The Emerging Space Economy

[DavidLondon]

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?

[Noclevername]

Specific number and date predictions are almost never borne out by actual events. "It's hard to make predictions, especially about the future."

I think large scale activities further out in the Solar System might take until late this century. But near Earth and Lunar endeavors will blossom in the next few decades, though I doubt they're reach the hundreds of billions in business done by then.

As you said, robotics, materials processing and small scale custom manufacturing will play a large role; already, multiple proposals for a Lunar base and a crewed Mars landing are driving more innovation in those fields. Given the difficulties recently experienced in asteroid sample returns, mining small bodies will probably lag behind at first, though they have the potential to outpace the Moon in some areas of material extraction.

Other areas just begging for expansion are space debris cleanup, test beds for human habitation such as stations with centrifugal sections, Earth and space based attempts at fairly self sustaining life support biospheres, and perhaps space solar power if we can manage to come up with both radiation-resistant long wear photocells, and a cheap means of manufacturing them in bulk. A bit longer term, Lunar ice mining and processing for rocket fuel.

I consider things like space hotels a much longer term endeavor. They probably won't happen until large scale space construction becomes much, much cheaper. The super-rich who will be their primary customers are just not numerous enough or reliable enough to support such an expensive industry. Human life support in space is a goal, not a means to a financial end. Space won't become a tourist trap for quite some time.

As far as real space colonization goes, IMO that might be semi-plausible by mid-century, more likely the three-quarters mark. It will require a matured industrial infrastructure capable of both building and maintaining the necessary habitats.

[Garrison]

Until now the defining cost in exploiting the solar system has been launch costs. Even if you came up with a way to build some cost effective solar power satellite, or orbital manufacturing platform, or whatever, the sheer cost of getting it into orbit would immediately render it uneconomic, not to mention the low launch cadence of expendable rockets made maintaining a long term project harder still. With the much lower launch costs and a much quicker launch cadence a whole lot of ideas will become feasible, which of them will succeed is the big question, and the one where you could make a lot of money if you guess right.

[Spacedude]

If mining the asteroids is a future goal then a unique metal ball named Phyche could be the jackpot of the solar system. It's believed to be the metal core of a protoplanet which lost its outer layers during an impact billions of years ago...

"How much is ‘16 Psyche’ worth?
Some think that the metals that comprise Psyche could be worth about $10,000 quadrillion. The global economy was worth about $142 trillion in 2019."

https://www.forbes.com/sites/jamieca...h=4e030f3515a5

[DavidLondon]

If mining the asteroids is a future goal then a unique metal ball named Psyche could be the jackpot of the solar system...

https://www.forbes.com/sites/jamieca...h=4e030f3515a5

Thanks Spacedude. Psyche is certainly an interesting Asteroid - and we will learn a lot more from the forthcoming NASA mission to it. On the potential for mining it, I suspect it will not be one of the first asteroids as it is further out in the main belt.

My own view on it is in the separate 'Asteroid Mining' thread post 191 which should link below:
https://forum.cosmoquest.org/showthr...48#post2522448

[Noclevername]

Psyche would also be probably much harder to mine in space conditions than a "rubble pile" where matter is loosely bound.

Until now the defining cost in exploiting the solar system has been launch costs. Even if you came up with a way to build some cost effective solar power satellite, or orbital manufacturing platform, or whatever, the sheer cost of getting it into orbit would immediately render it uneconomic, not to mention the low launch cadence of expendable rockets made maintaining a long term project harder still. With the much lower launch costs and a much quicker launch cadence a whole lot of ideas will become feasible, which of them will succeed is the big question, and the one where you could make a lot of money if you guess right.

Yes, my ideas anticipate progress in the coming years in reusable rockets. Which so far, seems to be the trend. (The value of extrapolating trends was of course proven when we achieved FTL in the year 2000... )

[DavidLondon]

Specific number and date predictions are almost never borne out by actual events. "It's hard to make predictions, especially about the future."

I think large scale activities further out in the Solar System might take until late this century. But near Earth and Lunar endeavors will blossom in the next few decades, though I doubt they're reach the hundreds of billions in business done by then.

As you said, robotics, materials processing and small scale custom manufacturing will play a large role; already, multiple proposals for a Lunar base and a crewed Mars landing are driving more innovation in those fields. Given the difficulties recently experienced in asteroid sample returns, mining small bodies will probably lag behind at first, though they have the potential to outpace the Moon in some areas of material extraction.

