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Space economy is 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.
The space economy refers to the economic activity associated with the production, distribution, and use of goods and services that are related to space, including the manufacture of satellites, launch services, ground equipment, and downstream applications. The space economy also includes the commercial use of space resources, such as satellite-based communications, navigation, and remote sensing.
Climate change, security and telecoms are among the key themes driving a boom in the space economy. 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.
The global space economy’s value reached $424 billion in 2020, having expanded 70% since 2010. Despite the ongoing pandemic, space launches for the first half of 2020 were mostly at par with previous years; the 41 successful launches were only slightly below the five-year average of successful launches (43). The Space Foundation’s The Space Report 2022 estimates that the space economy was worth $469 billion in 2021 – a 9% increase from a year earlier.
The space economy has been growing in recent years, driven by advances in technology, increased private sector investment, and the growing demand for space-based applications. According to a recent study by Euroconsult, the global space economy was valued at $339 billion in 2019, and is projected to reach $547 billion by 2029.
In 2020, space investments remained strong at $25.6 billion, and the momentum for investments is likely to remain solid in 2021 as well. There has also been an increase in state-backed investment in space projects around the world, according to the Space Foundation report. There was a 19% jump in overall government spending on military and civilian space programmes last year. India raised spending by 36%, China invested 23% more and the US pumped another 18% into space ventures.
The space economy can be divided into three main segments:
- Space manufacturing and launch services: This includes the production of satellites and launch vehicles.
- Ground equipment and services: This includes ground-based equipment used for satellite operations and satellite-based services such as satellite-based internet and GPS.
- Space applications and downstream services: The economic impact of space industry also extends beyond the space sector itself, it creates opportunities in many other industries such as telecommunications, navigation, earth observation, and many other fields. This includes the use of space-based data and services for a wide range of applications, such as weather forecasting, natural resources management, and emergency response.
Space launch services are expected to record strong growth in 2021, with the market forecast to grow more than 15.7% year over year. Space exploration is also expected to continue to evolve and grow in 2021 due to declining launch costs and advances in technology.
And over 1,000 spacecraft were put into orbit in the first six months of this year, the report says – more than were launched in the first 52 years of space exploration (1957-2009).
Satellite applications include monitoring greenhouse-gas emissions from companies and regions, helping utilities optimize renewable energy infrastructure and mining data to project how climate change could affect particular industries.
Space Industry
As funding continues to increase and costs decline, the space industry is likely to experience increased opportunities, primarily in satellite broadband internet access.
The space economy also creates many indirect benefits, such as employment and the creation of new businesses. A host of private-sector companies are now investing in space programmes, seeking everything from scientific advances to potentially lucrative business opportunities. It’s estimated that there are now more than 10,000 firms and around 5,000 investors involved in the space industry. The space industry is projected to generate more than 100,000 jobs by 2030.
The space industry is a rapidly growing field that encompasses a wide range of activities, from satellite launches and space exploration to the development of new technologies and applications for space-based systems. Some of the key areas of the space industry include:
- Satellite Launches: This includes the design, development, and launch of satellites for a variety of purposes, such as communication, navigation, remote sensing, and earth observation.
- Space Exploration: This includes the exploration of space through the use of spacecraft, such as robotic rovers and human-crewed missions to the Moon, Mars, and other destinations.
- Space-based Technologies: This includes the development of new technologies and applications for space-based systems, such as satellite-based internet and GPS, as well as space-based solar power and space debris removal.
- Space Science and Research: This includes the study of the Earth, the solar system, and the universe through the use of telescopes, satellites, and other space-based instruments.
- Space Transportation: This includes the development of new spacecraft and launch vehicles for human and cargo transportation to and from space.
- Space Applications: These are the applications that use space technology, for example, weather forecasting, natural resources management, and many more.
The space industry is a highly interdisciplinary field, drawing on advances in engineering, physics, computer science, and many other fields. It is also a global industry, with many countries and private companies investing in space-related activities.
The space industry is expected to continue to grow in the coming years, as advances in technology and the increasing demand for space-based applications drive the development of new and innovative space-related products and services.
But the space sector is not only a growth sector in itself – it’s also proving a key enabler of growth and efficiency in other sectors. The European Space Agency says the deployment of new space infrastructure has brought benefits to industries including meteorology, energy, telecommunications, insurance, transport, maritime, aviation and urban development.
Most of this money came from the private sector rather than the public sector, the report says, estimating that more than $224 billion was generated from products and services delivered by space companies.
Space-related technologies are being developed in an enormous speed nowadays. Launch vehicle, satellite, propulsion, manufacturing and other companies emerge every quarter. Big companies in spacetech share their innovations and breakthroughs every week. Several countries have already
planned their Mars colonization projects, others have the clear vision of lunar scientific stations. Space tourism has finally become available and is on its way to becoming more and more accessible.
NASA’s drive to push forward exploration of the final frontier with missions to the moon, Mars and into deep space has led to the invention of dozens of new technologies over the decades. These have allowed for the development of products that have transformed daily life, such as camera phones, laptops, memory foam, CAT scans and even baby formula. As government entities like NASA set their sights on ambitious missions, such as Mars exploration, private companies are focusing on low-Earth-orbit transportation, satellite launches and commercial human spaceflight. Government agencies are also welcoming greater involvement from the investment community to develop the commercial potential of space and space-related markets.
