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Emerging Space based or Space for space economy

What we are seeing is that the world has entered an era of intense competition in almost all spheres including geopolitical, economic, military, technology and industry. On one hand, competition is helpful as it speeds up innovation and development. On the other hand, when it becomes unmanageable and employs unfair means it also multiplies our security vulnerabilities and may trigger future conflicts.


More and More physical spaces are now becoming militarized from deep oceans to the Arctic to Cislunar space up to the moon and technologies are being developed from surveillance, platforms, propulsion, materials to weapons for dominating these domains. Again, one of the chief motives is resource competition. For example, It is estimated that there are trillions of dollars’ worth of minerals and metals buried in asteroids that come close to the Earth hence there is race for asteroid mining.


The Space Economy is defined by OECD as the full range of activities and the use of resources that create value and benefits to human beings in the course of exploring, researching, understanding, managing, and utilizing space. This dynamics led some analysts to declare that the space industry could become the next trillion-dollar industry by 2040.


In 2019, 95% of the estimated $366 billion in revenue earned in the space sector was from the space-for-earth economy: that is, goods or services produced in space for use on earth. The space-for-earth economy includes telecommunications and internet infrastructure, earth observation capabilities, national security satellites, and more. This economy is booming because of decreasing costs for launch and space hardware in general that have enticed new entrants into this market, and companies in a variety of industries have already begun leveraging satellite technology and access to space to drive innovation and efficiency in their earthbound products and services. For example, satellites are now providing a clearer view of how industries and human activities are intensifying climate change, while communications, navigation and national security issues dominate governments’ growing interests in space.


Space-based or Space for space economy

In contrast, the space-for-space economy — that is, goods and services produced in space for use in space, such as mining the Moon or asteroids for material with which to construct in-space habitats or supply refueling depots — has struggled to get off the ground. As far back as the 1970s, research commissioned by NASA predicted the rise of a space-based economy that would supply the demands of hundreds, thousands, even millions of humans living in space, dwarfing the space-for-earth economy (and, eventually, the entire terrestrial economy as well). The realization of such a vision would change how all of us do business, live our lives, and govern our societies — but to date, we’ve never even had more than 13 people in space at one time, leaving that dream as little more than science fiction.


Space-based economy is economic activity in outer space, including asteroid mining, space manufacturing, space trade, construction performed in space such as the building of space stations, space burial, and space advertising. Space-based industrial efforts are presently in their infancy. Most such concepts would require a considerable long-term human presence in space and relatively low-cost access to space. The majority of proposals would also require technological or engineering developments in areas such as robotics, solar energy, and life support systems.


Some analysts have argued for creating an International Bank, to support deep space exploration


Today, however, there is reason to think that we may finally be reaching the first stages of a true space-for-space economy. SpaceX’s recent achievements (in cooperation with NASA), as well as upcoming efforts by Boeing, Blue Origin, and Virgin Galactic to put people in space sustainably and at scale, mark the opening of a new chapter of spaceflight led by private firms. These firms have both the intention and capability to bring private citizens to space as passengers, tourists, and — eventually — settlers, opening the door for businesses to start meeting the demand those people create over the next several decades with an array of space-for-space goods and services.


In our recent research, we examined how the model of centralized, government-directed human space activity born in the 1960s has, over the last two decades, made way for a new model, in which public initiatives in space increasingly share the stage with private priorities. Centralized, government-led space programs will inevitably focus on space-for-earth activities that are in the public interest, such as national security, basic science, and national pride. This is only natural, as expenditures for these programs must be justified by demonstrating benefits for citizens — and the citizens these governments represent are (nearly) all on earth.


In contrast to governments, the private sector is eager to put people in space to pursue their own personal interests, not the state’s — and then supply the demand they create. This is the vision driving SpaceX, which in its first twenty years has entirely upended the rocket launch industry, securing 60% of the global commercial launch market and building ever-larger spacecraft designed to ferry passengers not just to the International Space Station (ISS), but also to its own promised settlement on Mars.


Today, the space-for-space market is limited to supplying the people who are already in space: that is, the handful of astronauts employed by NASA and other government programs. While SpaceX has grand visions of supporting large numbers of private space travelers, their current space-for-space activities have all been in response to demand from government customers (i.e., NASA). But as decreasing launch costs enable companies like SpaceX to leverage economies of scale and put more people into space, growing private sector demand (that is, tourists and settlers, rather than government employees) could turn these proof-of-concept initiatives into a sustainable, large-scale industry.


