The Race to Space is on

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.

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