The booming Space Economy
The current market is expected to balloon to $1.0-$1.5 trillion in the next 20 years
When Neil Armstrong set foot on the moon with his famous “One small step for man, one giant leap for mankind” five decades ago, the final frontier of space was considered strictly a domain of governments. Actually, for the first few decades, it was a space race between just the two superpowers of the time — the United States & the USSR. It was a matter of projecting power & prestige more than anything else.
A lot has changed since then — Not only have other countries shown interest in exploring the final frontier, there has also been a huge influx of private sector investment in the last decade alone for commercial space endeavors to extract the potential of this highly lucrative industry. The massive growth in the Space economy has been driven by the need for replenishing dwindling resources here on Earth & a need for sustainable investing made possible by huge technological advances.
The growing space economy has enticed other countries to launch their own space agencies. While NASA is still a major influence in the Space economy with its experience, size of the budget & innovation, at least 13 countries have established their own space agencies in the past decade alone. These agencies are looking to tap the potential of the lucrative niches that NASA & private space behemoths might have overlooked.
Advances made by the private sector technologically have seen the opening of space agencies in places like Luxembourg, Paraguay, and the Philippines. Portugal, on the other hand, has even more ambitious plans. It has decided to convert its famous tourist destination of Santa Maria islands in the Atlantic into one of the world’s busiest spaceports.
The business hub of the Middle East, UAE, has its eyes on the space frontier as well. It is focusing on satellite development by employing facilities of its commercial partners. Last year, the Emirates launched its first astronaut in space and plans to send a robotic scientific mission to Mars next year, on top of investing half a billion dollars in Richard Branson’s space startup Virgin Galactic.
A current snapshot of the space economy lists three major sectors dominating the space economy (infographic above).
❶ Products & Services (55%) — This sector is the biggest of the three, driving the most commercial activity. Advanced satellites are providing low-cost & high-speed global internet connectivity, data streaming, telecommunications, and location-based services.
❷ Infrastructure (25%) — Development of reusable rockets, the building of ground and space stations & equipment for communication like satellites, receivers, and terminals is also booming.
❸ Government (20%) — The interest by governments has been revived by the private sector involvement as more space agencies get established around the World — monitoring the space to offer better services for their citizens.
There is no doubt that private space ventures like SpaceX, Blue Origin & Virgin Galactic have kickstarted the Space economy with their endeavors. All three companies have invested more than a billion dollars and are by far the biggest players in the space industry. Here’s a look at some of the other numbers & recent developments.
- Virgin Galactic became the first space startup to trade publically on the New York Stock exchange on October 28, 2019, under the stock ticker SPCE.
- Investment has skyrocketed in the space-related industry in the last decade. Overall, 93 private investments totaling $10.2 billion were made in 2012–2018, which dwarfs the previous 8 investments of only $1.1 billion in the period between 2002–2005.
- According to a report by a private investment firm Space Angels, commercial space investment is up by 79% since 2009 when SpaceX launched its first commercial payload.
- Around $415 billion were spent by governments & private companies on satellite-based entertainment to real-time services with the latter contributing to 80% of the total spending, as reported by the nonprofit Space Foundation.
- Morgan Stanley estimates that the market for space economy would expand to $1.1 trillion within the next two decades. The U.S. Chamber of Commerce is even more bullish, forecasting the space economy will swell to $1.5 trillion by 2040.
- Mining nearby asteroids for natural & energy resources is probably one of the sought after aspects of the space economy & perhaps the most lucrative one. In fact, according to an estimate, most valuable asteroids in our solar system hold resources measured in quintillions of US dollars.
The next decade is going to be an important one, with declining costs & advanced technology propelling the space economy to new highs. We have never been closer to the final frontier.