This model — of selling to NASA with the hopes of eventually creating and expanding into a larger private market — is exemplified by SpaceX, but the company is by no means the only player taking this approach. For instance, while SpaceX is focused on space-for-space transportation, another key component of this burgeoning industry will be manufacturing.


Made In Space, Inc. has been at the forefront of manufacturing “in space, for space” since 2014, when it 3D-printed a wrench onboard the ISS. Today, the company is exploring other products, such as high-quality fiber-optic cable, that terrestrial customers may be willing to pay to have manufactured in zero-gravity. But the company also recently received a $74 million contract to 3D-print large metal beams in space for use on NASA spacecraft, and future private sector spacecraft will certainly have similar manufacturing needs which Made In Space hopes to be well-positioned to fulfill. Just as SpaceX has begun by supplying NASA but hopes to eventually serve a much larger, private-sector market, Made In Space’s current work with NASA could be the first step along a path towards supporting a variety of private-sector manufacturing applications for which the costs of manufacturing on earth and transporting into space would be prohibitive.


Another major area of space-for-space investment is in building and operating space infrastructure such as habitats, laboratories, and factories. Axiom Space, a current leader in this field, recently announced that it would be flying the “first fully private commercial mission to space” in 2022 onboard SpaceX’s Crew Dragon Capsule. Axiom was also awarded a contract for exclusive access to a module of the ISS, facilitating its plans to develop modules for commercial activity on the station (and eventually, beyond it).


This infrastructure is likely to spur investment in a wide array of complementary services to supply the demand of the people living and working within it. For example, in February 2020, Maxar Technologies was awarded a $142 million contract from NASA to develop a robotic construction tool that would be assembled in space for use on low-Earth orbit spacecraft. Private sector spacecraft or settlements will no doubt have need for a variety of similar construction and repair tools.


And of course, the private sector isn’t just about industrial products. Creature comforts also promise to be an area of rapid growth, as companies endeavor to support the human side of life in the harsh environment of space. In 2015, for example, Argotec and Lavazza collaborated to build an espresso machine that could function in the zero-gravity environment of the ISS, delivering a bit of everyday luxury to the crew.


To be sure, people have dreamt of using the vacuum and weightlessness of space to source or make things that cannot be made on earth for half a century, and time and again the business case has failed to pan out. Skepticism is natural. Those failures, however, have been in space-for-earth applications. For example, two startups of the 2010s, Planetary Resources, Inc. and Deep Space Industries, recognized the potential of space mining early on. For both companies, however, the lack of a space-for-space economy meant that their near-term survival depended on selling mined material — precious metals or rare elements — to earthbound customers. When it became clear that demand was insufficient to justify the high costs, funding dried up, and both companies pivoted to other ventures.


These were failures of space-for-earth business models — but the demand for in-space mining of raw building material, metals, and water will be enormous once humans are living in space (and are therefore far cheaper to supply). In other words, when people are living and working in space, we are likely to look back on these early asteroid mining companies less as failures and more as simply ahead of their time.


Seizing the Space-for-Space Opportunity

The opportunity presented by the space-for-space economy is huge — but it could easily be missed. To seize this moment, policymakers must provide regulatory and institutional frameworks that will enable the risk-taking and innovation necessary for a decentralized, private-sector-driven space economy. There are three specific policy areas we believe will be especially important:


1. Enabling private individuals to take on greater risk than would be tolerable for government-employed astronauts.
First, as part of a general shift to that more decentralized, market-oriented space sector, policymakers should consider allowing private space tourists and settlers to voluntarily take on more risk than states would tolerate for government-employed astronauts. In the long run, ensuring high safety levels will be essential to convince larger numbers of people to travel or live in space, but in the early years of exploration, too great an aversion to risk will stop progress before it starts.
An instructive analogy can be found in how NASA works with its contractors: In the mid-2000s, NASA shifted from using cost-plus contracts (in which NASA shouldered all the economic risk of investing in space) to fixed-price contracts (in which risk was distributed between NASA and their contractors). Because of private companies’ greater tolerance for risk, this shift catalyzed a burst of activity in the sector — sometimes referred to as “New Space.” A similar shift in how we approach voluntary risk-taking by private-sector astronauts may be necessary in order to launch the space-for-space economy.