Spacetech industry is made of a big variety of spheres. From companies that study propulsion and manufacture engines to the companies that develop medicine for astronauts. From those that
only produce specific materials to those that design both software and hardware for the launch vehicle.
Since SpaceTech is a really broad industry tag, there are a lot of companies that touch upon space-related technologies, but don’t quite reach the scale of space exploration, like television providers
for example.
There is a list of companies that fully manufacture unmanned and/or manned launch vehicles, that carry the payload to different levels of Earth orbit. They usually specialize and differ much. Some are good for launching nano-satellites, others benefit from being fully customizable. Some leading companies manufacture the crucial parts of the launch vehicles. For example thrusters of space station modules. Some even assemble specialized satellites or develop new technologies,
that can be capitalized on in near future. Most of them attach much investments.
Over the long term, costs will likely continue to decline, with companies in the space ecosystem focused on reaching critical mass. For example, there are over 1,000 Starlink satellites launched into orbit by SpaceX, and the company aims to deploy 4,425 satellites in orbit by 2024 as its launch costs decline, driven by reusable rockets and mass production of satellites. Launch costs for a satellite have already declined from $200 million in the past decade to nearly $60 million currently and have the potential to fall further to as low as $5 million.
The space industry should reach $1 trillion in annual revenue by 2040, with launch costs dropping 95%, Citigroup analysts said in an extensive report published in May 2022. A further decline in the cost of accessing space would create more opportunities for technological expansion and innovation, unlocking more services from orbit such as satellite broadband and manufacturing, the bank added.
“Fundamentally, with the new generation of space being driven by the commercial sector, the launch industry is seeing a secular shift from being largely cost-plus pricing-based to being value-based in order to open up new markets and maximize profitability,” Citi said. “Previously, the launch market had a limited number of government-supported companies that were concerned more with military capability and creating revenue and jobs than with increasing operational efficiency.”
The increasingly common practice of reusing rocket boosters is driving that cost down. Citi estimates launch costs could fall to about $30 per kilogram by 2040 in a best-case scenario. If rockets are “still only being reused around 10 times” each by 2040, which SpaceX is already doing, the cost still comes down significantly to about $300 per kilogram, the firm said.
Private investment in space companies, especially from venture capital, has steadily broken annual records over the past decade. In 2021 space infrastructure companies received $14.5 billion of private investment, according to Space Capital’s quarterly report, which tracks about 1,700 companies.
A flurry of space companies went public in 2021 through SPAC deals, but most of the stocks are struggling despite the industry’s growth. The shifting market environment, with climbing interest rates hitting technology and growth stocks hard, have seen space stocks drop as well. Shares of about a dozen space companies are off 50% or more since their debut.
Despite Citi’s optimistic outlook, the firm emphasized that much remains speculative in the industry, “such as space-based solar power, moon/asteroid mining, space logistics/cargo, space tourism, intercity rocket travel, and microgravity R&D and construction.”
“A similar analogy would be attempting to forecast the value of the internet today versus nearly 20 years ago when the term ‘smartphone’ was relatively unknown and before broadband replaced dial-up internet connections,” the analysts said.
As the space sector expands, companies large and small are adopting new business models, including Space Data as a Service, Satellite as a Service and Ground Station as a Service, These new models are emerging as the space sector is witnessing large commercialization of satellite applications, which has opened new opportunities through the use of small satellites, on-orbit servicing, and low Earth orbit constellations. These services promise the benefits of space without the demands of satellite manufacturing, government regulations, launch integration or space data delivery.
The US is a leader in the number of SpaceTech companies and the amount of investment they receive. The US is still firmly in the lead in terms of the number of spacetech companies (52.1%). The UK ranks second (5.7%), while Canada, Germany, India and China are in the third place (with 4.5%, 3.8%, 3.4% and 2.7% respectively). However, Asia is confidently gaining momentum in the financing of companies in the industry. Thanks to the new space goals of the United Arab Emirates, the Middle East entered the race as well.
The satellite market makes up the largest slice of the space economy, at over 70%, and Citi says the sector “is undergoing a paradigm shift in demand.”
While satellite revenues have dominantly come from services like television, the bank sees an expansion into applications ranging from consumer broadband to mobile connectivity to internet-of-things networks.
The bank believes the expansive satellite networks of SpaceX’s Starlink and Amazon’s
Project Kuiper will accelerate this shift through “greater accessibility” to internet services across the globe.
Another sector Citi sees strong gains in is satellite imagery, which the firm estimates makes up about 2%, or $2.6 billion, of the current space economy. The bank forecasts an expansion in the sector driven by “space-as-a-service” applications, reaching $17 billion in annual sales by 2040.
The largest companies by market capitalization are William Hills, MultiChoice Group Limited, Eli Lilly and Company, Danaher Corporation and Honeywell International.
