Space is more important to modern business than most investors realize. It plays a role in making food, pricing insurance, and steering self-driving cars. While moonshot projects from SpaceX to Blue Origin drive headlines, the Earth-facing space economy is booming thanks to plummeting costs of entry. As tech companies large and small compete to launch thousands of satellites, it is easy to forget that space used to be the domain of national governments. Today, it is fast becoming the arena of private enterprise.
Consider that Amazon recently announced Project Kuiper, a plan to loft more than 3,000 satellites into orbit to provide high-speed Internet to up to 4 billion new customers, while SpaceX is launching Starlink with plans to put nearly 12,000 satellites into low-earth orbit. Facebook is reportedly working on satellites, too. That’s just for surfing the web anywhere on Earth. Then there are more aloof plans for space tourism and asteroid mining, as well.
Currently, the space market is roughly a $325 billion enterprise, and I recently saw a projection that the global space economy will reach $1 trillion in 20 years — a forecast that leaves me skeptical.
The Earth-facing space economy is already experiencing huge growth. The trillion-dollar projection would involve plans for mining minerals on asteroids and planets and bringing them back to earth for industrial use.
There are two space economies in development. One is Earth-focused and involves technologies that deliver resources — mainly satellites — to space to provide services on earth. Think in terms of telecommunication, photo-imaging and GPS navigation. The other seeks to develop a completely new economy in space that aims to explore and colonize space. Just five to 10 years ago it was unimaginable that a private sector company, such as SpaceX or Blue Origin, would take on such a challenge.
The primary driver of the explosion of space investment has been a vast reduction in launch cost. It now costs $2,500 to blast two pounds into space, compared to upwards of $50,000 with very long lead time. With cheap access to space, people are putting entire constellations of satellites into orbit and making the availability of data much higher and the price of the data much cheaper.
That space-based and space-connected data touches our lives around the clock. There are few ways activities in our lives that do not involve satellites. Consider the food we eat, which was likely grown using satellite images, including weather and earth observation satellites, as well as used for the shipping logistics required to bring the food to market. The use of wi-fi, cell phones, credit cards, TV programming, music streaming and many other forms of media are all part of the orbital communications web satellite networks have created. Soon, GPS-dependent autonomous vehicles will heighten our reliance on satellite technology and rocket delivery systems.
Today’s satellites can be built in a garage and affordably rocketed into space, which is why the space revolution is extending far beyond deep-pocketed captains of industry and technology companies, and to emerging economies in Africa, India and other places that could never before afford a space program. Smaller private companies and startups are also getting in on the act.
The enormous number of satellites being launched into lower orbit will be a necessity based on the amount of data our modern economies are seeking to produce and have immediate access to. Take autonomous vehicles as one example. The most important functionality driverless vehicles must have is geopositioning. Without GPS a vehicle will not know its location, where it’s going or how to get there. Does this vehicle know where it is within the road and the natural physical boundaries of the road? Many people do not realize that current GPS is civilian grade, not the more accurate military grade. The former will not be accurate enough to keep vehicles safely spaced between one another.
The basic GPS we currently use gives us accuracy to within about 1.5 feet. Getting ultra-high military-grade accuracy will require much more powerful satellites. What’s more, autonomous vehicles will create and use so much data every few hours they could fill the U.S. Library of Congress. A swarm of orbiting satellites and satellite operators will be required. The cost of getting this data from the satellite to the ground is already very high, so we are going to have to start thinking about trying to find new ways of getting huge volumes of data from space to the ground very cheaply. Having the private sector in the business of near-Earth space will help devise clever and cheap ways of accomplishing this feat.
Then there is the fantastically ambitious goal of asteroid mining for critical commodities we need to drive industry. Sending space vehicles to asteroids to extract materials and bring them back to earth is a first step toward testing whether we can eventually set up mining operations on Mars or other planets, which would constitute the creation of an entirely new space-based industry. Keep in mind, however, that we do not even know if asteroids or neighboring planets contain the minerals we are seeking.
So where do we expect the space economy to be in the next five or 50 years? In the short term, we are going to continue seeing gigantic growth in Earth-focused space technologies, or basically anything to do with launching satellites. There are already more than 100 rocket launch startup companies alone. Creating nano-satellites, dealing with the data relay between the satellite and Earth, or creating downstream analytics, are other sectors growing extraordinarily fast.
All of these components of the earth-focused space business are going to become increasingly important to our daily lives, as the number of data touchpoints we encounter in our lives continue to grow.
As for the space-exploration economy, the partnership between government and the private sector will need to increase. Expect to see a human land on Mars within the next 50 years, but colonization of Mars is unlikely to happen in our lifetimes.
Sinéad O’Sullivan is a space economist and an entrepreneurship fellow at Harvard Business School.