The Commercialization of Space

//The Commercialization of Space

The Commercialization of Space

Mankind has been successfully launching objects into space for more than 60 years.  What started as a pursuit of science and national defense has over the years added the desire for profit.  Sustained financial returns have been elusive, but that won’t be the case forever.

Space exploration started with the 1957 Russian launch of Sputnik I and the 1958 American launch of Explorer I.   In the mid-1960s, the first commercial satellite went into orbit to support telephone communication, opening the door for private companies to help advance rocket building and propulsion technologies for a variety of purposes.  As nationalistic interest in space has waned, these for-profit organizations are monetizing their technological abilities in new and creative ways.

The space industry is growing at a faster rate than before.  Revenue for the global space industry is currently $350 billion and is expected to grow to $1.1 trillion by 2040.  Since 2004, $135 billion has been invested in 862 space companies; 47 companies received $5.5 billion last quarter alone.  Since 2004, 74% of the funding has gone to companies in the U.S. and China.  The following are some of the ways companies are commercializing space.

Space tourism.  Bringing paying customers into space will likely start with suborbital trips lasting less than a day and could grow into extended travel to space hotels.  Discounted rates for the first flight are set at a mere $225,000, making this an option only for the well-financed traveler.

Space as part of the journey.  Until it was retired in 2003, the Concorde was the only civilian supersonic aircraft, cruising at Mach 2 (1,341 mph) and an altitude of 60,000 feet.  Plans were announced earlier this year to develop an aircraft that would fly at more than Mach 3 with cruising altitudes above 60,000 feet, bringing us closer to space as a pathway between two terrestrial locations.  Image using space and speed to turn a 20+ hour trip between New York and Sydney into two.

Transport of people.  Following the 2011 cessation of NASA’s space shuttle program, Russian Soyuz capsules are the only spacecraft that transport people to and from the International Space Station.  Since then, work has progressed on privately run options and manned test flights are currently underway.

Transport of goods.  For-profit companies are successfully conducting cargo flights with NASA’s support.  In contracting out these responsibilities the U.S. government can save by distributing the cost of research, development, and creation of new spacecraft.  The next logical steps are to offer these services for businesses that would benefit from space travel but are not equipped to travel there.  Think of an asteroid mining company wishing to conduct reconnaissance missions.

Sponsorships.  This represents the purest form of space commercialization.  Businesses would be allowed to sponsor space missions they deem worthwhile.  Recall the worldwide attention paid to the moon landing in 1969.  Now imagine the regard given to a particularly novel or challenging space mission, and the value in promoting your business at the same time.

More companies are gaining traction in these business lines.  Few are yet publicly traded, fewer still are pure plays focused exclusively on space.  We expect that will change.  There will be future successes and failures.  But what was once viewed as Star Wars-ish is taking on more realistic opportunities.

2020-11-18T15:24:29-06:00 November 18th, 2020|Newsletter Exclusive Content|0 Comments