Other areas just begging for expansion are space debris cleanup, test beds for human habitation such as stations with centrifugal sections, Earth and space based attempts at fairly self sustaining life support biospheres, and perhaps space solar power if we can manage to come up with both radiation-resistant long wear photocells, and a cheap means of manufacturing them in bulk. A bit longer term, Lunar ice mining and processing for rocket fuel.

I consider things like space hotels a much longer term endeavor. They probably won't happen until large scale space construction becomes much, much cheaper. The super-rich who will be their primary customers are just not numerous enough or reliable enough to support such an expensive industry. Human life support in space is a goal, not a means to a financial end. Space won't become a tourist trap for quite some time.

As far as real space colonization goes, IMO that might be semi-plausible by mid-century, more likely the three-quarters mark. It will require a matured industrial infrastructure capable of both building and maintaining the necessary habitats.

Thanks NoCleverName. Lots of useful comments. I will pick up the supply related points (robotics /manufacturing etc) and the demand points (space hotels/space debris clean up - which I didn't pick up) in later posts focusing on those issues.

On timing I tend to agree that reaching the upper hundreds of billions $ within the next few decades or achieving real colonization before the latter part of the century are unlikely. Space is hard. But I would add that there is considerable uncertainty - and innovation is sometimes capable of driving real transformations at unexpected speed. The switch from horse drawn to motor vehicles in cities happened really quickly in the early 1900s and few people in the early years of air travel post WW2 would have predicted the pace of change over the subsequent decades.

[Noclevername]

Motor vehicles had existed for a long time until they became mass produced and cheaper than a good team of horses. It's also dependent on only a single technological innovation. Similarly, planes were invented decades before air travel got a big boost from all the WWII aircraft factories built.

Learning to build industries and infrastructure in space is more akin to the Age of Steam, replacing sea vessels that formerly relied only on only wind and muscle power. A new paradigm for travel, doing business and commerce in a hostile environment.

[7cscb]

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



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?

Hello David,

I think space tourism will drive the near future in space.

Continued progress in Robotics and AI will all but obviate the need for exploring astronauts. However they will be used to test habitats and health issues related to long term living.
I believe SpacedX's Mars plans are off but their (and others') cheaper payload costs will find a market for more comfortable short duration living spaces in Earth-Moon space. And a growing number of tourists will visit.

With that in mind, I believe a rotating station, providing artificial gravity, will be the game changer. It will allow for easier access for civilians.

Cheers,

[Noclevername]

Hello David,

I think space tourism will drive the near future in space.

I tend to think otherwise. Space tourism is a niche market, and I'm sure nearer term developments will be early drivers of growth long before the costs of tourism and human life support come down enough to become a mass market. Look at "edge of space" suborbital flights that were rosily predicted to drive a trend, but which proved an unprofitable dead end.

Tourism will eventually play a role, but IMO it won't be soon.

[Van Rijn]

I tend to think otherwise. Space tourism is a niche market, and I'm sure nearer term developments will be early drivers of growth long before the costs of tourism and human life support come down enough to become a mass market. Look at "edge of space" suborbital flights that were rosily predicted to drive a trend, but which proved an unprofitable dead end.

Tourism will eventually play a role, but IMO it won't be soon.

I suppose you can debate what it should be called, but I think there will soon be demand from companies and countries without their own launch capability to launch people through private means, so they can do research and quite possibly manufacturing. Especially if Starship works out and allows large numbers of passengers and inexpensive space station construction and supply, but I expect some will happen with Dragon and Starliner. That would make for ongoing demand.

And if Starship does work out, we might be surprised at the drop in price for a week stay at an orbital hotel, especially if they go on to build the proposed larger Starship. I’m still crossing my fingers it gets low enough for a once in a lifetime experience while I’m still healthy enough to partake. I think the chances are low for me, but I’m not ruling it out.

[Noclevername]

I suppose you can debate what it should be called, but I think there will soon be demand from companies and countries without their own launch capability to launch people through private means, so they can do research and quite possibly manufacturing. Especially if Starship works out and allows large numbers of passengers and inexpensive space station construction and supply, but I expect some will happen with Dragon and Starliner. That would make for ongoing demand.

And if Starship does work out, we might be surprised at the drop in price for a week stay at an orbital hotel, especially if they go on to build the proposed larger Starship. I’m still crossing my fingers it gets low enough for a once in a lifetime experience while I’m still healthy enough to partake. I think the chances are low for me, but I’m not ruling it out.

I certainly consider research and manufacturing work, not play. What tourist goes on a vacation to a cement plant or a bolt factory?

I'm not saying there won't be space tourism. But it'll be a consequence of progress, not a driver of it as 7cscb said.

