The entrepreneurial space age is well underway.
The global space economy is estimated to be worth around USD 350 billion, today. The current size of this industry is still miniscule compared to other behemoths such as the global chemical industry, energy industry, pharmaceuticals industry, and telecommunications industry, among others. However, what makes this industry all the rage right now is the sheer amount of headroom that it has for growth. Estimates by investment banks such as Goldman Sachs and Bank of America Merrill Lynch peg the size of global space economy to be anywhere between USD 1 trillion to upwards of USD 2.5 trillion by the 2040s.
Presently, the satellite industry is the largest component of the overall space economy with international governments and telecommunication companies being the main sources of expenditure in this economy. Even though the growth of the satellite industry has been tepid over the last few years, proponents are quick to point out the rapid emergence of several other sub-sectors such as commercial human space flights, commercial human space stations, and even asteroid mining, that are likely to propel the space economy to astronomical heights in the near future.
With the arrival of a new breed of space entrepreneurs, the space economy is at the cusp of a revolution. At the forefront of this revolution is eccentric billionaire and visionary, Elon Musk. Musk was one of the first few people to recognize the growth potential of the space industry and launched his own private space venture, SpaceX, in 2002. In 2017, SpaceX made history by becoming the first company in the world to relaunch an orbital rocket. Up until then, it was believed that it was impossible to manufacture reusable orbital rockets. However, by re-launching its Falcon 9 rocket into space within just a couple of years of its first launch, Musk-led SpaceX defied all odds and expectations. This was a watershed in the history of rocket science as companies realized that they no longer had to shell out tens to hundreds of million dollars to manufacture new rockets for every launch. They could significantly reduce their costs by following SpaceX’s lead and invest in innovative technologies that enable them to manufacture reusable rockets.
Though Mr Musk led SpaceX’s rocket relaunch was a landmark achievement, it was not the business magnate’s ultimate goal. Mr Musk who regards himself as a kind of a messiah has taken upon himself the challenge of ‘saving humanity’ by colonising Mars. Musk’s ambitious plan to build a habitable human settlement on Mars is already underway with the first manned mission to the red planet slated to take place sometime between 2024 and 2030. Besides working towards his grand plans of conquering space, Mr Musk is also working to commercialize space travel. He wants to make space travel ‘affordable’ by investing in disruptive and innovative technologies that make commercial human spaceflights, financially feasible. And the SpaceX founder and executive, is already leading the charge with his announcement on September 17 that Japanese fashion entrepreneur, Yusaku Maezawa will be the first person to make a private trip around the moon in 2023.
Mr Musk may be the one leading the race to space but others are not far behind. Following him in the pack are a number of prominent names in the business world such as Amazon’s founder and CEO, Jeff Bezos and founder of the Virgin Group, Richard Branson, to name a few. Both these billionaires have founded their own private space ventures—Blue Origin and Virgin Galactic, respectively—which are also vying for a share of the potentially multi-trillion dollar space tourism industry.
While well-established firms like SpaceX, Blue Origin and Virgin Galactic are busy competing with one another to establish a permanent berth in the space tourism sub-sector, a number of startups are capitalizing on this opportunity to get an early-mover advantage in another potentially lucrative sub-sector: asteroid mining. Startups such as Planetary Resources and Deep Space Industries are two of the front-runners in the area. Asteroids are known to contain huge deposits of water, precious elements such as gold and diamonds, and even natural resources. These startups want to wean humanity off earth’s limited natural resources by tapping into asteroids to extract potentially unlimited amounts of minerals and resources. They are heavily investing in ground-breaking technologies such as artificial intelligence and 3D printing to develop cheaper and more reliable methods of getting things done.
With the improving fundamentals of space startups—such as stable revenue growth and improving technologies—lately, there has been growing interest and investments in the space economy by investors. Up until a few years ago, most investors were wary about investing in space startups. However, on the ground progress and technology demonstrations by startups such as SpaceX means that investors can longer turn their heads away from these companies. In fact, in 2017 alone, investors made USD 3.9 billion worth of investments in space startups.
The growing optimism of investors surrounding the space economy means that they are likely to pour an increasing amount of money into space startups in the near future. Access to investors with deep pockets and radical technological breakthroughs is likely to turn this already hotly contested race to space even more intense. After the dust settles, if visionaries like Musk are successful in realizing their vision, the course of humanity will be changed forever.