Space Economy: Who is going to win the game?

A huge amount of investments

Since the advent of technology, man has been trying to reach out for the moon and stars. With every passing decade, humankind has made immense progress in learning about space and its secrets, through manned low-orbit explorations and unmanned space exploration projects. The recent times have seen a huge amount of investments in the form of funding from tech giants and public sector companies in the field of space exploration. It is estimated that the global space industry may grow to be a $1 trillion industry by the year 2040.

The investment for a deeper analysis and cost-effective plan to reach into outer space is important. Fields like satellite broadband, high-speed product delivery and human space travel are a few opportunities in the pipeline. The last instances of space exploration have seen a few private companies making an investment. The sixth branch of the U.S. military was established in 2019 – the “Space Force”. Russia and China have also shown interest in this sphere. This brings us to think that there will be a large number of public sector undertakings in the near future.

Morgan Stanley Research has a space team who are studying and examining developments in details to outline the progress in space for investors not only in the private and public sectors but also government bodies like ‘Space Force’.

2020: The Transformation

One transformation shift in technology can give rise to numerous other innovative inventions. In 1854 when Elisha Otis showed a demonstration of the safety elevator, the public could not foretell its benefits in building infrastructure. After around two decades every multi-storey structure in New York, Boston and Chicago was constructed using the safety elevator.

Today a similar idea is being experimented with in the innovation of reusing rockets to bring down the expenses of the launch costs and access in space maturity. “We think of reusable rockets as an elevator to low-Earth orbit (LEO),” say Morgan Stanley Equity Analyst Adam Jonas.

Private space exploration companies are also developing space technologies that are aiming to launch manned landings on the moon as well as aeroplane-borne rocket launchers to launch small satellites to LEO with greater results and responsiveness at a much lower cost, than ground-based systems.

NASA launched a commercial developed manned U.S. rocket to the International Space Station (ISS) in May 2020. This marked another milestone in the relationship between the private sector and the U.S. government in the space industry.

The Space Economy

The investment in the space domain would also impact, other industries like aerospace and defence, IT hardware and the telecommunications industry. Satellite broadband internet access would significantly give short- and medium-term opportunities and benefits.

The Global Space Economy will show a projected growth to 50% in satellite broadband service by 2040, or around 70% in the rarest of scenarios in estimation by Morgan Stanley.

The Growing Interest

Headlines have spoken about private-equity projects in the past, in the meantime, there has also been a growth in public sectors. The Trump administration established a U.S. Space Command in December 2019 with the signing and as part of the National Defence Authorization Act for 2020. This move is supposed to have benefited the U.S. Defence department as well as the aerospace and defence industries at large.

Morgan Stanley estimates that the per megabyte cost of wireless data will be less than 1% as per today’s levels. Jonas said that he believes that the biggest opportunity would come when internet access is given to underserved parts of the world that would also mean an increase in bandwidth speed, for A.I., videos and virtual reality.

Reusable rockets, production of satellites on a large scale, and the maturity of satellite technology would help in bringing the costs down. The cost of launching a satellite has fallen from $ 200 million to $ 60 million currently.

The Beyond

Apart from satellite broadband Internet, other possibilities can also open up, like product delivery using rockets, private space travel, mineral extraction from asteroids etc. Large scale investments from private and public companies are firing a significant development in technology.

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