[DavidLondon]

An interesting discussion about space tourism in posts #9 to #12.

They highlight the importance of understanding the economic linkages. Space tourism has the potential to a big driver of demand for activity in space. But how quickly depends not only on developments with the Supply side game changer - cheaper rocket launches, but also other related demand drivers - from suborbital edge of space flights, long distance rapid passenger travel, and research /manufacturing work.

Robert Zubrin in his Case for Space suggests that we are heading towards the introduction of fast, long haul space travel from say LA to Sydney for the same price as a first class flight, which is already 'regularly taken by business execs and jet-setters insufficiently well heeled to have their own private jets'. So we know the demand is there.
I have given my view on Robert's fascinating book in a separate thread on asteroid mining post #187 https://forum.cosmoquest.org/showthr...93#post2521293.
Basically he presents a detailed insight into costs and trends in space exploration and a powerful vision case for investing in space travel. Well worth buying the book. But from my experience of business case development he is just a little prone to what is called 'optimism bias' when he dives into specific detail.

His fascinating Table 1 suggests that the price of getting a kg of stuff (people, fuel, goods) into space can fall from a conventional (ie Apollo Saturn 5) price of US$ 10,000, down to around US$ 2,000 with a reusable Falcon 9 - ie roughly where we are now I think - and then, with a Starship capable of 10 flights down to US$ 25 per kg.

Whether it can fall below $100/kg soon remains to be seen. But even under $1k/kg is a substantial reduction. The key, as Zubrin suggests, is to greatly increase the number of reusable rocket launches. Personally I dont think it matters too much whether they are driven by satellites, government agencies like NASA, private research and manufacturing or long haul travel. The impact is iterative. Reusable rockets have already brought the price down. This brings new demand drivers into range and the subsequent increases in launches helps bring the price down further in a positive feedback loop.
The key unknown is the pace and which demand drivers will provide most momentum. Maybe 7cscb is right that space tourism will be a key driver. Maybe Noclevername with the focus on research and development. Or Zubrin on long haul flights. It could be a mixture of these - and they could help reinforce each other because there are some close linkages.

Its probably worth being aware of a word of warning from the British Astronomer Royal, Martin Rees in his book 'On the Future'. He argues that the term 'space tourism' should be avoided because it lulls people into believing that such ventures are routine and low risk. And if that is the perception, then the 'inevitable' accidents will be as traumatic as those of the space shuttle. It is a very different view to Robert Zubrin's vision of space hotels with honeymoon suites giving incredible views of earth from space. I think avoiding the term space tourism is going a bit far. But it is a reminder that Space Is Difficult. So maybe seeing it as a niche of 'adventure tourism' or similar would be wise. Maybe some kind of voluntary code or even regulation could be introduced... I could say more about space tourism, companies involved and explore potential early developments - but wonder if that would not be for another (new) thread if there was interest.

For this thread, I will explore the 'supply side game changer' in more detail in a future post building on the initial comments in post #1 above. And then explore the demand drivers in more detail over the next few months, beginning with earth focused space activity such as those above. And later focus on drivers and supply sources from outside the earth-moon system.

Whatever happens. I think there are some exciting new opportunities for space exploration opening up in the next decade or two. And the emerging space economy will play a key role in shaping the pace and focus of progress.

[Noclevername]

Well, space is and always will be an inherently dangerous environment. I think it'll take significant dedication to go there; it'll never be a destination for casual travelers. Which is why I wouldn't bet money on space hotels becoming a profitable business for quite a long time. The initial investment to build and maintain one will require large numbers of frequent visitors to pay for itself.

[publiusr]

Something else to think about:
With recent Covid stimulus bills in the trillions, a doubling of NASA’s budget might go unnoticed in an infrastructure bill, where a direct 1% for space bill would get a fight.

[cannongray]

There are no economic reasons for space colonization, but lots of space technologies are now quite usable in our households such as cordless power tools, scratch, and UV resistant lenses, tap water filters and so on.

[DavidLondon]

Motor vehicles had existed for a long time until they became mass produced and cheaper than a good team of horses. It's also dependent on only a single technological innovation. Similarly, planes were invented decades before air travel got a big boost from all the WWII aircraft factories built.

Learning to build industries and infrastructure in space is more akin to the Age of Steam, replacing sea vessels that formerly relied only on only wind and muscle power. A new paradigm for travel, doing business and commerce in a hostile environment.

Some interesting points. Thanks Noclevername. My sense is that innovation is going to become such an important aspect of the emerging space economy that it is worth exploring further what can be learned from experience of innovation on earth.

