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The global space economy is on the brink of a transformative era, with projections pointing to a massive growth spurt. According to a report by the World Economic Forum and McKinsey & Company, the space economy is expected to grow from $630 billion in 2023 to $1.8 trillion by 2035. This growth is fueled by advances in space-enabled technologies, such as communications, positioning and navigation, and Earth observation services. As these technologies become more accessible and affordable, their impact is set to extend far beyond space itself, reshaping industries, driving economic growth, and addressing some of the world’s most pressing challenges.
The space industry is rapidly advancing, with major developments occurring every week across the globe. From successful rocket tests to groundbreaking satellite launches and ambitious robotic missions to the Moon and beyond, human activity in space is accelerating like never before. As we enter the super-heavy rocket era, an expanding number of industry players are racing to revolutionize access to space. These efforts are progressively opening up space data and services to a broader range of industries and stakeholders, fueling innovation and connectivity across the globe.
The Rise of Space-Enabled Technologies
Space technologies have already become integral to everyday life, from weather forecasting to powering the smart devices we use daily. In particular, industries like ride-hailing apps, which have reached global scale thanks to satellite-based technologies, are just one example of how space-enabled innovations are reshaping entire sectors. As costs continue to decrease and access to space becomes more widespread, space technologies are poised to revolutionize everyday life, creating new opportunities for both traditional and non-traditional players alike.
However, their potential is far greater than just enabling convenience. The future of space is poised to bring unprecedented opportunities to diverse sectors, including supply chain and transportation, food and beverage, defense, retail, consumer goods, and digital communications. As these industries increasingly rely on space technologies, the space economy will experience rapid growth, outpacing global GDP expansion.
“Space technologies are delivering greater value to a more diverse set of stakeholders than ever before,” says Sebastian Buckup, Member of the Executive Committee at the World Economic Forum. With costs decreasing and accessibility improving, space technologies could have as profound an impact on business and society as smartphones or cloud computing.
Key Drivers of Growth in the Space Economy
The four main drivers of space’s increasing prevalence are:
- Decrease in Launch Costs
The number of satellites launched annually has grown by over 50% from 2019 to 2023, while launch costs have dropped tenfold in the past 20 years. These cost reductions are expected to continue, with data prices—key to connectivity—projected to fall by 10% by 2035 as demand grows by 60%. - Commercial Innovation (e.g., Components and Software)
Ongoing innovation in satellite components and software enables more efficient space-based services, such as Earth observation at an unprecedented resolution of 15 centimeters. As the cost per pixel continues to decline, these services are becoming more affordable and accessible. - Diversification of Investment and Applications
The space sector is attracting diverse investors, with private sector investment reaching record highs of over $70 billion in 2021 and 2022. Space applications are expanding, with new possibilities such as space tourism becoming a reality. - Cultural Awareness and Enthusiasm
While humans have not stepped on the Moon in over 50 years, space continues to capture global attention. Governments and businesses alike are increasingly recognizing the potential of space, with excitement surrounding the latest developments driving both investment and innovation.
By 2035, space-based technologies such as satellite communications, Earth observation, and positioning services will drive a significant portion of the space economy’s expansion. According to the report, five sectors—supply chain and transport, food and beverage, state-sponsored defense, retail and consumer goods, and digital communications—are projected to account for 60% of the space economy by 2035.
One of the biggest game-changers will be the enhanced connectivity space technologies provide. As satellite networks become more robust and widespread, industries will benefit from more efficient logistics, faster communication, and better disaster response capabilities. Space technologies are already improving sectors such as agriculture, healthcare, and education by providing reliable data and connectivity to underserved regions.
Space’s Impact Beyond Earth
The growth of the space economy isn’t just about economic returns. Space is also positioned to play a vital role in addressing some of the world’s most pressing challenges, including climate change and disaster response. Satellite technologies are critical in monitoring climate-related disasters, tracking environmental changes, and managing resources more effectively.
