The Emerging Space Economy - drivers of demand, sources of supply… and innovation.

The future looks bright for space exploration. Yet the pace, activity and location of this exploration over the coming years and decades is likely to be heavily influenced by financing and resources supplied to meet demands for activity in space. So what will the emerging space economy look like?

Supply - the game changer. The revolution in reusable rocket design, with the prospect of sharp falls in the cost of lifting people, materials and fuel off the earth’s gravity well, is a gamer changer. Massive reductions in these supply costs can open - are already beginning to open up -whole bundle of potential demand drivers.

Demand. There is already a thriving demand for numerous uses of satellites in space, especially telecoms/tv and positioning/navigation and timing signals with further growth potential. With lower launch costs, future demand is likely eventually from further ‘on orbit’ research (eg fibre optic crystals), and potentially some niche manufacturing, as well as space tourism (including hotels) and long distance rapid passenger/goods travel. Security and defence uses are not something I'm especially interested in but are likely to also create demand on orbit - and have a long history of driving technological innovation, not least rockets.

Research and technology development will help drive demand beyond earth orbit (eg low frequency radio telescope on the far side of the moon), though my hunch is demand will be driven mainly in earth-moon space for most of the next century, including eventual development of rotating habitats on orbit and at Lagrange points.

Research, technology and a desire to explore will also gradually increase demand for activity and infrastructure in both the Mars system and the asteroid belt, to form a trade and infrastructure triangle between earth, mars and belt systems. But this will take time.

Back to supply. This emerging demand will stimulate efforts to reduce supply costs, especially in situ resource utilisation to reduce the ongoing costs of getting material off earth. Modern technology (robotics/3D printing etc) will help drive use of material resources from the moon, near earth objects and eventually mars and the belt to service the space demand. This will need supply of infrastructure and services.
Perhaps most important of all for long-term supply will be the innovation driven by solving distinct and difficult challenges involved in developing the space economy, especially beyond earth-moon space. Labour costs will be high and so robotic solutions to new problems will be needed. And the results of this innovation are likely to have uses on earth as well .

So there is great potential for growth in the space economy, with some recent research suggesting it could grow from $300bn -$400bn or so up to $1trn or more by 2040. This is regarded as over optimistic by some. But there is much uncertainty about the pace and direction of this economy - which actually opens up real possibilities for unexpected rapid growth in some areas alongside disappointment in others.

Forecasts like these beyond the next 10 years are likely to be dominated by radical uncertainties (unknown unknowns) and should be treated with caution. Yet the evidence is strong that the space economy will grow, especially as reusable rocket costs fall.

I will explore these issues in more detail in future posts over the next few months.

But what do others think?
Where and in what activity will the space economy grow most over the next few decades - and beyond?
What will drive sustained demand in earth-moon space? And how quickly could activity in the Mars system and belt grow to match that in earth-moon space?
What other future innovation beyond reusable rockets could become game changers?