On vehicles we could both be right. Motor vehicles did take time to develop, improve early reliability and bring down manufacturing costs. It threatened to disrupt the existing horse based infrastructure in cities. And there were network externally issues, such as stables and roads which were constructed for horse driven vehicles rather than petrol stations.
My comment was based on a set of two photos available online of 5th avenue in New York. The first from 1900 showed a packed street of horse drawn vehicles with only one motor vehicle in the photo. The second from 1913 showed a similarly packed 5th avenue with rows of vehicles. This time they were all motor vehicles with only one horse drawn vehicle in the photo. So once access to vehicles and enough barriers were overcome, the switch, at least in cities, was really quick. I think this is typical of innovation of that kind. A new technology arrives amid claims of instant impact, but it takes time to become so established that it can disrupt the underlying institutional inertia around the way things are done and redesign society so it can take advantage of the new opportunities. But then change happens very quickly - often exponentially. Electricity is another often mentioned example, where redesign of how we use energy took decades before the full impact of electricity was realised. Some predict that the second machine age will eventually transform a lot of activity - but it will take decades it to have its full impact and then it will be transformative.

I will try and find out more about steam and sea vessels. I remember being amazed exploring HMS Warrior in Portsmouth Historic Dockyard a few years ago. She was built in London in the 1860s, armour plated and iron-clad with hybrid ship and steam propulsion, and was one of the most powerful warships of her day - helping to drive rapid global evolution in war ship design, which in turn meant that she started to become obsolete within a decade or two of her launch.
You can get a sense at the maritime museums in Portsmouth, Greenwich, London Docklands and Chatham, UK of the substantial infrastructure around building and maintaining sailing vessels (eg rope manufacture), the centuries of innovations to improve sail design and the embedded sailor culture/traditions around these vessels, so the inertia and challenges facing efforts by steam enthusiasts seeking to disrupt all this must have been daunting. Again I suspect the impact of steam took decades to have an impact - and then was transformative. Maybe it wouldn't have happened without the Navy taking a lead.

So there could well be a lot we could learn about space innovation from past experience. I will explore space innovation issues more in a future post when I get round to it. But would be good to hear any other examples of where space could learn from earth experience in the meantime.

[selvaarchi]

Some interesting points. Thanks Noclevername. My sense is that innovation is going to become such an important aspect of the emerging space economy that it is worth exploring further what can be learned from experience of innovation on earth.

On vehicles we could both be right. Motor vehicles did take time to develop, improve early reliability and bring down manufacturing costs. It threatened to disrupt the existing horse based infrastructure in cities. And there were network externally issues, such as stables and roads which were constructed for horse driven vehicles rather than petrol stations.
My comment was based on a set of two photos available online of 5th avenue in New York. The first from 1900 showed a packed street of horse drawn vehicles with only one motor vehicle in the photo. The second from 1913 showed a similarly packed 5th avenue with rows of vehicles. This time they were all motor vehicles with only one horse drawn vehicle in the photo. So once access to vehicles and enough barriers were overcome, the switch, at least in cities, was really quick. I think this is typical of innovation of that kind. A new technology arrives amid claims of instant impact, but it takes time to become so established that it can disrupt the underlying institutional inertia around the way things are done and redesign society so it can take advantage of the new opportunities. But then change happens very quickly - often exponentially. Electricity is another often mentioned example, where redesign of how we use energy took decades before the full impact of electricity was realised. Some predict that the second machine age will eventually transform a lot of activity - but it will take decades it to have its full impact and then it will be transformative.

I will try and find out more about steam and sea vessels. I remember being amazed exploring HMS Warrior in Portsmouth Historic Dockyard a few years ago. She was built in London in the 1860s, armour plated and iron-clad with hybrid ship and steam propulsion, and was one of the most powerful warships of her day - helping to drive rapid global evolution in war ship design, which in turn meant that she started to become obsolete within a decade or two of her launch.
You can get a sense at the maritime museums in Portsmouth, Greenwich, London Docklands and Chatham, UK of the substantial infrastructure around building and maintaining sailing vessels (eg rope manufacture), the centuries of innovations to improve sail design and the embedded sailor culture/traditions around these vessels, so the inertia and challenges facing efforts by steam enthusiasts seeking to disrupt all this must have been daunting. Again I suspect the impact of steam took decades to have an impact - and then was transformative. Maybe it wouldn't have happened without the Navy taking a lead.

So there could well be a lot we could learn about space innovation from past experience. I will explore space innovation issues more in a future post when I get round to it. But would be good to hear any other examples of where space could learn from earth experience in the meantime.