Moreover, space innovations can contribute to efforts to mitigate climate change by monitoring methane leaks, optimizing energy use, and improving environmental sustainability. These technologies also have the potential to reduce inequality by bridging the digital divide, improving access to healthcare and education, and enabling precise monitoring of agricultural and environmental changes.
The Expansion of Space Applications
A decrease in launch costs and technological advancements are opening new possibilities for space. The number of satellites launched annually has been increasing, and launch costs have dropped by a factor of ten over the past two decades. As a result, more players—from startups to large corporations—are entering the space sector, increasing investment in space technologies.
With the rise of mega-rocket technology and space tourism, there are even more opportunities for commercial space ventures. Space tourism alone is expected to generate $4-6 billion by 2035, with revenues primarily coming from ultra-high-net-worth individuals experiencing in-orbit stays on space stations.
A Bright Future for Space
Looking ahead to 2035, the space economy is on track to reach $1.8 trillion, but there’s room for even greater growth. With continued advancements in space technologies and further reductions in launch costs, some estimates suggest the space economy could reach as high as $2.3 trillion.
Space Will Become More About Connecting People and Goods
By 2035, five key sectors—supply chain and transportation, food and beverage, defense, retail and lifestyle, and digital communications—will generate more than 60% of the growth in the space economy. This growth will also extend to other industries, offering new opportunities for both traditional and non-traditional players.
Space’s Return on Investment Goes Beyond Financial
The economic returns from space will not be limited to revenue generation. Space technology will play an increasingly critical role in addressing global challenges such as disaster management, climate monitoring, humanitarian response, and fostering widespread prosperity. Collaboration between public and private sectors will be essential in ensuring that space capabilities reach their full potential.
The Transformation of the Space Economy
As investments in space continue to broaden, countries like Japan, Peru, Saudi Arabia, and Thailand are ramping up their space initiatives. Meanwhile, private sector investments are driving innovations in areas such as in-orbit inspection, maintenance services, and space stations. The space economy is set to undergo a profound transformation in the coming decade, as public and private partnerships expand, further integrating space-based technologies into daily life and shaping the future of the global economy.
However, this potential is not guaranteed. Challenges such as restricted access to space and technological stagnation on Earth could limit growth. Nonetheless, the future of space is filled with opportunities, and those who embrace the potential of space will be positioned to lead in this expanding frontier.
Embracing the Opportunities of Space
Space is already transforming our world, and both incumbents and new entrants from across various sectors must be prepared to leverage the economic, social, and geopolitical benefits that space-based technologies offer. Every industry can contribute to the space economy by driving standardization, accessibility, usability, and awareness. Collaboration between stakeholders will be crucial in ensuring that space technologies can reach their full potential.
Technological innovation and financial competitiveness will determine the space economy’s trajectory. Based on improved access to space data and reduced entry costs, the space economy could reach an upside estimate of $2.3 trillion by 2035. However, if access to space stalls or terrestrial advancements reduce the need for space-based technologies, the space economy might reach a lower estimate of $1.4 trillion by 2035.
By understanding and embracing space’s full potential, both public and private sector players can position themselves as leaders in this emerging industry, unlocking long-term benefits for business, society, and the environment.
To realize the full potential of the space economy, businesses across industries must recognize the vast opportunities space-enabled technologies present. Sectors such as agriculture, construction, insurance, and climate change mitigation can all benefit from the innovations emerging from space.
By understanding and embracing space’s potential, both public and private sectors can unlock long-term benefits for their businesses and society as a whole. As we move toward 2035, the space economy is not just about the technologies we build; it’s about the new economic ecosystems we create that will shape the future of our planet and beyond.
Conclusion
The space economy is poised for explosive growth, with space technologies playing a central role in shaping the global economy. From addressing climate change to enhancing digital connectivity, the opportunities are vast. By 2035, space could contribute $1.8 trillion to the global economy, driven by innovations that will benefit industries and societies around the world. For those ready to embrace these technologies, the future of space offers unparalleled opportunities for growth, sustainability, and impact.