2. Judiciously implementing government regulation and support.
Second, as with most markets, developing a stable space economy will depend on judicious government regulation and support. NASA and the U.S. Commerce and State Departments’ recent recommitment to “create a regulatory environment in [low-Earth orbit] that enables American commercial activities to thrive” is a good sign that the government is on a path of continued collaboration with industry, but there’s still a long way to go.
Governments should start by clarifying how property rights over limited resources such as water on Mars, ice on the Moon, or orbital slots (i.e., “parking spots” in space) will be governed. Recent steps — including NASA’s offer to purchase lunar soil and rocks, last April’s Executive Order on the governance of space resources, and the 2015 Commercial Space Launch Competitiveness Act — indicate that the U.S. government is interested in establishing some form of regulatory framework to support the economic development of space.


In 2017, Luxembourg became the first European country to establish a legal framework securing private rights over resources mined in space, and similar steps have been taken at the domestic level in Japan and the United Arab Emirates. Moreover, nine countries (though Russia and China are notably missing) have signed the Artemis Accords, which lay out a vision for the sustainable, international development of the Moon, Mars, and asteroids. These are important first steps, but they have yet to be clearly translated into comprehensive treaties that govern the fair use and allocation of scarce space resources among all major spacefaring nations.


In addition, governments should continue to fill the financial gaps in the still-maturing space-for-space economic ecosystem by funding basic scientific research in support of sending humans to space, and by providing contracts to space startups. Similarly, while excessive regulation will stifle the industry, some government incentives, such as policies to reduce space debris, can help reduce the costs of operating in space for everyone in ways that would be difficult to coordinate independently.


3. Moving beyond geopolitical rivalries.
Finally, the development of the space-for-space economy must not be undermined by earthly geopolitical rivalries, such as that between the United States and China. These conflicts will unavoidably extend into space at least to some extent, and military demand has long been an important source of funding for aerospace companies. But if not kept in check, such rivalries will not only distract attention and resources from borderless commercial pursuits but also create barriers and risks that hamper private investment.


On earth, private economic activity has long tied together people whose states are at odds. The growing space-for-space economy offers exceptional potential to be such a force for unity — but it’s the job of the world’s governments not to get in the way. A collaborative, international approach to establishing — and enforcing — the rule of law in space will be essential to encouraging a healthy space-for-space economy.


Sierra Space and IBM Collaborate on the Next Generation of Space Technology and Software Platforms

Together,  Sierra Space, a leading commercial space company at the forefront of creating and building the future of space transportation and infrastructure for low-Earth orbit (LEO) commercialization and IBM  announced in Oct 2022, the signing of a new Memorandum of Understanding (MOU). Sierra Space and IBM plan to work to develop the next generation of space technology and software platforms across Sierra Space’s range of space vehicles and infrastructure


IBM’s technology platform would facilitate Sierra Space’s efforts for automating business operations to achieve better performance, automate IT operations to deliver actionable insights, automate application and data flows to improve client experiences, automate networks to deliver zero-touch operations, and generate deeper insights into threats, orchestration actions and automated responses.


In addition, IBM plans to support Sierra Space through its journey of building a seamless technology platform in space, which both envision as a first-of-its-kind, comprehensive platform to effectively service the cloud in space and drive mission operations – all while supporting development of new applications for commerce, research, tourism and more.


“Sierra Space is leading the design, development and operations for the future of commercial space and infrastructure,” said Sierra Space CEO Tom Vice. “Through this planned agreement with IBM, we will leverage the full depth of its industry expertise and innovative technology portfolio to evaluate and support unique in-space challenges we will face as we build the future of commercial space. Effective Hybrid Space Platforms will allow us to derive previously untapped value from the growing quantities of data generated in space. Together, we will leverage secured AI to drive new capability for Sierra Space, IBM, the broader orbital ecosystem, and the new space economy.”


The proposed joint work is also expected to drive a single, unified, and flexible distributed computing environment where users can easily build and modernize applications, make data AI-ready, and integrate and orchestrate workloads (across multiple environments and vendors) for flexible, secured, and open operations. The companies are discussing development and deployment of these abilities terrestrially and/or in space, in addition to offering support for ongoing operations and management of Sierra Space’s technologies.


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