There are two happening right now, that has Elon Musk right in the middle.

The 1st one is electric cars. We have a huge infrastructure right now that extracts oil, refines it, and then distributes it world wide. With the arrival of electric cars, and driverless cars, this is about to be disrupted in a big way (within the decade).

The 2nd is reusable rockets. Again within a decade, single use rockets will go, like the dinosaurs.

[docmordrid]

Morgan Stanley has predicted the "space economy" will be worth over $1 trillion by 2040, and some analysts think their estimate is way too low because do much is going on...

The world's fleet of spacecraft, suborbital and orbital, will be growing by leaps and bounds within a few years. There are also national and commercial space stations in the way; China, Axiom Space, etc. I wouldn't be surprised if Sierra Nevada Corp teams with Axiom Space to use their LIFE* inflatable habitat. Russia wants a sovereign station, but can they afford one? The ISS consortium seems hell bent on building the Lunar Gateway station.

* Large Inflatable Fabric Environment

While decried as "joyrides" by some, suborbital vehicles like those from Blue Origin and Virgin Galactic are piling up contracts for microgravity experiments from DoD, NASA and universities. Key is a human can go along to operate and otherwise tend to the experiment. This isn't trivial.

Orbital vehicles;

Russia will be replacing Soyuz with their more capable Oryel, a high-side wall capsule, similar to Dragon. Formerly called Federation, it'll carry 4-6 passengers.

China will be replacing Shenzhou with something similar to Oryel, but with a 7 passenger capacity. It flew a suborbital trajectory in May 2020. They're also developing their Tengyun spaceplane, which would launch from a mother ship aircraft.

The US already has Cargo Cygnus, Crew and Cargo Dragon, with Crew Starliner in tests. The Cargo Dream Chaser spaceplane should fly cargo to the ISS in 2022, with a Crew Dream Chaser still in development for Commercial Crew Round 2. SpaceX's multi-purpose Starship is the 800 lb gorilla among orbital vehicles, while the NASA Orion capsule is in development hell.

And I'm sure other orbital vehicles will come from Blue Origin and others, some overseas as other countries take advantage of lowering launch prices. Even the UAE has NASA training astronauts.

[DavidLondon]

Morgan Stanley has predicted the "space economy" will be worth over $1 trillion by 2040, and some analysts think their estimate is way too low because do much is going on...

The world's fleet of spacecraft, suborbital and orbital, will be growing by leaps and bounds within a few years. There are also national and commercial space stations in the way; China, Axiom Space, etc. I wouldn't be surprised if Sierra Nevada Corp teams with Axiom Space to use their LIFE* inflatable habitat. Russia wants a sovereign station, but can they afford one? The ISS consortium seems hell bent on building the Lunar Gateway station.

* Large Inflatable Fabric Environment

While decried as "joyrides" by some, suborbital vehicles like those from Blue Origin and Virgin Galactic are piling up contracts for microgravity experiments from DoD, NASA and universities. Key is a human can go along to operate and otherwise tend to the experiment. This isn't trivial.

Orbital vehicles;

Russia will be replacing Soyuz with their more capable Oryel, a high-side wall capsule, similar to Dragon. Formerly called Federation, it'll carry 4-6 passengers.

China will be replacing Shenzhou with something similar to Oryel, but with a 7 passenger capacity. It flew a suborbital trajectory in May 2020. They're also developing their Tengyun spaceplane, which would launch from a mother ship aircraft.

The US already has Cargo Cygnus, Crew and Cargo Dragon, with Crew Starliner in tests. The Cargo Dream Chaser spaceplane should fly cargo to the ISS in 2022, with a Crew Dream Chaser still in development for Commercial Crew Round 2. SpaceX's multi-purpose Starship is the 800 lb gorilla among orbital vehicles, while the NASA Orion capsule is in development hell.

And I'm sure other orbital vehicles will come from Blue Origin and others, some overseas as other countries take advantage of lowering launch prices. Even the UAE has NASA training astronauts.

What's interesting about this is the range of agents working on both suborbital and orbital projects and the mix of government and commercial financed activity. The mix of collaboration/synergies and competition between between the different agents and spillover benefits is more important than being too focused on the timetables - and is likely to mean the overall impact on the space economy is more than the sum of its parts. So my comments in post 1 that the $1trn estimates for 2040 is considered optimistic by some, may well be too pessimistic, as you suggest. But there is still a lot of uncertainty, especially around timing. I still think we need to be honest about the risks associated with putting humans into space (see post 13 above) - it doesn't help when some people call them 'joyrides'.

