In the 1990s we saw the economic shift towards technology and digital innovation. Now, three decades later, we are on the brink of another economic shift, and this ‘new economy’ is focused on space.

________

Throughout history, the term "new economy" has emerged sporadically, each time signifying a seismic shift in the way we do business, innovate, and interact with the world around us. From the Industrial Revolution of the 19th century to the rise of the information age in the late 20th century, these periods marked not just economic transitions, but also cultural and societal transformations.

**Space X-4 Dragon commercial cargo approaches the ISS**
(23 Sept. 2014) Photographed by an Expedition 41 crew member from the windows of the Cupola, the SpaceX Dragon commercial cargo craft approaches the International Space Station. *Image credit: NASA*

During the late 1990s, amid the fervor of the dot-com bubble, this term gained traction, symbolizing a shift from traditional heavy industry to a realm of digital innovation and service-oriented economies. Bill Clinton's presidency, particularly in its later years, embraced this era of technological advancement, emphasizing strategic investments in research and development and promoting increased access to these new technologies.

As Clinton himself remarked in 1998, "We are building a new economy for our people -- a new economy powered by technology, nurtured by the ingenuity of the human mind, and enlarged by trade among all nations -- one that will forever transform the way we live, work, and relate to one another."

The burgeoning space economy mirrors this trajectory. Propelled by technological innovation and fostering a new frontier of advancement, commerce, and collaboration, this economic shift towards space is poised to redefine our relationship with space and our place within it.

(19 Nov. 2013) Three nanosatellites, known as Cubesats, are deployed from a Small Satellite Orbital Deployer (SSOD) attached to the international space station. Nanosatellites, also known as cubesats, are miniature satellites typically weighing between 1 and 10 kilograms. They are used for various purposes such as scientific research, Earth observation, and communication. Despite their small size, nanosatellites offer cost-effective solutions for space exploration and technology demonstration.

A $500 Billion Space Economy

Synonymous to the launch of the personal computer in the 1970’s, the innovation that paved the way for a more recent economic shift was hands down the successful development of the reusable rocket.

This development by the SpaceX Falcon Rocket in mid 2010s significantly reduced space travel costs, expanding access across multiple fronts. More private players are now able to launch satellites, to utilize the International Space Station for research, and to ultimately explore our Moon like never before.

Kevin O’Connell is a recognized expert on space commerce, the global space economy, international intelligence and U.S. national security matters. For almost four decades, he has focused on space commercialization and technological competitiveness and how to advance them in global markets. He has also focused on how these innovations impact U.S. and allied national security. O’Connell’s most recent role was Director of the Office of Space Commerce (OSC) within the U.S. Department of Commerce, spearheading outreach to domestic private space enterprises to foster innovation and bolster market expansion. In addition, O’Connell is a regular author on space commerce issues.

As public-private partnerships grow, entrepreneurs across various space sectors are saturating the market, contributing to scientific progress, national security, and economic prosperity.

According to the Space Foundation’s Annual Report, the global space market reached roughly $546 billion in 2022, growing 8% from 2021: the majority of this growth coming from commercial space companies ($426.6B, 78%). While the space economy is currently dominated by a few major players, its impact is felt by everyone.

Space is leveraged everyday, even through the most menial tasks such as online banking and checking the weather. Kevin O’Connell, former Director of the Office of Space Commerce (DOSC) states,

“[People] don’t have a clue how much their lives depend on space every day. And that’s a huge problem.”

While often referred to as the ‘new space economy’, commercial space activities have a longstanding history spanning decades, overseen and fostered by the Office of Space Commerce (OSC). This Office was established during the Reagan administration in 1988, at a time when the idea of space commercialization was only in the mind of a few visionaries.

While it took several years to get the political and financial support it needed, the OSC finally began to take off around the time O’Connell took office in 2018.

“Thankfully my secretary was wild about space and we had a great space council,” he credits.

As an advocate for the commercial space industry, the OSC diligently monitors industry concerns and opportunities, promotes the integration of commercial capabilities within government spheres, and upholds fair competition for the commercial sector internationally.

O’Connell emphasizes that given that the space industry contributes $5T in economic value to the U.S. economy, it is important that this office continues to grow.

“There’s so much energy and money going into the space economy now. However, it’s gone like this (as O’Connell uses his hand to show the volatility of the economy). So you have to be careful. But the reality is, there’s a lot of investment (and a lot of enthusiasm) in the space economy that we have to sustain.”

Understanding the Size of the Space Economy

“The thing about the space economy,” O’Connell mentions, “is that it is very hard to measure.”

When first arriving at the Office of Space Commerce, O’Connell’s primary concern was the lack of rigor in measuring the space industry and the need for a better methodology of measurement. “It’s analytically difficult to understand what should be in the space economy and how we count it.” For example, he continues, pointing to his phone, “There’s 10 or 12 things on here that are part of the space economy, but it’s very difficult to count. And so I think we’re under-counting the total economic value actually.”

Turning to the Bureau of Economic Analysis for assistance, they aimed to improve the rigor of space economic statistics in order to get the burgeoning space economy on the same level as other national economies in terms of economic data.

