A broader range of applications in communication and security, as well as new industries such as space tourism and space-based solar power, is set to drive strong growth over the decades ahead.
Projections and opportunities
- Space economy
The space economy is reaching an inflection point and is poised to grow from USD 386bn in 2021 to around USD 1tr by 2040, in our view.
- Space and communication
As satellite technology continues to improve and costs fall, navigation devices, broadband, and earth observation should become more reliant on satellite services. Additionally, satellites offer entirely new possibilities surrounding big data.
- The new space economy
Longer term, the opening of the space economy may provide solutions to address environmental and resource scarcity issues through big data or space-based solar technology. Space tourism offers another avenue for space commercialization.
- Potential for industry disruption
While the satellite industry should continue to dominate the space economy due to its importance to the communication industry, we expect new space applications to offer the strongest growth, as the space economy starts to have significant spillovers across various industries.
- Space and security
The militarization of space is accelerating, prompting many countries to increase funding for space-based threat detection, weaponry, intelligence gathering and communications, as well as counter space technology.
- Investment opportunities
In our view, investment exposure at this early stage is best gained via listed companies in the aerospace, satellite, communication, defense, and security industries, and in space travel services segments. Existing private companies as well as new space startups may offer opportunities in private markets.
Some near-term drivers of the space economy include the first stage of reusable rocket technology , which should drive a sharp fall in satellite launch costs, the first commercial space tourism flights to low earth orbit, and NASA’s PACE and ARTEMIS missions.
Main contributors - Rolf Ganter, Ashim Thakur, Michelle Laliberte, Nathaniel Gabriel
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For more, see the one pager on the Space economy.