An example of the potentially creative interactions between agents is the Axiom strategy, outlined in more detail in the separate thread (link below), bringing a commercial dimension to the ISS and then turning that into a long-term legacy spin off when the ISS is retired. Government agency procurement strategies can be designed to help strengthen partnering and collaboration so it delivers more...

https://forum.cosmoquest.org/showthr...-space-station

[docmordrid]

One item I didn't mention is suborbital point-to-point transportation (P2P), both for cargo and passengers. NASA and the FAA recently signed an agreement which included sharing data & setting standards for P2P.

The proposed vehicles for P2P range from a 19 passenger Mach 3-4 waverider design from Virgin Galactic (engines: Rolls Royce) to the SpaceX Starship flying at near orbital velocity.

Starship P2P would fly with or without a booster, with the latter having a range of 10,000 km in ~30 minutes. With a booster, anywhere. Changes to Starship start with using 7-9 sea level Raptors instead of 3 sea level + 3 vacuum. Now add life support, seats, and the cargo version's elevator.

There is already high interest in Starship P2P from the US DoD, SpaceX signing a cooperative research and development agreement (CRADA) with the US Transportation Command (USTRANSCOM) which would include a demonstration flight.

[docmordrid]

Some interesting NASA commercial info in this Twitter thread.

There will be a new Center for the Advancement of Science in Space (CASIS) board, new rounds of Commercial Crew, Cargo and...Destinations (!) starting in the mid-2020's.

New capabilities, lower costs, phasing down ISS (hinting at commercial space stations), developing free-flying platforms, etc.

Thread
https://twitter.com/genejm29/status/1349419794370617346

[DavidLondon]

This post will explore more on the first key point in post #1

1a

"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 bundles of potential demand drivers".

The brutal reality is that it takes a huge amount of fuel to lift anything off the earth's gravity well. The disappointing failure to take humans beyond earth orbit decades after the apollo programme is largely due to the cost of this mammoth task.

Driving down costs
So much weighty fuel is needed that carrying it leaves little scope for an actual payload in a one stage rocket. So two stages are needed. Robert Zubrin's book 'The Case for Space' explores this in detail, so do buy the book.
Zubrin"s (Table 1.1) explains that a traditional Saturn 5/SLS type rocket carrying say a 20 ton payload, costs around $10,000 to shift 1kg of stuff (people, fuel or goods) into low earth orbit.
The booster stage 1 typically costs three times stage 2, so using a reusable stage 1, like Falcon 9 does at the moment, can reduce costs nearer to $3,000 per kg.
By reusing the second stage as well, costs can fall to $2,000/kg.
Further cost cuts can be achieved by building larger craft, such as the Starship, which can heave larger loads at a time. Zubrin reckons that say a 160 ton payload with reusable first and second stages could in theory bring the price down to nearer $250/kg.
Beyond that, the key to cutting costs is to increase the number of launches per year. A Starship increasing its launches from one to ten can, in theory reduce the costs down to under $50/kg.
This is the game changer. Lower costs open up opportunities to supply a much wider range of demands, which in turn increases the number of launches, which brings costs down further in a virtuous circle.

Procurement and demand - government agencies as intelligent clients
Perhaps the most important aspects of reducing costs through enhanced launch demand at the moment are the procurement strategies of government agencies and especially NASA.
Zubrin helps us understand the weaknesses of traditional 'cost plus' contracts which simply result in the big aerospace companies increasing overheads and admin costs in order to bump up profits.
It is possible that this approach also helped build the skills, capability and know how of contractors in what is/was a novel and highly technically complex sector cluster. Views appreciated!

But what is perhaps most important is that NASA has evolved its procurement approach, becoming more hands off and focusing on being an intelligent client - identifying an outcome/service and seeking bids from contractors to propose ways of delivering that service without NASA actively owning physical or intellectual property. Examples are NASA's Commercial Cargo and Crew Programs.

In the Commercial Crew Program, NASA achieves its goal of "achieving safe, reliable and cost-effective access to and from the International Space Station and low-Earth orbit "(*) while contractors get scarce and crucial demand/investment finance to develop a critical capability - such as getting into orbit - which can improve its capacity to bid for contracts from other suppliers in an emerging space launch market.
And so we have SpaceX and Boeing both working to deliver that service while building capability to compete in the emerging market to meet demand for other launch services. SpaceX seems to be ahead right now in a sector which requires expensive, complex and crucial capabilities and so has huge barriers to entry. But the emerging market is still at an early stage and other government agencies are likely keen to develop comparable capabilities in their own enterprises .
(*) https://www.nasa.gov/content/commerc...s#.VjOJ3berRaT

Virtuous circle - Drivers of increased demand - and so further supply cost falls.
So what other activities apart from trips to the ISS, are likely to generate demand for space launch services? I will explore that in future posts on longer term drivers of demand. But for now, what matters is enough short term demand for launches to energise the virtuous circle.

