- 2020 is the year of the
trillion space economy
- The rise of the mega-constellations
- The rise of the mini-constellations
- New options for human spaceflight
- NASA’s public-private partnerships
- Space Force
- Space case: Why reaching for the stars could soon be a
- 0 billion — and rocketing up
- Data driven
- Hitching a ride
- So what about space travel?
- More than billionaire thrill rides
- Help wanted
2020 is the year of the $1 trillion space economy
The first time I can find “space economy” and “trillion dollars” in the same sentence is in 1984, when then-congressman Robert Walker told the Associated Press that a space station in low-Earth orbit could “lead to a half-trillion-dollar economy in space by the turn of the century.”
Some 35 years later, we’ve fallen short of the mark.
The best estimates of the money made from space—which these days mostly come from building and operating rockets and satellites, and using them to provide services back on Earth—is about $400 billion.
To be fair to Walker, now a lobbyist who served on US president Donald Trump’s NASA transition team, the space station under discussion didn’t begin operations until 2000.
The turn of the century was a hard time for the space economy, as tech bubble-driven dreams of internet satellites and venture-backed moon missions fizzled out alongside the stock market.
But a lot has changed since then, and the dream of a trillion dollar space economy is now cited by everyone from government officials and space entrepreneurs to Fortune 500 executives and Wall Street investment banks.
Analysts at Morgan Stanley and Goldman Sachs have predicted that economic activity in space will become a multi-trillion-dollar market in the coming decades, and the US Bureau of Economic Analysis has launched a new initiative to measure it.
The trends driving this optimism are the same ones driving the tech economy writ large: The increasing power and miniaturization of transistors, batteries and solar panels, generated in part by the smartphone revolution; the convergence of telecommunications, broadcast media, commerce and nearly everything else into “the internet”; and, naturally, geopolitical tensions that still have governments spending on space and, increasingly, hiring private companies.
What does this look in practice in 2020?
The rise of the mega-constellations
Elon Musk’s SpaceX plans to launch its fifth rocket full of proprietary internet satellites in January.
That will raise the total number of satellites in the company’s Starlink constellation to about 300, well on the way to the roughly 480 the company’s executives say they’ll need to begin offering broadband internet access to customers on Earth.
How exactly that will happen—as a direct to consumer product or as a partnership with terrestrial telecom firms—remains to be seen, but Musk and his team are confident that if they can build low-latency connectivity, the buyers will come.
SpaceX is hardly the only group making this bet: OneWeb, Telesat and Amazon are also investing billions in networks of thousands of internet connectivity satellites. Apple is also reportedly chasing the dream of space connectivity.
To be sure, this isn’t the first time satellite internet in space on a mass scale has been tried—Bill Gates notably invested in a failed effort called Teledesic in the 1990s.
What’s different is that all the components—satellites and the rockets that launch them—are an order of magnitude cheaper, the latter thanks mostly to the efforts of Musk to drive down the cost of launch.
And meanwhile, the demand for internet access isn’t a novelty, but ravenous and central to the economy.
Most of the money made in space is on the back of satellite-provided service, so these efforts are ly to meaningfully increase the space economy.
The huge increase in satellites (there are about 2,300 operational satellites in space right now) will bring costs as well as benefits, with astronomers worried about interference and everyone fretting about managing all that traffic and dodging space debris.
Yet that is ly to spur investment in new satellite servicing businesses that seek to keep low-Earth orbit clean and efficient.
The rise of the mini-constellations
Venture capitalists have also been throwing millions of dollars at small satellite companies with big dreams.
Planet, Hawkeye360, Spire, Capella Space, BlackSky and Swarm are just some of the firms who have raised cash, launched satellites, and are planning for a big 2020.
Their business models vary, from tracking radio signals and gathering radar data to imaging every inch of the Earth to communicating with internet-of-things devices. But they all depend on the falling cost of building and operating spacecraft to enable their work.
In response to the growing corps of companies operating small satellites, we’ve seen a growing number of firms building rockets fit for the task. Rocket Lab has been the most successful, but Virgin Orbit promises to begin operations in 2020, and Relativity Space remains on track for a maiden launch in 2021.
