Over USD 350 Billion today and touted at USD 1.5 Trillion by 2040; private space explorations with investments from billionaire entrepreneurs is skyrocketing.
An increasing number of private entrepreneurs is escalating and enlarging the future prospects of the space agency. For decades, since the 1950s, space exploration has been a government enterprise – much of the early trajectory being set by the cold war. Governments of stronger economies use taxpayer’s money to fund and go out into the unexplored universe. But now the game has changed. Meanwhile, private Space investment has become a budding trillion-dollar industry.
And perhaps the biggest pro – it’s helping the government out. Public-private space investment is helping human reach touch new heights in space endeavours. Today, private space companies are spending billions in creating cheap commercial travel, and providing multiple launch stations. Moreover, they are supplying cargos to the International Space Station (ISS).
Private sector interest has helped in reducing the launching cost by 30% when reusing the rockets.
In 2014 NASA’s non-reimbursable Space Act Agreement with top four US private sector enterprises- SpaceX, Final Frontier Design, Orbital ATK, and United Launch Alliance is a symbol of the growing partnership and development of new space investment. In 2019, NASA announced partnership with 13 US companies to develop space technologies to advance Moon and Mars exploration. NASA is also preparing to retake humans to Moon by 2024.
Private Space Investment and Public Collaborations
In 2018 US Air Force chose Northrop Grumman and United Launch Alliance to develop new rockets for military purpose, getting $109 million each. Similarly, Sierra Nevada Corporation has cracked a deal with NASA worth over $1 billion, as per the industry expert estimate.
Currently, annual revenues from private space agency business are worth $350 billion.
Likewise, SpaceX has already taken over the management and maintenance of Launch Pad 39A from NASA for 20 years. The pad is known for the launching of Apollo’s missions to the Moon and more than 100 flights of NASA’s space shuttle.
Facebook has joined hands with SpaceX and Softbank seconded OneWeb for the launching ‘constellations’ of smaller satellites into LEO (Low Earth Orbit), 160 km to 2011 km above the earth’s surface, to provide internet facility to the remote areas which are still not connected through the internet services.
The Insurance side of private space exploration
As space commercialisation started, it compelled the formation of space risk management, done by space insurance companies. Space insurance is a complex and volatile market covering satellite launch and satellite in-orbit, space, spacecraft pre-transit, transit and pre-launch risks, satellite launch vehicle (flight only), satellite contingency and the deepest blow- crashing.
The insurance industry in 2017 collected $715 million premiums and paid $636 million in claims in the same year. According to the Morgan Stanley report, the insurance sector grew around 14%, i.e. from $700 million to $800 million last year.
According to a report by Technavio, by 2022, EMEA will be the biggest driver of the global launch and space insurance market, capturing 79% of the growth.
But the insurance business can be unforgiving. For instance, Swiss Re, one of the world’s leading reinsurance companies, left the market and reduced its exposure to stem losses in its insurance divisions. After the destruction of the private space companies’ Emirati imaging satellite Falcon Eye 1 during the Vega launch failure costing the insurers $407 million, which was more than the premium insurers collected.
Digesting the scale of the Industry
Meanwhile, the aerospace industry, which is experiencing a significant shift towards privatisation, is now worth $350 billion. According to a report by the Wall Street Journal, SpaceX Aerospace agency owned by Elon Musk is worth $30 billion. Likewise, Orbital ATK in 2017 reported a revenue of $1.22 billion.
Billionaire entrepreneurs’ investments in private space exploration industry has fuelled intense rivalries combined with ambitions.
Amazon’s Jeff Bezos is the richest man on Earth. He considers his aerospace agency Blue Origin to be significant in ‘heavy lifting and creating low-cost space infrastructure’. Moreover, his aims include building reusable rockets to reduce launching cost. Furthermore, Bezos is heavily investing in Blue Origin by selling $1 billion of Amazon stock in the early week of August. Within a few days, he sold shares worth of $1.8 billion to fund its aerospace agency.
Also, projects getting spurred by private competition are the development of space tourism and development of permanent settlements on Moon and Mars. For instance, SpaceX and Blue Origin are the companies at the forefront of plans to launch first tourists into space.
Future projects of size and scale – Over a trillion USD by 2040
As per US investment bank Morgan Stanley’s estimates, current annual revenues from space agency business are worth $350 billion. Moreover, this figure is expected to grow to $1 trillion by 2040. Similarly, the US Chamber of Commerce estimates the commercial space agency to be worth $1.5 trillion by 2040.
OneWeb satellites, Telesat and Amazon’s Project Kuiper are competing to create mega-constellations. This aims to provide worldwide broadband service from Pole to Pole. Furthermore, space hotels, celestial advertising billboards, cosmic business insurance, are other major consumer-facing business prospects. Another major path-breaking idea is in-space manufacturing where a few private aerospace companies already have vested investments.
The biggest potential comes from space explorations to evaluate the potential of mining asteroids for minerals and resources.
However, one negative aspect of the increase in space endeavours from Earth is the growing amount of “space junk”. Varying sized – from tiny water crystals to massive trucks – space debris is hurtling around the earth 25 times faster than a bullet shot from a pistol. Consequently, at these high speeds, debris even the size of a grain can heavily damage a spacecraft or a satellite. Similarly, satellite jam in space is likely to be amplified as private space investment agency matures into the touted trillion dollar-business by 2040.
