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Could the economy get any bigger?

"That's one small step for man, one giant leap for mankind," were the infamous words of Neil Armstrong, the first human to step on the moon in 1969, from the surface of the moon. Man’s first flight to the moon had hooked the attention of the entire globe and the human race rejoiced ebulliently at this achievement. Doors to a previously unexplored, but vast cosmic existence had opened and the future seemed exhilarating.

Not just the scientists, but also the common person had high hopes of great dividends from this remarkable feat. And the benefits did flow to Earth in the form of the establishment of telecommunications infrastructure, insights into the origin of our planet, understanding of the atmospheric & geographic makeup of our neighbouring planets, and technological advancement. However, the idea of humans travelling to space and a thriving tourism industry, faded. It has almost been 50 years since then, but the feat of crewed interplanetary travel has not yet been repeated and the futuristic depictions of space travel seem far from realization. Nevertheless, things have lately started changing and space exploration is picking up new steam. Space travel may be arriving in a much different form than had been imagined, earlier, but things are surely moving fast.

Headlines of earthly billionaire’s space adventurism, have become aplenty, and drawn the attention of governments, institutions, and populations, alike, around the world. The most recent attempts have been of Richard Branson (Virgin Galactic) and Jeff Bezos(Blue Origin), with a high press-covered tussle on shifting launch dates to become the 1st one to create history, but more are certain to follow. From a mere spectator’s point of view these tussles and adventures do seem interesting, but analyzing them from the lens of dialectism, raises certain questions.

The first being, as to, What has incensed this frenziness among these eccentric billionaires? The second being, Are these attempts mere shows of vanity, or are they the inception of something monumental to come?, and the final being, What are going to be the implications of these ventures on common people? To answer the first, on one level, these ventures can be merely reckoned as recreational expenditure by the rich, that are manifestations of the impression of Star Wars on these billionaires' psychology, in their formative years, but adding objectivity to the frenziness, this does not seem the case. Blue Origin’s annual reports reveal that Jeff Bezos’ personal investment in the company has been around $7.5 billion, since its establishment in 2000.

According to another report by Space Capital, cumulative private equity investments in space companies have been around $252 billion in the last 10 years. Just to put things into perspective, NASA alone has invested $200 billion in the last ten years, making these private investment figures somewhat digestible. After reading these figures, recreation does not seem a valid justification for such exorbitant amounts of investment, even for billionaires, which would imply that the space sector does have an unexplored side, for which the race is alive. Nevertheless, Science fiction has been one of the most underplayed aspects of human progress and innovation, for, without it, we never would have been able to invent mobile phones, autonomous driving systems, space stations, AI, and an endless list of extremely useful items. It is what gives food for thought to the realizing ability of scientists and innovators.

All three questions can be answered, by analyzing, what presently is going up there. The space industry is basically divided into two segments- space-to-earth & space-to-space. The space-to-earth segment consists of telecommunication networks, geo-spatial mapping, satellite internet services, and national security satellites, while the space-to-space segment includes space mining(or asteroid mining), interplanetary exploration, and the creation of infrastructure for future space launches(eg- the ISS). The space-to-earth economy, even though in quite a nascent stage, has started developing over the years in form of a greater number of satellite launches (the number of active satellites has increased from 159 in 1969 to 3400 in 2020, a 21-fold increase), more accurate geospatial data collection, broader telecommunication services reach, satellite broadband infrastructure establishment, larger broadcasting coverage, and had an estimated market size of $350 billion in 2019.

A report by Morgan Stanley, projects this industry to reach $1 trillion by the end of 2040, with Internet services, ground equipment for launches, and government spending, being the major drivers. Consumer broadband as a service is going to emerge as the fastest-growing segment and we can already see the haste with which companies like Starlink and Airtel’s OneWeb are trying to be the first movers in the Satellite broadband market, even offering pre-booking options worldwide. This will revolutionize the way people communicate through the internet and bring a huge inflow of new users, who previously could not access the internet, from impenetrable terrains and the poorest regions, making universal access to the internet possible. Highly accurate geospatial data and earth imagery, are helping produce better policies and agile actions from governments and companies around the world. Case in point- The Community mobility reports released by Google, track people’s movements to and from places, clubbed under six major heads of Retail & recreation, Supermarkets, Parks, Public Transport, Workplaces, and Residence, which in turn is helping governments around the world, gauge consumer confidence and the level of economic activities in different regions.

This is also helping governments in taking more effective measures to curb mobility, in times of increasing COVID-19 cases. One more considerable area where this real-time earth imagery data, is going to be utilized, would be the autonomous driving systems. These systems will require to have reliable and accurate traffic and road condition data, which won’t just be available with the help of the car sensors, considering they are not going to be present everywhere every time, thus necessitating to be complemented with a view from above, which could only be given by a whole web of satellites. The applications of this technology are endless. Some prime areas, where the troves of data generated by these satellites are presently being utilized are the mining sector, disaster mitigation & management, urban planning, agricultural planning, water resource management, and climate change monitoring.

