The Economics of Going to Space
There’s a new frontier market opening up with unlimited opportunities for virtually every sector of the economy. It’s still unrealized as of yet and very few companies have even begun exploring its endless possibilities. It’s the new economy of outer space.
Like the paradigm-shifting industries of electrical power and computer technology before it, space is the next stage in human development. It’s an untapped goldmine of new opportunities and ideas with very few companies actively engaged in it. But it’s not just going into orbit that offers possibilities; space can also inspire new technologies and applications back on Earth.
Space as an industry
The idea of space as a commercial opportunity is a relatively new one. Until recently, space travel was solely seen as the realm of governments and science experiments. But space has already yielded a number of commercial successes via NASA spinoffs. Memory foam, cochlear implants, LASIK, solar cells, freeze drying, and much more all owe its existence to space exploration. These discoveries have led to a number of products and services in virtually every segment of the economy and contributed to everyday life on Earth.
Numerous companies and industries have benefited from space travel and new technologies are developed every year. Space is becoming more accessible to the public now, too, thanks to companies like CubeSat which allows for a cost-effective way to get science experiments and other projects into orbit around Earth.
Companies like SpaceX, Virgin Galactic, and Blue Horizon are the current leaders in space commercialization but still primarily caters to agencies like NASA to service the International Space Station. Other companies like Orbital ATK are also heavily involved in space by manufacturing satellites for communications, scientific pursuits, and defense purposes. For investors though, there are few, if any, pure plays on space travel at the moment.
While still somewhat far-fetched, other companies are preparing for a future in resource mining. Planetary Resources and Deep Space Industries are two companies built on the idea of mining asteroids. Despite data that shows even a single asteroid can contain more gold or platinum than has ever been unearthed in human history, the real mining operations would likely be for water and other gasses used in rocket propulsion.
The economics of space is heavily limited by the cost involved in accessing it. Breakthroughs in propulsion mechanics and launch capabilities will undoubtedly drive its popularity for the mainstream investor for the next decade or so. But as we expand ever further into space and begin building permanent habitats outside of Earth’s atmosphere, the business of space will become more commonplace. In a few decades, space may become a standard segment of the economy alongside industries like technology and consumer staples.