New options for human spaceflight
It’s been a long year of one-step-forward, one-step-back for the commercial crew program, NASA’s efforts to develop a private space transportation service with Boeing and SpaceX.
But both companies are now in the final stretch, with orbital flights of their vehicles under their belts. Sometime in 2020, we can expect them to begin regular service to the International Space Station.
NASA officials expect that to increase the amount of research done on the station, a big plus for the space economy.
The companies will also have the green light to start bringing up paid passengers, whether wealthy tourists or corporate researchers. While uncertain, that promises new revenues and new opportunities for private-sector activity in low-Earth orbit.
Closer to the ground, we can still look forward to space tourism.
Virgin Galactic went public this year in a reverse merger, and now Richard Branson’s space tourism firm says it has the cash to begin flying regular tourist trips to the edge of space sometime in 2020 for a cool $250,000 a pop.
Blue Origin, Jeff Bezos’ space firm, said it would fly people on its New Shepard suborbital rocket this year, but with a week left, has not—so perhaps 2020 will be the year the company demonstrates its human spaceflight chops.
NASA’s public-private partnerships
NASA’s biggest space projects, particularly its plans to return humans to the moon, have had a tough year, with allegations of mismanagement and problems ranging from delayed hardware to muddled strategy.
Space visionaries see that return to the moon—and access to the water ice discovered there—as key to the grandest visions of a future space economy, with thousands of people living and working in Earth orbit.
For now, though, it’s not clear whether the US government can resolve the conflicts between its goals for space exploration and its willingness to change the way NASA does business enough to create a sustainable presence on the moon.
In the meantime, NASA is investing in smaller but perhaps more meaningful efforts to bolster the space economy. From the lunar side, it is hiring private companies to build spacecraft, landers and rovers that will carry scientific instruments to the moon.
The space agency hopes that, as with its partnerships to fly cargo and crew to the International Space Station, this strategy will deliver more scientific bang for the taxpayer buck.
From an economic perspective, the program is ly to bolster the know-how of private companies when it comes to operating on the moon, iterating towards that grand vision.
There’s also forward movement in low-Earth orbit, where the International Space Station has been opened up to more commercial activity, part of NASA’s hope to start sharing the costs of humanity’s space outpost more broadly.
This year marked the creation of the Space Force, a branch of the US military dedicated to space as a warfighting domain.
Immediate change will be little more than existing US Air Force personnel changing their uniforms and titles, but the move spells a real shift in how the US military treats space.
Right now, space exists mostly to aid and abet the other services in projecting power overseas, providing reconnaissance, communications, guidance and navigation.
Space Force, at heart, is about creating a bureaucratic and political constituency for thinking bigger in orbit—and investing in new space sensors to track enemy missiles, spacecraft that can defend themselves (and attack others), even crewed military habitats. All that means more money for private companies in space, with half-a-dozen defense agencies already pumping millions into space start-ups building everything from radar networks to high-tech materials.
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Space case: Why reaching for the stars could soon be a $1 trillion industry
- In 2018, governments and companies around the world spent a record $415 billion on satellite-based entertainment, weather forecasting and other services.
- Wall Street analysts expect the “space economy” to top $1 trillion within the next 20 years.
- Driving the bulk of space investment today is rising demand for satellite-based entertainment and a range of apps that require rapid data transmission.
Half a century after Neil Armstrong first stepped foot on the moon, the final frontier is no longer the exclusive domain of governments, or even gazillionaire entrepreneurs.
While the race for commercial space travel grabs headlines, a potentially lucrative industry is also starting to take off. Here's why some experts think space could soon become a $1 trillion business.
$400 billion — and rocketing up
Governments and companies worldwide spent a record $415 billion last year on everything from satellite-based entertainment to real-time services such as mapping and weather forecasting — notably, private businesses account for nearly 80% of that spending, according to the nonprofit Space Foundation. More than half of that money went into satellite services and products entertainment, with about a quarter for infrastructure such as satellite launch vehicles.