Some of leading spacetech companies include Advantech Wireless, Aerojet Rocketdyne Holdings, AirBorn, Airbus, ALCOA Inc., Alliant Techsystems, Analog Devices, Inc., Anaren, Ariane Group, Aselsan, Avcorp Industries, B/E Aerospace, BAE Systems, Inc., Ball Aerospace, BGF Industries, Blue Origin, BlueHalo, Boeing, CMC Electronics, Inc., Cobham, Collins Aerospace, Crane Aerospace & Electronics, CS GROUP in SPACE, Curtiss-Wright Corporation, Daiichi System Engineering, Dassault Aviation, Dish Network, Amgen, Arrowhead Products, Carlisle Interconnect Technologies, Draper, Ducommun, Inc., DWG Holdings, Hamilton Sundstrand, 7 Harris Corporation, Honeywell Aerospace, IEC Electronics, IHI Corporation, JSC Information Satellite Systems, KBR, Inc., Kratos Defense and Security Solutions, L3Harris Technologies, Leonardo, LMI Aerospace Inc., Lockheed Martin, Maxar Technologies, Meggitt, Inmarsat, Mission Essential, MIT Lincoln Laboratory, Mitsubishi Heavy Industries, Moog Inc., Nortech Systems, Northrop Grumman, Dynetics, Inc., EaglePicher Technologies, ENSCO, FDC Composites inc, Flexan Corporation, General Atomics, General Electric, Gentex, GKN Aerospace, OHB-System AG, Precision Castparts, Roscosmos, RUAG, Safran, Tesat-Spacecom, Saint-Gobain Aerospace, SES S.A., Sierra Nevada Corporation, Sifco Industries, SiriusXM, Spirit AeroSystems, Swales Aerospace, Teledyne Technologies, Inc., SpaceX, TERMA Group, The Aerospace Corporation, Thales Defence, TransDigm Group Inc., Trimble Inc., TRW Inc., United Launch Alliance, United Technologies, UTC Aerospace, Victrex, Virgin Group, ONERA, Orbital ATK, Orbital Sciences LLC, Qinetiq Canada, Raytheon Technologies, Rockwell Collins, Roketsan, OHB-System AG, Precision Castparts, Roscosmos, RUAG, Safran
Regulations and space junk
Expanding the space economy won’t be easy, though, the firm said, noting that the harsh environment of space, the steep upfront capital costs and the long timeline to see returns on space projects all represent significant growth risks.
Citi stressed that the perception of space “as a mere hobby for billionaires” represents another risk, as the industry “needs to gain public acceptance before it can be adopted across various industries.” While investment from private entities has driven down the cost of access to space, with more people and spacecraft flying for a fraction of what governments have been able to accomplish, the perception that space companies are ego-driven pet projects of the most wealthy individuals can damage the industry’s potential, the firm said.
As to human spaceflight, Citi noted that the failure rate for crewed launches is less than 2% historically. But that “is still far too high for space passenger flights,” it said, given that commercial aviation experiences failures at the minuscule rate of about 0.0001%.
Telecoms a Near-Term Focus
Satellite operators see value across all three orbital altitudes—GEO, MEO and LEO (Geostationary Equatorial Orbit, Medium Earth Orbit and Low Earth Orbit, respectively)—with companies taking different approaches to blending them.
GEO still underpins the industry, but telecoms also want to provide differentiated broadband services with integrated, seamless offerings for consumer, business and government customers.
Regulatory risk represents another obstacle for the industry, Citi noted. There are several federal and international entities responsible for approving and regulating space companies. Telecoms will also need to work with regulators at the U.S. Federal Communications Commission and the UN’s International Telecommunication Union to treat space as a shared global resource, with spectrum rights and orbital debris being two key issues.
Mitigating Orbital Debris
According to the U.S. National Oceanic and Atmospheric Administration, the number of active satellites in orbit is set to vastly increase by 50% or more in the years ahead. As space becomes more congested, the threat of “space junk”—orbital debris from old spacecraft and satellites—to new satellites and rocket launches has grown. Tens of thousands of artificial objects are tracked in orbit around the Earth, with many times that expected to be in orbit but are too small to be tracked. Some government agencies now struggle to track this orbital debris, creating potential demand for private companies to monitor and manage this potentially catastrophic space waste.
“This increases the risk of the ‘Kessler Syndrome’ becoming a reality — the idea that space junk in orbit around the earth, with no air resistance to slow it down, will reach a saturation point where it simply collides with other space junk and fragments into smaller pieces, until it eventually creates a debris field that stops any new satellites from being launched,” Citi said.
Space and Security
Space has become an increasingly contested domain among countries, underscoring the need for “space domain awareness” by private and governmental players. That means identifying, characterizing and understanding objects in orbit.
In addition, the establishment in 2019 of the “Space Force,” a sixth branch of the US military, could drive public sector investment in 2021 and beyond. Furthermore, the US Space Command, which oversees space operations using personnel and assets managed by the Space Force, will likely support A&D companies in accelerating investments in innovative technologies and capabilities. China and Russia are also focusing on strengthening their military capabilities in space.
References and Resources also include:
https://analytics.dkv.global/spacetech/SpaceTech-Industry-2021-Report.pdf