The following post from an interview on supporting the space economy illustrates the impact of lower costs driving a lot more satellite launches.
https://forum.cosmoquest.org/showthr...26#post2528526

Satellites are an important market, but not enough according to Zubrin. He favours long distance rapid passenger/goods travel which is outlined by 'docmordrid' in post #21 above - he call it calls P2P orbital transportation. This is not far off current capabilities and initial high prices could well find a small but sufficient market to energise the virtuous circle - thus lowering ticket costs which helps attract more travellers thus increasing services.
If that is not sufficient on its own, then a mix of 'on orbit' research stations, niche manufacturing, space tourism (including hotels), science and other functions could all help reduce costs sufficiently to energise the virtuous circle. And maybe there is a way of co-ordinating some of this demand to help power this sustained reduction in costs.

So the interaction between demand and supply can help drive the game changing cost reduction in rocket launches.

I will explore the demand drivers further in future key point posts over the coming period.

[DavidLondon]

What do we know about the space economy? How big is it?

I am starting to explore the evidence what we know about the space economy, how big it is and trends, from different publicly available sources.

Below are a mix of eclectic sources. Prob most quoted is from the OECD docs.

As the OECD says: "There is much hype about the space sector". Dare I suggest its not unknown even in Cosmoquest Forum?!

They also point out that measuring it is "a challenging exercise".
So what do we actually know. It's good to try and get a sense of overall perspective.

There is much hype about the space sector and its commercial potential, driving activities in consumer electronics, far beyond space manufacturing and space launchers, with some reason, as it has never attracted so much investment from both public and private actors. Many recent estimates and forecasts from leading consulting firms and investment banks have provided different estimates. This is a challenging exercise, as the space economy encompasses various activities and different value chains (from hardware to digital products far removed from initial space investments). A 2018 report by the investment firm Goldman Sachs predicted that the space economy would reach USD 1 trillion in the 2040s, while a different study by Morgan Stanley projected a USD 1.1 trillion space economy in the 2040s. A third study by Bank of America Merrill Lynch has the most optimistic outlook, seeing the market growing to USD 2.7 trillion within the same

Source: OECD.

I am trying to get a sense of a global perspective rather than focus on particular nations. But there are some useful country profiles in the OECD docs.

Any other sources people can suggest would be greatly appreciated...

The space economy in figures. OECD 2019
https://www.oecd.org/innovation/the-...5996201-en.htm

Space Sector OECD. Oct 2020
Key Indicators and options to improve data.
https://www.oecd.org/innovation/inno...ace-sector.pdf

What is the space economy? European Space Agency.
https://space-economy.esa.int/articl...-space-economy

New opportunities in Space Economy. Dec 2019
https://www.researchgate.net/publica..._Space_Economy

Space Federation Annual Report 2019.
https://www.spacefoundation.org/wp-c...019_Report.pdf

G20 Voices on the Future of the Space Economy. KPMG. 2020
https://home.kpmg/xx/en/home/insight...e-economy.html

How big is the space economy? The Conversable Economist. Dec 2020.
https://conversableeconomist.blogspo...e-economy.html

[Noclevername]

Thank you, David! A lot of research, a lot to unpack there.

[Roger E. Moore]

‘Overheated’ space launch market? The chief executive of United Launch Alliance warned that there are too many venture-funded space launch companies competing for a static number of customers, and called on the U.S. government to encourage investments in other space activities that don’t exist today.

https://spacenews.com/ulas-tory-brun...launch-market/

[Noclevername]

‘Overheated’ space launch market? The chief executive of United Launch Alliance warned that there are too many venture-funded space launch companies competing for a static number of customers, and called on the U.S. government to encourage investments in other space activities that don’t exist today.

https://spacenews.com/ulas-tory-brun...launch-market/

YES. Demand has to increase with supply. There are a great many economic areas to expand into once the price of launch comes down.

[docmordrid]

YES. Demand has to increase with supply. There are a great many economic areas to expand into once the price of launch comes down.