O’Connell explains that the important measure of the space economy isn’t necessarily the top number, but its the understanding of how that value is calculated. He explains, “What’s really important is to dive underneath and look at how the different market segments are growing and why they are growing at certain rates.”

There are many ways in which to segment the industry, however a simple way to break it out is between traditional space business and non-traditional space business.

Traditional: The Growing Role of Satellites in the Space Industry

When we think of traditional space business, one main segment comes to mind: Satellites.

Satellites are integral to modern life, enabling communication, navigation, weather forecasting, and a host of other critical functions. Today, the satellite industry constitutes a significant portion of the overall space economy, and is continuing to grow. According to the same annual report by the Space Foundation, which valued the economy at $546 billion in 2022, the satellite sector grew to $28 billion from $24 billion in 2021, representing an increase of more than 17%.

Recent advancements in satellite technology, coupled with the rise of nanosatellites and Cubesats, are poised to drive significant growth in this sector over the next 15 years, estimated to make up 1/10th of the projected $1 trillion space in 2040.

Advancements in rocket technology, including reusable rockets, have significantly reduced the cost of satellite launches. Private launch companies can now send small satellites into orbit for research and commercial purposes at a fraction of previous costs.

The demand for data is growing at an exponential rate around the world. This increasing demand is accompanied by a notable decrease in the cost of accessing space and data. This trend suggests significant potential for extending Internet access to underserved regions worldwide, while also supplying the need for bandwidth from autonomous cars, artificial intelligence, virtual reality, and video.

Non-Tradition: All companies are space companies

Satellites lie at the heart of traditional space business, but with the increased commercialization, non-traditional space businesses are taking part, from art and culinary to medicine.

Right now, we are in a transitional phase. Kevin O’Connell describes, “We are starting to recognize that space is perhaps one of, if not the, platform through which we are going to really drive many of the innovations that we both need and expect in the next couple of decades.”

During the Covid-19 pandemic, we observed a significant reliance on previously developed space assets. We moved to remote communications, we relied on GPS to deliver goods and services, and we saw the emergence of telemedicine and distant education.

Satellite imagery of the California Wildfires in 2017, covering an area of 34.5 by 39 kilometers.

In critical situations, satellites equipped with thermal infrared cameras can report large fires within one hour of recognition to drastically improve response times.

To reduce the vulnerability to unexpected circumstances, O’Connell stresses the importance of continued investment in space exploration.

To his point, a growing number of companies traditionally outside the space sector are now venturing into space capabilities. Various industries, such as agriculture, healthcare, and education, are recognizing the potential of increased technological developments and are now seizing upon the heightened accessibility to participate.

“We are shifting from a world in which people didn’t understand a lot about how space impacted their lives to a growing recognition that many innovations that we’re going to rely on over the next couple of decades will be enabled by space at a minimum,” explains O’Connell.

____________

As we create a new economy in space, the traditional roles of astronauts and engineers are just the tip of the iceberg.

It will require a diverse array of talents and expertise to not only address the challenges that lie ahead, but also to create a sustainable and comfortable ecosystem of culture in space.

“Just about anything you can do on Earth, are things you might want to do, or need to do, in space if we’re going to stick around up there,” states O’Connell.

Imagine a future where there are opportunities for long term life in space. What will we eat? What cultural experiences will we enjoy? These questions underscore the need for a broad spectrum of skills and perspectives in shaping the space economy of tomorrow.

O’Connell underscores the importance of inclusivity in space endeavors. “We need every walk of life,” he emphasizes. “From artists to chefs, from engineers to entrepreneurs, each individual brings a unique contribution to the collective endeavor of exploring and inhabiting space.”

We are creatures of habit, creatures of culture, and creatures who love the comforts of home. As we move into a future where we begin to build a world where visiting space is permanent and sustainable, we need the things that make us who we are.

We need art. We need music. We need good food. O’Connell claims, “We need to encourage that there are all sorts of other people that need to be part of that trillion dollar space economy.”

Growing to a $1 Trillion Economy Sustainably

How do we stimulate an industry that works at a different speed than the government?

With the continuous growth of the commercial space industry and increasing government spending on international defense and civil initiatives, it is estimated that the space economy will reach $800 billion by 2023 and $1 trillion by 2040.

A $1 trillion economy sounds like an optimistic opportunity, but it’s important to ensure we get there in a sustainable and economically sound way. To realize a $1 trillion space economy by 2040, the imperative lies in unleashing private enterprise and drawing upon government experience to provide the necessary demand signals, frameworks, and security incentives that drive market action.

Several challenges must be addressed to attain this economic goal, including fostering entrepreneurship and private finance, implementing fair regulatory reforms, attracting talent from diverse disciplines, and ensuring the safety and sustainability of space activities.

____________

As of April 2024 there are roughly 12,000 satellites in orbit, according NASA’s newest estimation released at the 2024 Space Symposium event in Colorado Springs. Many estimates, including some based on proposals filed with the Federal Communications Commission, predict there to be an additional 58,000 launched by 2030.