These developments in the space-to-earth sector have been an outcome of more than seventy years of investment in space exploration and the benefits that these initial investments have brought, make the rationality behind them, absolutely justifiable. Compared to the size of the space-to-earth economy, the space-to-space category is almost non-existent, but its present size should not be a prognostication of its future progress potential. The proper commercialization and the exploitation of business opportunities in the space-to-space sector have been touted as the probable source of the first trillionaires, by experts like Neil deGrasse Tyson. Some of the opportunities that are being assessed presently include space mining, 3D-printing living cells & organs, production of fluoride-based optical fibres (10-100 times faster than earth-produced optical fibres), and in-space satellite manufacturing. Microgravity offers a whole new environment of existence that can never be replicated on earth and these novel conditions, are what offer humans the ability to even manufacture living organs in space. Space mining, among these opportunities, has been the most discussed, because of the sheer implications that this would have on life on Earth.

A database of asteroids reveals that there are approximately, presently identified, 711 asteroids each of whose value exceeds $100 trillion. There is almost an infinite amount of supply of minerals and precious elements in the galaxy, which cannot even be monetarily quantified. Even if a tiny fraction of these asteroids could be mined, it would upend the laws of economics. Scarcity is one of the long-standing, limiting tenets of allocation decisions prescribed by economists. However, though we have been able to master the satellite launch mechanisms in the near past, putting an object on the surface of another planet or asteroid and bringing it back to earth, is a whole other dimension, which requires much larger investments, highly advanced technological applications, and more frequent missions. Thus, the realization of these dreams seem farther down in time than any present human could witness, but the progress is sure promising and Japan’s Hayabusa2 mission is testimony to this fact. These endless possibilities in the space economy, do foretell that a huge boom is about to come and many new industries are going to sprout.

The winners are going to be the ones, who enter and survive in the present. Thus, these billionaire’s attempts, seem a commercial venture, after all, to make the most of the next biggest business opportunity, the exploitation of the last frontier, Space. Delving even deeper, it is not just the size of the opportunity that has aroused such heightened interests, it is also the continued investment of the government, be it monetarily or legislatively. Space exploration benefits are like public services, which are non-excludable & non-rivalrous, there is no inherent mechanism to deny the trickling down of technological advancements or other benefits to a particular person. But at the same time, the government cannot charge or tax anyone specifically for funding its ambitious space programs. Thus, to overcome this dilemma and fund a beneficial project, that would ensure the progress of the human race for years to come, the government took initiative and invested whatever it could within the bounds of its existing taxation structure, to give a fillip to new-age private space companies. This has played out advantageously for all the stakeholders in the US.

Take the case of SpaceX, the company has cornered almost 60% of the global satellite launch market and is preparing missions to put humans on the surface of Mars. The cost of the martian project was estimated, by Elon Musk himself, in 2016, to be around $10 billion and there were no sureties whether this would produce any tangible benefit for the life here on earth, except for being a very expensive raincheck for the possibility of life on another planet. Nevertheless, these projects are the stepping stones to the human race’s drive to become an interplanetary species. Given the previous experience of public backlash, that the US government received for its $2.5 billion Mars Curiosity rover project, it became clear, that the space sector required private intervention, for gaining headroom to invest in certain projects that governments would never be able to undertake with their public funding sources. So, the government started supporting these companies, by giving out projects on a contractual basis that involved satellite launch services and the upkeep of space infrastructure. The opening up of the space sector for the private companies in a meaningful manner encouraged competition and helped in drastically reducing the costs of satellite launches from an average cost of $10500 per kg in the 1990s to just $1500 per kg in 2021.

US military has awarded contracts worth $12 billion to ULA & SpaceX, between 2012 & 2019. SpaceX won a $2.9 billion contract from NASA to let it use Starship for ferrying astronauts to the surface of moon. All this has led to the private space sector becoming more vibrant and sustainable for commercialization, which has, in turn, benefited the human race as a whole. Thus this proves that government expenditure in any new rise sector is of utmost importance, to generate interest and crowd in private investment. The naysayers for space exploration often put forward the argument that the money that is being utilized for it, can be better put to solving problems, like poverty, hunger, and climate change, here on earth, to make it more habitable. An apt counter to this argument would be the quantified benefits that the $22.6 billion annual budget of NASA has on the US economy. “NASA supports labour income of $23.7 billion per year and total economic output of $64.3 billion annually. It has generated $7 billion in tax revenue for the government annually.

3,12,000 jobs are supported by NASA around the USA, with the average pay being 20% higher than that in the general economy. NASA has contracted out nearly $20 billion worth of manufacturing contracts to private companies, who in turn have their own positive impact on the economy.” Space exploration is helping fight severe food shortages in poor regions like Africa, it is helping take education to the remotest part of the world, it is making the lives of disabled people vibrant again, it is helping people reach out to their loved ones anytime they want, it is helping make Earth a better place to live on, every day. Human race is eventually going to need, to become a multi-planetary species, be it the consequence of an asteroid impact or any climate catastrophe or a nuclear war or any other mishappening, which even Stephen hawking recognized, in one of his speeches. So it is better if we prepare for it now when we have eccentric billionaires to back the program than wait for the economy to get bigger and reap the benefits here on earth.

Keshav Khemka
Undergraduate Student At SRCC


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