From the ubiquitous news of SpaceX’s, BlueOrigin’s, and Virgin Galactic’s new launches to the images of Stephen Colbert and Neil DeGrasse Tyson riding a NASA Mars rover down the streets of Manhattan, space is reemerging in our collective consciousness as a not-so-distant alternative to life on Earth.
Business tycoons such as Elon Musk, Jeff Bezos and Richard Branson have declared space travel their life-purpose, Hollywood celebrities such as Charlize Theron, Leonardo di Caprio and Ashton Kutcher have lined up for trips into space, and the latest opinion polls are showing the public’s perception of space exploration to be overwhelmingly positive, with 75% of Americans[i] favorable to the idea of NASA pursuing a mission to Mars.
Space industry in numbers
The industry’s financial outlook has been steadily improving over time, pointing towards long-term sustainability. In an article published on October 2018, U.S. Chamber of Commerce Senior Economist Brian Higginbotham estimates that global revenues for the space industry have increased from $175 billion in 2005 to almost $385 billion in 2017 – a respectable growth rate of close to 7% per year.
The growth in revenues is mirrored by the pick-up in the pace of private investment into the space industry. According to research by Bryce Space and Technology, while between 2000 and 2005 the industry received approx. $1.1 billion in investment from private equity, venture capital, acquisitions, prizes and grants, and public offerings, during the five-year time period starting with 2012 the total private investment had risen vertiginously to more than $10.2 billion.
How real is this trend?
The increases in investments and revenues have been sustained by new opportunities in the commercial sector, the start-up ventures ecosystem, and the thriving public-private partnerships space. Several drivers support the industry’s expectation that current growth rates can be sustained over the long term.
Nothing has captured the space enthusiasts’ imagination more than the possibility for private individuals to someday embark on sub-orbital or orbital tours around the Earth, or further on to the moon or even Mars. Space aficionados able and willing to part with sums in excess of $200K have been able to purchase such tickets since 2008, when Virgin Galactic first unveiled its WhiteKnightTwo mothership, designed to carry a crewed SpaceShipTwo spacecraft into space. Despite the many hitches and missed deadlines experienced by all the commercial spacecraft companies, the public’s fascination with space travel has been ignited, and the recent SpaceX and Virgin Galactic test launches show that it is only a matter of time until off-Earth trips and holidays become a tangible reality.
SpaceX: Mars tourism poster for Phobos and Deimos [Creative Commons CC0]
Transporting people into outer space presents extreme challenges, and the safety requirements for crewed missions are understandingly much more stringent than for cargo. Since the close of the U.S. Space Shuttle program 2011, NASA has relied on passage on the Russian Soyuz spacecraft to send astronauts to the International Space Station (ISS). Russia’s contractual obligations to the United States to transport U.S. astronauts to the ISS will expire in April 2019, putting pressure on SpaceX and Boeing – the two companies that have been awarded NASA contracts for commercial crew flights – to meet their November 2019 deadlines for producing spacecraft certified as safe enough to transport astronauts.
Apart from SpaceX and Boeing, Jeff Bezos’ Blue Origin is one of the top contenders in the space transportation market. The company’s vision is to encourage the establishment of millions of people living and working in space, and its progress thus far with its New Shepard and New Glenn rockets has been promising. “I believe and I get increasing conviction with every passing year, that Blue Origin, the space company, is the most important work that I’m doing”, stated Bezos in an interview with Axel Springer’s CEO, Mathias Döpfner, in April 2018.
While the race to be the first company to safely and reliably transport crew in outer space is still underway, the shipping of supplies, space probes and telecommunication satellites into space is already one of the primary revenue streams for commercial space companies such as United Launch Alliance, Northrop Grumman, RocketLab, SpaceX and iSpace. For SpaceX and Northrop Grumman in particular, the Commercial Resupply contracts with NASA allow them to transport scientific experiments, food, water, air and other supplies to the International Space Station (ISS) – a critical and delicate operation requiring international coordination and a near-perfect level of accuracy.
While space tourism has flared the public’s imagination and space transportation already pays some of the bills, many companies in the space industry have their eyes on larger-scale operations with lasting returns on investment. To date, more than ten space-mining companies (including Planetary Resources, iSpace and others) have opened offices in Luxembourg to take advantage of its industry-friendly legislation, research investments and tax concessions.
The purpose of space mining companies is two-fold: to establish the business and technological framework to profitably mine the moon and asteroids for their abundant reserves of metal, gas, ice, and Rare Earth Elements; and to build the infrastructure necessary to enable further exploration and human expansion. The discovery of ice on the moon, Mars, and asteroids means that rocket fuel could someday be produced in outer space, by turning solar energy into electricity, leveraging the electricity to break down water into hydrogen and oxygen, and then using liquid hydrogen and liquid oxygen as rocket propellants.
Moreover, by utilizing 3D-printing technology and locally sourced metals, gases, carbon, silicon, and other materials, spacecraft components as well as space habitats could also be produced off Earth, thus reducing the costs of future exploration even further. This is the very idea put forth by Jason Dunn, Made In Space’s co-founder and chief technology officer, who envisions assembly factories orbiting around Earth and predicts a future where people will go to the factories in space to work in much the same way as oil riggers do. “It might not be pretty, it might not be that safe, but they will make a good living and then come back home”, said Dunn in an April 2018 interview with The Guardian.
