Space – The next 1 Trillion US Dollar Industry - Innovation Centre Silicon Valley

Over the past decade, the advancements in space tech have enabled new actors to enter the sector, unlocked new use cases, and positioned space to help tackle global challenges. International, public-private and cross-sector collaboration efforts have been fuelled by a common quest to push the new frontier of space commerce and exploration.

Space-based Technology and Infrastructure

In August 2023, an important event unfolds when European Space Agency (ESA) astronaut Andreas Mogensen embarks on Huginn, his first long-duration mission to the International Space Station (ISS) [1]. This unique assignment will see a non-American astronaut piloting a NASA SpaceX mission for the first time ever, highlighting a stronger international collaboration. This not only represents progress in human spaceflight but also symbolizes a cooperative approach to space exploration. Meanwhile, NASA’s Artemis program is reigniting its lunar aspirations [2]. By 2025, it intends to land the first woman and next man on the Moon, paving the way for sustained lunar exploration, and ultimately, using the moon as a stopover to reach Mars.

But space exploration is no longer the exclusive domain of government entities. An astronomical shift is unfolding, fuelled by private space ventures. Fifteen years ago, Falcon 1 established SpaceX as the first private company to build a low-cost rocket that could reach orbit [3]. Today, SpaceX, Blue Origin, and numerous emerging players are shaping a new space economy both in the Low Earth Orbit (LEO) and beyond.

Why is this interesting?

Commercial launch is just the beginning of the story as space-based technologies already represent the backbone of our largest global industries. Today’s communication infrastructure relies heavily on satellite networks, and the prospect of commercial space travel and expeditions to the Moon seems not so distant.

Space tech innovation is no longer limited to established enterprises. The space industry, currently valued at around USD 447 billion, is projected to soar to an astronomical USD 1 trillion by 2030 [4], indicating the sector’s unprecedented potential. According to Morgan Stanley, the space industry is set to create the world’s first trillionaire [5]. In 2022, private investors poured USD 22 billion into the market [4]. The number of satellites is estimated to triple within the next decade, amounting to around 15,000 satellites by 2030 [4]. Moreover, there are over 600 space start-ups globally pushing boundaries and rewriting the old conventions [4]. Within the next 7 years, this number is expected to surge past 1000 [4], reflecting the growing appetite for space technologies worldwide. Remarkably, about 70 countries now have their own space agencies [4], which implies the universal appeal of space exploration.

McKinsey (2023)

How Far Are we?

In the US, the space sector has witnessed a dynamic interplay between government agencies and the emerging private sector. As NASA continues to lead the charge in space exploration, private companies are becoming key players in driving enabling space technologies. Once an emblem of American space exploration, NASA’s role has shifted to serving as a facilitator to the ecosystem, fostering partnerships, and championing ground-breaking ideas and collaborations. Private space ventures, such as SpaceX, have demonstrated that commercial activity can be successful in helping to bolster NASA.

For years SpaceX has flown cargo and supplies for NASA to the ISS [6]. The space agency has expanded that public-private partnership, allowing SpaceX to fly its astronauts to the space station as well [7]. Furthermore, Bezos’ Blue Origin recently won a USD 3 billion contract to develop a spacecraft that would transport astronauts to and from the lunar surface [8]. NASA has extended this relatively new model to space stations, hoping the private sector will take on an even greater task of building destinations in space. Before the ISS retires, NASA and its partners are on a mission to build new stations with the purpose to replace the ISS [9]. Reaching retirement age before its successor is ready could leave the US with nowhere to send its astronauts and the tension has exacerbated now that China has started to build a station of its own [10].

NASA’s contracts symbolize the space agency’s willingness to place enormous bets on the growing commercial space industry, which has been eroding governments’ established monopoly on activity in space. The democratization of space tech, driven by entrepreneurs such as Elon Musk, Jeff Bezos and Richard Branson and their respective space ventures, has sparked a sea change in the industry, inviting private entities, start-ups, and individuals to strive for their mark in space exploration. Companies with assets in space, revenue streams dependent on space operations, or suppliers working in space are at the forefront of this movement [11].

Private investments have become a material part of the equation, reaching USD 46.3 billion across all space technology layers in 2021 [12]. The United States continue to lead in total private investments, with 46% of all deals taking place there [12]. Although the emerging space industries, including commercial space stations, Lunar transportation services, logistics and industrials, have seen investments of only USD 2.7 billion all together over the past decade [12], there is increasingly more capital is being raised in those promising new areas.

TechPlomacy perspectives: Space systems are crucial for the functioning of our societies, our economy and our security. At the same time, space is becoming an increasingly contested and competitive domain fuelled by a significant reduction in the costs of space-capable technologies and new opportunities in terms of economic development as well as for security and defence. As significant investments and increasing profitability of space technology continues, the pace of innovation will continue to rise – and so will strategic competition between countries. The fundamental international policy challenge is that space technology is already moving faster than international governance. Tests of anti-satellite weapons, thousands of satellites in orbit, earth-based infrastructures dependent on space technology, and an increasing launch rate will increase the scope of threats and risks related to space as well as the opportunities. A key task for policy-makers in the coming decades will be to mitigate these challenges, avoid a hostile environment in space and exploit its opportunities while taking into account the new significant role of private actors and companies in space. 

Outlook and Challenges

The rapid growth of the space sector and complex global dynamics pose a risk to the future prospects of international collaboration, the longevity of governance frameworks, and the industrial progress. A prime concern presents the management of space debris, escalating with every new satellite launch [13]. Navigating the complex legal landscape of space activities presents another challenge, as does ensuring sustainable use of space resources. Finding a balance between our technological aspirations and necessary ethical considerations will be vital as we continue our space voyages and ventures. To fully realize the gains of space, the international community needs to find common ground on how to intentionally maintain space as an arena of collaboration.

Let’s connect

Please reach out to Morten Scheel Larsen at mortla@um.dk for any inquiries. We, at ICDK Silicon Valley, offer our services to corporates, SMEs and academic partners looking to dive further into the area of Space-based Technology and Infrastructure.

Sources

Global Tech Trends conference on 12.SEPTEMBER

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