The rise of the space economy

Space holds a myriad of business opportunities, and they are likely to become a bigger part of the global economy in the very near future. For the first time, the space race is not only limited to governments, as varied industries — from digital communication to space colonization — are looking to the cosmos for expansion. Of course, with a new frontier comes the risk of repeating past mistakes.

What is the space economy?

We are in a golden age of space exploration, which has ushered in the potential to create a whole new economy. "Space technologies are delivering greater value to a more diverse set of stakeholders than ever before," said Sebastian Buckup, a member on the executive committee of the World Economic Forum. "As costs reduce and accessibility rises, these technologies could reshape whole industries, and have as much impact on business and society as smartphones or cloud computing." Areas including mineral mining, satellite creation and even space colonization are seeing a surge of interest from businesses, as more industries put their eyes on the skies.

A report by management consulting company McKinsey & Company and the World Economic Forum estimates that the global space economy will be worth $1.8 trillion by 2035, compared to $630 billion in 2023. This includes "both 'backbone' applications — such as those for satellites, launchers, and services like broadcast television or GPS," and "'reach' applications — those for which space technology helps companies across industries generate revenues." As technology improves and costs come down, more unconventional space endeavors like tourism could soon be on the horizon.

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This is a marked change from previous space endeavors. "What's really interesting about what's happening in space is the fundamental transformation of how it's being organized," Matthew Weinzierl, the senior associate dean of Harvard Business School, said in an interview. "For a long time, when most people thought about what we do in space as humans, they thought of it as primarily a government-led activity." Now, businesses outside the government sphere are putting just as much research and investment into space endeavors.

What can we expect?

"If you think about data as being the backbone of the modern economy, and the transmission of information increasingly defining what so many industries are, space is very much at the center of that over the next five to 10 years," said Weinzierl. This could lead to an era of intense innovation. "How might [leaders] use space? How might they creatively think about ways to use the data and connectivity, or eventually the manufacturing, the tourism, and the resources of space, to revolutionize what they do?" The technology could both boost the lives of people here on Earth and expand humanity further into space over time, given proper investment and regulation.

On the flip side, "a growing number of thinkers and activists are concerned that this new wave of space activity is motivated by our worst impulses on the Earth's surface, and could reproduce some of our biggest mistakes," said Politico. "Anti-war activists have protested the perceived militarization of space," while "academics worry that its limitless expanse could worsen the excesses of billionaire capitalism." Others "warn that we're in danger of ignoring decades of evidence about what we've already done to our own planet." Previously, space has had very few regulations and was not easily accessible — in letting many different parties try to profit off the cosmos, exploitation is a risk.