space. It includes a few astronauts employed by NASA and other government programs. Even though SpaceX has a grand vision to support a huge amount of private travelers to space, their present space-for-space activities have been limited to demand from government customers like NASA.
However, as launch costs decrease, private entities can leverage economies of scale and put more people into space. And as the private sector demand increases, like tourists and settlers and not government employees, companies like SpaceX can turn these proof-of-concept initiatives into a large-scale, sustainable industry.
Opportunities
While we are using SpaceX as an example, it is not the only player hoping to create and expand a large private market eventually.
For instance, while SpaceX focuses on space-for-space transportation, manufacturing would also be a key industry component.
Industrial Infrastructure and Tools
Made In Space Inc is one such industry that has manufactured in space for space since 2014 when it 3D printed a wrench on the ISS (16). At present, The company is looking into other goods, such as high-quality fiber-optic cable, that terrestrial customers could be willing to pay to have made in zero-gravity.
It also received a contract worth over 74 million USD to 3D print large metal beams in space for NASA spacecraft back in 2019 (17). It is likely for future private-sector spacecraft to have similar manufacturing needs that Made In Space can fulfill.
Made In Space’s current work with NASA could be the first step toward supporting various private-sector manufacturing applications. The costs of manufacturing on Earth and transporting into space would be prohibitive. It is similar to how SpaceX began by supplying NASA but hopes to serve a larger private-sector market eventually.
Building and operating space infrastructure, like habitats, laboratories, and factories, is another key sector of space-for-space investment.
Axiom Space, a market leader, announced earlier this year that it will launch the “first wholly private commercial journey to space” in 2022 onboard SpaceX’s Crew Dragon Capsule (18). Last year, Axiom had also received unique access to a module of the International Space Station, which will aid its efforts to create modules for commercial use on the station (19).
This infrastructure is likely to stimulate investment in a wide range of ancillary services to meet the requirements of the people who live and work in the area. Maxar Technologies, for example, received a 142 million USD contract from NASA in February 2020 to build a robotic assembly tool that will be constructed in space and used on low-Earth orbit missions (20).
Private sector spaceships or communities will undoubtedly require a range of similar construction and repair tools. Of course, the private sector is not solely concerned with industrial goods.
Comfort in Space
We also see human comforts as a promising area for rapid growth as more companies will look to support the human side of our lives in the harsh space environment.
Argotec and Lavazza, for example, joined hands in 2015 to develop an espresso machine that could operate in the zero-gravity environment of the International Space Station, providing a piece of everyday indulgence to the crew (21).
In-Space Mining
For half a century, people have dreamed of exploiting space’s vacuum and weightlessness to source or build items that can’t be made on Earth. Yet, such business cases have repeatedly failed to materialize.
However, those failures were in space-for-earth applications.
For example, two startups, Planetary Resources, Inc. and Deep Space Industries, both founded in the 2010s, saw the promise of space mining early on (22, 23). But the lack of a space-for-space economy meant that both companies’ near-term viability relied on selling mined materials like valuable metals or rare elements to earthbound customers.
When it became evident that demand wasn’t strong enough to justify the steep expenses, funding dried up, and both businesses moved on to new ventures (Suggested Reading: 10 Sure Ways to Improve the Potential of Your Next Startup After Experiencing Failure).
These were failures of space-for-earth business models. However, once humans start living in space, the need for in-space mining of raw building materials, metals, and water will be extensive and far cheaper to supply. In a way, once people start living in space, we can’t call these companies a failure but ahead of their time (24).
Regulatory Challenges
The potential of the space-for-space economy is enormous. However, we can easily miss it if authorities fail to create legislative and institutional frameworks. Without this, the risk-taking and innovation that a decentralized, private-sector-driven space economy requires are unlikely to happen.
Below are three key policies that can be critical for the growth of the space economy:
- Allowing private individuals to take on more risk than government-employed astronauts
- Careful and comprehensive implementation of government regulation and support
- We will need to get past our geopolitical rivalries
Wrapping Up
Our visions for a thriving space-for-space economy have been around since the 1960s, the dawn of the Space Age. So far, our hopes have been largely unmet.
However, this decade is different. For the first in our history, we have private capital, risk tolerance, and a motive for profit in the space industry. We have more private companies looking to put people in space.
We can go as far as to say that 2020 has been the year when we grasped the transformation project of building a true space economy. It is time for us to start seizing this opportunity.
Rucha Joshi, currently managing a team of over 20 content writers at TimesNext is fueled by her passion for creative writing. She is eager to turn information into action. With her hunger for knowledge, she considers herself a forever student and a passionate leader.