Commercial space investment is up 79% since 2009, when Elon Musk's SpaceX launched its first commercial payload. The launch was an event that “changed everything,” according to a report from private investment firm Space Angels produced for NASA's small business and technology program.
Morgan Stanley analyst Adam Jonas figures that by 2040, the market for space-related products and services will reach $1.1 trillion — and estimate that jibes with forecasts from Goldman Sachs and Bank of America. The U.S. Chamber of Commerce is even more bullish, last fall projecting what it calls the “space economy” to reach $1.5 trillion within the next two decades.
Tourist trips to the International Space Station isn't what's driving growth at the moment, though the publicity stokes excitement.
More important, providing entertainment services and apps that control everything from the temperature in your home to the best way to get around traffic increasingly depend on private industry's ability to zap information from outer space to earth.
CBS Poll: Apollo 11 still source of pride 00:38
“The business case closes in space for only a few applications right now, mostly for television and telecommunications,” Matt Weinzierl, a professor at Harvard Business School who studies the economics of space, told CBS MoneyWatch. “But the harsh reality is that the costs of transportation to and from space — much less operation in space — make data a uniquely feasible space product.”
Though U.S. government spending on the space trade is rising, it made up just 12% of the total last year, according to the Space Foundation.
Hitching a ride
Another factor driving the space investment boom is satellite “ridesharing,” which lets companies put their satellite on a launch vehicle with others. That has lowered costs and invited more companies to enter the marketplace, putting more satellites into orbit.
“We're only now reframing our paradigm of space and considering the potential of space to make life better on Earth,” said Becki Yukman, a senior data analyst for the Space Foundation.
“And anything with a profitable bottom line, it's exploding and not liable to peter off soon,” she added.
Commercial space flight is regulated by the Federal Aviation Administration, just commercial flights closer to earth. But funding for commercial satellite launch areas is shifting from the federal government to private and state entities, according to a recent report from the U.S. Government Accountability Office.
So what about space travel?
The industry that really captures the imagination, of course, is commercial space travel.
Just last week, Richard Branson's Virgin Galactic announced plans to become a publicly traded company by the end of the year.
Blue Origin, run by Amazon founder Jeff Bezos, announced in May that it's building a moon lander that could put astronauts back on the surface by 2024, as well as hauling tons of cargo.
SpaceX launches Falcon Heavy rocket 08:08
Certainly, space enthusiasts are queuing up. Virgin Galactic said it has reservations from more than 600 people for a ride into space and has already taken $80 million in deposits. That implies a per-flight price of $200,000, according to Morgan Stanley's Jonas.
Still, the power of ordinary people blasting off may be more valuable for trumpeting space as a home for business, the Wall Street analyst wrote in a recent note. “It is difficult for us to convey the potential marketing power of sending folks into space,” he said.
More than billionaire thrill rides
In June, NASA announced it will open the space station for commercial visitors, ferried by Boeing and Elon Musk's SpaceX. The space agency's blueprint also calls for developing technology needed for research labs it can lease in the future.
The NASA plan urges work to “stimulate sustainable demand” in fields from in-space manufacturing to biomedicine. Indeed, private companies have been stoked by NASA investment, as well as investment by other countries around the globe. Space Angels notes there are now 375 private companies, with $19 billion invested so far.
Funding from wealthy space enthusiasts Bezos, Musk and the late Microsoft co-founder Paul Allen has provided momentum, with such ventures ly to get over the “tipping point” of taking paying passengers into space soon, Weinzierl predicted.
“We hear so much about it in part because of the pure excitement it generates, but also because it really will mark an inflection point in the business,” he said.
More than 179,000 people are employed in the U.S. space industry, according to the Space Foundation. Of those jobs, most work in the private sector and are focused on developing and manufacturing new launchers and spacecraft. Thousands also work in areas such as satellite telecommunications and remote-sensing applications.
Roughly 44,000 federal workers are in space-related fields, with about 17,000 working for NASA. But most of the growth from 2017 to 2018 was in the private sector, according to the report's compilation of figures. Europe has the next-biggest workforce, followed by India and Japan.