Author: Geetha Rani.
The new Space Economy is growing and evolving, together with the development and profound transformation of the space sector and the further integration of space into society and economy.
The “old” space industry was centralized, national, and bureaucratic. It was limited to state-run programs with limited numbers of public-private partnerships. The government’s push to outsource space activities not considered core to its mission brought on a mega-trend for the industry — commercialization. This trend is behind the transformation in the space economy.
The New Economy in Space is global, entrepreneurial, and accessible. It is increasingly diversified and expanding with private players across a variety of sub-sectors. The global space economy was valued at about $447 billion in 2020, 55% higher than a decade ago, according to The Space Report 2021 Q2. This is truly astronomical growth and made possible because the new space economy is finally connecting to the larger economy.
What are the Top 8 drivers of the New Space Economy?
1 – A Growing Relationship Between Space and Climate Change
With the alignment of Space and sustainability more investors are focusing on environment, social and governance factors. Satellite imagery provides key data on the environmental impact of company’s activities. 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.
2- Increased Capital Formation
The space industry now regards private corporate involvement in the sector more positively. 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.
SPACs—special purpose acquisition companies—are a well-suited mechanism to attract capital for long-horizon business models in space.
3- Mitigating Orbital Debris- 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. Government agencies now struggle to track these orbital debris, creating potential demand for private companies to monitor and manage this potentially catastrophic space waste.
4- Space and Security
Space has become an increasingly contested domain among countries, underscoring the need for “space domain awareness” by private and governmental players. For example: Satellite providers, see their services cutting across political lines to address issues important to everyone, including national security and bridging the digital divide.
5- Satellite Internet
Companies focus on improved connectivity through LEO satellites , wireless broadbands, optical communication to name a few.
6- Asteroid Mining
Companies are developing technologies to extract water , rare minerals and metals from near earth asteroids.
7- Space Tourism
Companies are developing access to space for private citizens , space explorers, and space adventure programs
8- Space Research
Research groups are dedicated to exploration of space and space technology.
For a long time, companies in this industry tried to capture the market by selling satellite, data or the technology, and customers understandably could not connect this to their need. Today, more and more providers in the industry are realizing that it’s not about the data or technology, rather it’s about meeting the customer where they are and offering answers.
In turn, this improved customer-centric mentality is catching the attention of investors and the industry is becoming, for the for first time, more investable.
The increased capital is leading to more players bringing more technologies to the marketplace.
All of this translates to lower costs, reduced barriers to entry, shortened timelines for launches, and more customer-centric offerings. This means that the New Space economy is the Old Space economy perfecting.
Perfect markets have connections to the larger economy and are therefore naturally more resilient. For example, Amazon Web Services (AWS Aerospace and Satellite) and Microsoft (Azure Space) can validate that this value chain is prized.
The New Space Economy is by no means a perfect market but definitely more perfect than it was 20 years ago — driving innovation and encouraging new areas of investment leading to a prized value chain. Thus, transforming business landscape in the space industry.
- The Commercial Space Age Is Here. By Matt Weinzierl and Mehak Sarang
- Main Trends & Challenges in the Space Sector-PwC
- What Are We Really Witnessing in the New Space Economy? By Michael McCarthy
- 5 Key Themes in the New Space Economy. – Morgan Stanley Research
- Measuring the Space Economy- Space Economy ESA
- Space Economy: 4 Trends to Watch in 2022. -Sean Ludwig