Advances in Spacecraft Design
“Faster, cheaper, reusable” is the current mantra for space agencies and rocket-makers alike, and the drive for increased efficiency and cost reductions has led to strikingly innovative spacecraft designs.
Virgin Galactic has developed a rocket-powered space plane – the VSS Unity – which takes off attached to its mothership, WhiteKnightTwo; once it reaches an altitude of 43,000 feet, the plane is released from the mothership and its pilots switch on VSS Unity’s rocket engine to drive the vehicle directly upward at supersonic speeds.
Other companies, such as SpaceX and BlueOrigin, have elected instead to develop reusable launch vehicles that use Vertical Takeoff, Vertical Landing (VTVL) technology to land themselves at target locations. SpaceX’s Falcon 9 rockets have successfully used retrorockets to land on their launch pads multiple times, aided by advanced machine learning algorithms to determine the best way to land the rocket, with real-time computer vision data assisting in route prediction.
These technical achievements have been made possible by innovative engineering upgrades to the vehicle, including grid fins, cold-gas thrusters, and landing legs, and by advances in materials science and in manufacturing.
Rocket Lab, maker of suborbital sounding rocket Ātea and of lightweight orbital rocket Electron, 3D-prints all major components of its Electron rocket’s Rutherford engine. Additive Rocket Corporation, another manufacturer of rocket engines and engine components, combines additive manufacturing with generative design, where computer algorithms test designs to find the optimal solution. For the construction of its Big Falcon Rocket’s upper stage, SpaceX is building the spacecraft out of an advanced carbon fiber which can withstand the gas and liquid leakage and serve as the primary material for the deeply cryogenic tanks, thus reducing the overall weight – and launch costs – of its spacecraft.
Satellite telecommunications market
In our always-on world, uninterrupted service can often make the difference between life and death. While traditional, large satellites will continue to be launched in orbit, a greater number of nano- and micro-satellites – lighter and less expensive to build – will eventually crisscross the sky, aided by the lower costs of launching reusable rockets. The rise in communication capacity will continue to change the way the world communicates, generating more uses and increased demand for low- or no-latency data and communications.
Spacecraft manufacturers, who finance much of their operations through launching satellites and smaller craft into orbit, will continue to get a boost in revenues from this growing market. SpaceX, for instance, has seen its success rate in launches climb from 6 launches in 2014 to 21 launches in 2018, and started 2019 with the deployment of 10 Iridium Next satellites into orbit, thus completing a two-year, eight-launch contract between the two companies[ii]. According to Forbes’ valuation for SpaceX, the company is forecasted to earn about $2.7 billion per launch in 2019. In the coming years, SpaceX can expect to see significant revenue from launching the FCC-approved Starlink constellation of almost 12,000 satellites, designed to implement a new, low-cost space-based Internet communication system.
Demand for space data
Distilled through advanced Big Data analytics and machine learning technologies, space data have been put to use in a large variety of fields, from defense to weather forecasting, agriculture, urban and rural development, and water management. Companies such as DigitalGlobe, Harris, Esri and Planet Labs provide their customers with access to vast geospatial libraries along with the analytical and deep learning tools that allow users to extract useful insights from that data at scale. Funding received by companies such as Orbital Insight, Ursa Space, and Descartes Labs supports this trend, and has enabled the expansion of the uses of geospatial data into new domains such as predictive analytics for retailers, predictions of water shortages, crop yield tracking, and marine life monitoring.
An industry report released in 2018 by Northern Sky Research – the Satellite-Based Earth Observation (EO), 10th Edition – forecasts annual revenues from satellite-based Big Data analytics for earth observation to reach $1.3 billion by 2026. While government agencies are still the major customers for space data analytics, it is expected that large commercial enterprises with significant exposure to the physical world, for instance in industries like oil & gas, metals, agriculture, mining, construction, and shipping, will represent a significant customer segment.
The industry is, relatively speaking, still only in its
infancy, growing in fits and spurts as different market segments mature at
different speeds. New, agile players continue to join the market in droves,
pushing the boundaries of technology in the pursuit of innovative use cases. Are
we close to seeing a tipping point in the market? Much hinges on NASA’s success
in 2019 in using commercial (SpaceX and Boeing) spacecraft to transport U.S.
astronauts to the International Space Station, on the European Space Agency’s CHaracterising ExOPlanet Satellite (CHEOPS)
launch, scheduled for October – November this year, and on the lunar landings
planned by the Israeli and Indian space agencies. These endeavors, if they go
as planned, are expected to reignite the public’s interest in space
colonization and lead to increased spending on space development.
[i] Steinberg, Alan. (2011). Space policy responsiveness: The relationship between public opinion and NASA funding. Space Policy. 27. 10.1016/j.spacepol.2011.07.003.
[ii] Trefis. (n.d.). What Is Driving SpaceX’s Revenues & Valuation? Retrieved January 28, 2019, from https://dashboards.trefis.com/no-login-required/j63oKJzk?fromforbesandarticle=whats-driving-spacex-valuation