In order to support all of these upcoming space services, it’s important to ensure that the orbits are ready for it. “The space environment is changing so rapidly just by the natural course of events, that we are going to have to deal with the problem of space debris,” states O’Connell.

The signing of Space Policy Directive 3 (SPD3) in 2018, a policy on National Space Traffic Management, signaled the country’s serious commitment to addressing the problem of space debris.

The directive highlighted three key points: the urgency of combating space traffic and debris, the importance of international partnership, and most importantly, the need to leverage the private sector, when previously, it was solely monitored by the Department of Defense.

With the number of satellites expected to more than quadruple in the next decade, space debris and traffic are not problems that we can sit around and address slowly, he claims.

If we don’t deal with the growing amount of space objects now, O’Connell forecasts, current problems will be exacerbated into long-term irreversible problems, such as the Kessler effect, ultimately impacting how far and fast we go in the space economy.

The Kessler Effect is a real phenomenon in space where orbiting debris, with some dating back to 1957, pose a significant challenge. Many of these fragments remain in space for extended periods until they either naturally de-orbit or transition to a ‘graveyard’ orbit. This effect occurs when these space objects collide, generating a vast field of debris that renders the orbit unusable not just for a few years, but potentially for centuries, causing substantial damage to our orbit.

There are millions of objects traveling in space, ranging tiny centimeter-sized paint chips to discarded rocket bodies over 33 feet long. But anything traveling at speeds of 17,500 mph can inflict considerable harm to anything it comes in contact with.

A Path Forward for Space Debris Removal

Addressing the problem of over-population in space is a daunting and expensive task, but given the increased awareness of the issue, significant strides have been made.

Kevin O’Connell outlines four “tools” for mitigating the space debris problem, starting with preventing the creation of new debris during space missions.

Unlike in past missions when the creation of debris was not a concern, new missions consider innovative engineering designs and materials to proactively mitigate this problem.

The second tool is space situational awareness (SSA). The Department of Defense (DOD) emphasizes that space is a contested environment with increasing threats to satellites, thus believes SSA—the foundational knowledge and characterization of objects in space and the environment—is critical. Mitigated through regulation, new systems and processes, and cloud-sharing data, such as the publicly available website, spacetrack.org, this tool aims to enhance understanding of potential collisions with space objects, fostering timely communication among space operations.

The third, long-term, tool is space traffic management. This involves organizing space activities through international norms, practices, and standards.

Most countries are hesitant to permit interference with their space junk without explicit permission. This complex issue of debris ownership and regulatory, legal, and jurisdictional hurdles are all tasks to solve on a government level and will take considerable time.

Active debris removal, though more expensive, remains a viable fourth option. Early-stage companies are exploring cost-effective methods and creative solutions. To emphasize the urgency, NASA is facilitating this crucial work by granting nearly $20 million in total to six U.S. small businesses to advance technologies to address orbital debris challenges and surface dust.

While initial investments in approaching this issue may be government-led, a shift towards a commercial model to space debris removal is foreseeable as economic viability and technological advancements progress.

Regulations to Keep the Pace

Regulatory reform is vital to keeping up with the pace of economic growth. Without it, there’s a risk of hindering economic progress and pushing businesses to relocate to foreign countries.

The future of space exploration offers exciting prospects in Low Earth Orbit (LEO). The upcoming phase of economic growth revolves around on-orbit servicing and manufacturing capabilities, such as satellite inspection, refueling, and repair, along with the potential for in-space manufacturing.

Early successes, such as Orbit Fab’s tanker in space, signify the beginnings of a servicing industry dedicated to maintaining and enhancing satellites already in orbit, laying the groundwork for future developments in orbital fabrication and assembly.

Traditionally, once a satellite was launched into space, its destiny was predetermined; any malfunction or failure left it defunct, contributing to the accumulation of space debris. Now, thanks to on-orbit servicing, there exists the potential to repair and even enhance satellites while they are in space, extending their operational lifespan.

Mitigating the growth of space junk and lowering the cost due to reusability, the opportunity to service in-orbit brings optimism, revolutionizing the space industry’s approach to sustainability and efficiency.

Numerous initiatives are underway to expand activities in Low Earth Orbit (LEO), such as the development of commercial space stations, global internet coverage through satellite constellations, and space tourism ventures. NASA aims to foster a competitive LEO marketplace where it shares space with private entities, freeing up government resources for deep space exploration like the Artemis program.

Kevin O’Connell aptly captures the magnitude of these developments, stating, “I think we may see more economic benefit in our lifetimes from space than we have seen in all of human history.”

As humanity ventures further into space, the opportunities for economic growth are seemingly limitless, as long as they are allowed and growth, protected.

Unveiling a New Economy

A $500 Billion Space Economy

“[People] don’t have a clue how much their lives depend on space every day. And that’s a huge problem.”

Understanding the Size of the Space Economy

Growing to a $1 Trillion Economy Sustainably

Musk’s Plea to Go Back to Space

Orbiting Reflections