Well, we do have small satellite companies springing up like weeds in a garddn; Earth imaging, radarsats, Internet of Things (IoT), etc. That market is explodoing, and SpaceX has made clear they're willing to offer the Starlink satellite bus for adaptation to other purposes.

[DavidLondon]

‘Overheated’ space launch market? The chief executive of United Launch Alliance warned that there are too many venture-funded space launch companies competing for a static number of customers, and called on the U.S. government to encourage investments in other space activities that don’t exist today.

https://spacenews.com/ulas-tory-brun...launch-market/

Thanks for the article. It is also worth reading the comments at the bottom as well. Together they explore a wide range of issues around the supply side (ULA business model and possible erosion of market power from disruption by start ups/SpaceX with differing views on how well placed ULA is to respond, too much speculative investment in launch firms, etc) and the demand side (the limited demand potential for satellites maybe and potential new demand drivers).

Tory Bruno said too much investment is being poured into risky launch ventures which is fuelling a bubble. He suggested that money could be better directed to new economic activities related to space such as specialty manufacturing,**natural resource development and in-space transportation.*
To be attractive to investors, these new space activities should be dual-use with both commercial and national security applications, Bruno said*

I want to focus more on the demand but first some quick thoughts on the supply side.

Supply Side
In reading some of these comments and looking what is in the economics toolkit, I was reminded of Schumpeterian Mark I and Mark II patterns of innovation. Mark 1 is creative destruction and Mark 2 creative accumulation. Below a quick useful summary of creative destruction from Wikipedia.

Creative destruction https://en.wikipedia.org/wiki/Creative_destruction.
"In fact, successful*innovation*is normally a source of temporary*market power, eroding the profits and position of old firms, yet ultimately succumbing to the pressure of new inventions commercialised by competing entrants. Creative destruction is a powerful*economic*concept because it can explain many of the dynamics or*kinetics*of industrial change: the transition from a*competitive*to a monopolistic market, and back again".

Mark 2 on creative accumulation focuses also on the presence of large established firms and barriers to entry for new innovators.

Given dynamic nature of the emerging space economy, maybe we will be seeing quite a bit of 'creative destruction' for a while yet, with established firms seeking to adjust to rapid innovation and new entrants…?! Neither we nor the firms should be surprised by this.

On the supply side one comment below the article stood out, which sort of links to Schumpeter Mark 1 and 2: "In breakthrough times, there is always over-proliferation followed by consolidation…"

Demand side
This is the most important aspect. The article mentions satellite launches being stubbornly demand inelastic. I am working on further posts looking at the demand curves for space tourism and more generally. We have already explored the issues in the thread.

This is from my post 13 above:

"I don't think it matters too much whether they are driven by satellites, government agencies like NASA, private research and manufacturing or long haul travel. The impact is iterative. Reusable rockets have already brought the price down. This brings new demand drivers into range and the subsequent increases in launches helps bring the price down further in a positive feedback loop.

The key unknown is the pace and which demand drivers will provide most momentum. Maybe 7cscb is right that space tourism will be a key driver. Maybe Noclevername with the focus on research and development. Or Zubrin on long haul flights. It could be a mixture of these - and they could help reinforce each other because there are some close linkages".

So while satellite launches are the most important demand driver for the current space economy, and so likely to attract interest from investors and firms in the short term, further longer term growth is likely to be in sectors like P2P (docmordrid post 21), space tourism (7cscb post 9), small scale custom manufacturing (Noclevername post 2), science research etc.

There is an interesting mix of views on satellite demand in the comments - from those who think demand potential is on the small satellite end, where demand is growing fast, to others who think the large end (eg Starlink constellations) is generating a lot of income eg for SpaceX.

The other area, which I mention briefly in post 1but which is reinforced in this article and by some other posts, brings out more strongly is the role of security / DoD contracts in driving demand. I'm not really sighted on this driver and by its nature there is less available in the public domain. But historically, military driven funding (and cold war style political drivers) has stimulated substantial technological innovation. And the article brings out how important this source of demand could be in the future, for better or worse.

[Noclevername]

Well, we do have small satellite companies springing up like weeds in a garddn; Earth imaging, radarsats, Internet of Things (IoT), etc. That market is explodoing, and SpaceX has made clear they're willing to offer the Starlink satellite bus for adaptation to other purposes.

That's one, but satellite launches were an already-existing market. We could open new fields as space access get cheaper and previously-hypothetical activities become more viable. SSP might become competitive. Fuel depots, asteroid mining, debris cleanup, etc become more easily affordable. Maybe even that space tourism might be within reach.

And the science. Oh, the science we'll see! (Sounds like a Dr. Seuss title)