Business leaders and global innovators are always on the lookout for the next big investment. These days it is likely to be something out of this world.
The space industry with its expeditious rise in recent times has caught the eyes of investors worldwide, particularly with the widespread commercialisation opportunities it presents.
Big billionaires have lost no time jostling for pole position in the space race, like Elon Musk and SpaceX, his multi-million spacecraft manufacturer and satellite communications corporation, which was the first private commercial company to successfully launch a spacecraft and return it to Earth in December 2010.
Other business moguls in the space venture include British entrepreneur and businessman Richard Branson and his spaceflight company Virgin Galactic, and Jeff Bezos, the American entrepreneur and former CEO of e-commerce platform Amazon who hopped on the space bandwagon as early as 2000 with his company Blue Origin, a privately-funded aerospace manufacturer and sub-orbital spaceflight services company.
Such relevance of the space industry with every incremental step into the future is clear to Danielle Wood, assistant professor and director of the Space Enabled Research Group at the MIT Media Lab, who asserts that the work in space should be seen as important to investors as it fuels changes in productivity and businesses back on Earth, on the “T-Minus 60: The Race to Commercialise Space” panel discussion at Bloomberg’s New Economy Forum held in Singapore this year.
“In the next few years, we are going to see humans do activities in space that are going to fundamentally shift relationships with locations beyond Earth,” says Wood. “Yet, at the same time, by monitoring activities on the Moon or Earth from space, all this feeds back into services for Earth.”
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According to research by Yale Insights, the global space market is estimated to reach US$1.25 trillion ($1.7 trillion) by 2030, after taking centre stage as a hotbed for innovation, technological advancement and core investments. On this note, Wood shares that the sector is no stranger to funding support from the public and private sectors alike, though governmental money has continued to be a primary source across different geographies.
“Commercialisation of space is happening, with support from government policy,” says Wood in a separate interview with Bloomberg anchor Haslinda Amin at the forum. “Take the National Aeronautics and Space Administration (Nasa) as an example, the organisation currently has a policy that seeks to encourage commercial activity in space, which has the United States government as an ‘anchor tenant’ for its work.”
“Space is a public-sector endeavour, meaning improving Earth and undertaking research, including what is happening in material sciences and to the human body in the space environment, as public services,” Wood explains. “This is how we bring space back to Earth.”
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However, in the last eight years, private investment has also become a material part of the equation, in terms of funding support in the space industry. In 2021, start-up space companies were observed to attract US$15.4 billion in private financing in 2021, more than double the US$7.7 billion in 2020 and over 10 times what was invested in 2014.
With her experience in private sector partnerships with major players in the industry like Musk’s SpaceX, Flavia Tata Nardini, co-founder and chief executive officer (CEO) of satellite manufacturing company Fleet Space Technologies, bears witness to the uptrend while echoing Wood’s feelings about the dynamic relationship between businesses built in space and developments on Earth.
“Years ago, Musk’s incredible idea for rockets to launch satellites in space has since created a viable business opportunity for my company, where he chose to launch the satellites that Fleet Space Technologies produces, which allowed my business to flourish,” Nardini says. “In exchange, we also find critical minerals to support Tesla [Musk’s multinational automotive and clean energy company].”
“Just like that, space has become an enabler of resolving significant issues on Earth, across various sectors,” she adds.
Sustainability concerns
While the panellists note that the space industry has grown with immense development, complexity and “incredible speed” over the past 20 years, the contributions made by space are not without concerns, particularly in the realm of sustainability and greener energy transitions.
“Within space, there is already that need for a sustainable physical environment for operations to run smoothly,” says Hélène Huby, co-founder and CEO of spaceship manufacturing firm The Exploration Company. “Considering how there is an immense amount of critical infrastructure running these systems in space, I think we’re going to see much more capacity for spaceships or vehicles that can remove threats such as debris in space in future.”
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In response to this issue, Wood raises the introduction of a Space Sustainability Rating that her team at the MIT Media Lab, as part of international cooperation, is working on. This is a method to incentivise organisations to reduce waste debris when doing their work around Earth’s orbit. “We also need to think about what is going to happen when more people start operating on the Moon, for example, which is a place with a fragile environment that we need to protect. Although the Moon is not yet busy with human activity at the moment, that is very much on the horizon,” says Wood.
“At this time, we are reaching out to private companies to voluntarily hold a space for this sustainability rating and participate in this way to show their environmental sustainability commitment,” she adds. “It’s a way that the private sector can help address the sustainability challenge that is not being fully addressed by governments.”
“We need to continually ask ourselves what sustainability challenges we are creating in space, what issues we are already thinking about addressing, and which ones we want to avoid,” reminds Wood.
That being said, there remains the problem of environmental degradation and energy wastage that activities in space create. According to research by Advancing Earth and Space Science (AGU), black carbon emitted in the stratosphere by space rockets is reportedly nearly 500 times worse for the climate than similar emissions on or near the surface of the Earth. This serves as a cautionary foreshadowing of severe global warming consequences that come with the “billionaire space race,” particularly after Bezos famously travelled to space earlier in July 2021 on Blue Origin’s New Shepard, a sub-orbital space tourism rocket, as part of the company’s plans to use such vehicles to offer joyrides to wealthy thrill seekers in the future.
Fleet Space Technologies’ Nardini acknowledges that the space industry has always been known to be infrastructure-heavy, expensive and high on energy consumption. “But this has been changing and this inevitably changes the dynamics in the ways we engage with space,” she says. “By looking more into reusable rockets or smaller satellites that my company produces via 3D printing, such an energy transition is going to be a greater reality in the space industry.”
“This is what is solving problems here in space, by moving into renewable energy in space in order to save our world here on Earth,” Nardini adds.
“Environmental, social and governance (ESG) is important in the space sector, and I encourage the sector to use the terminology more,” says Wood, building on Nardini’s point on the rise of renewable energy transition in the space industry. “A large part of the idea is how to ensure first that we design systems that reach every kind of end user, and the second is that we take care of the space environment around the Earth we’re operating in. Lastly, we need to try brand new things never seen before, but also be able to plan in advance to not create the types of pollution that we already have on Earth.”
China’s lead
On the topic of who’s leading in the space race, China came to the forefront of the conversation, with the panellists noting its sizeable resource capacity compared to its peers.
Nardini points out that a quick look at the number of rockets coming from China is enough to prove that the country is a force to be reckoned with in the space race on a global stage. “This is coupled with how they have the most number of satellite companies in the world,” she adds, accentuating how China’s market share across different sectors within the space industry adds to their burgeoning dominance in space.
Similar to Nardini, Huby notes that China’s advancements in space technology have made a striking impression on the industry at large, particularly at the speed of its development. “I think the work by China in space is very, very impressive. If we look at where China was just two years ago and where China is today, a significant leap in progress has been made,” says Huby, who notes how China became the first country to land on the far side of the Moon, with their Chang’e 4 lunar explorer in 2019.
While Wood also acknowledges China’s strength in the business of space, she cautions against an overt focus on any country’s single direction towards the space industry. “I think the question we should be asking is, which countries are going to set an example for the behaviour that we want to see repeated and that is safe in the future?” she says.
“I see a case where China takes a direct action that then sets an example that either the full community is proud of or has concerns about,” Wood adds.
All in all, reality has it right now that all players are in the space race to win it. “Space is a business where the winner takes it all,” says Huby. “For those interested in investing in space, I would recommend that you look into the technology and be critical in evaluating and choosing the right company to invest in, such that it can become the number one or two in the market in the next five to 10 years.”
