Credit: ESA/CNES/Arianespace
Analysts from Citigroup published a report showing that the space industry is heading towards a milestone by 2040 – reaching $1 trillion in annual revenue.
According to the report, the cost of accessing space will decline and will lead to more opportunities for innovation and expansion. The development would also enhance services related to satellite broadband and manufacturing.
Since 2010, the space industry has expanded 70%. The report by Citigroup is in congruence with forecasts by the Bank of America, Morgan Stanley, etc. In 2020, the value of the global space economy will reach $424 billion.
“Revenue from manufacturing, launch services and ground equipment will make up the majority of the revenue growth in the satellite sector,” Citi said. “However, the fastest growth rate is expected to come from new space applications and industries, with revenue forecast to rise from zero to $101 billion over the period.”
Space Capital reports that in 2021, private investment in the industry will amount to $14.5 billion. The yearly investment in some 1,700 companies tracked by Space Capital breaks its own record every passing year.
While the industry is booming, companies should also work with other concepts like space-based solar power, moon/asteroid mining, space logistics/cargo, space tourism, intercity rocket travel, and microgravity R&D and construction.”
According to the analysts, “A similar analogy would be attempting to forecast the value of the internet today versus nearly 20 years ago when the term ‘smartphone’ was relatively unknown and before broadband replaced dial-up internet connections,” the analysts said.
“Lower launch costs were pioneered by SpaceX with the launch of Falcon 9 in 2010,” Citi said.
“Fundamentally, with the new generation of space being driven by the commercial sector, the launch industry is seeing a secular shift from being largely cost-plus pricing-based to being value-based in order to open up new markets and maximize profitability,” Citi further explained. “Previously, the launch market had a limited number of government-supported companies that were concerned more with military capability and creating revenue and jobs than with increasing operational efficiency.”
According to Citi, reusing rocket boosters, which has been a fact of life for the industry, is what drives the decline in launch costs.
Even if there’s a decrease in costs, Citi admitted that the expansion is not easy. There are other things to consider according to them, like the space environment, capital costs, and returns.
Moreover, the perception of space as something only the billionaires can access is something that does not benefit the industry. Citi said that the industry “needs to gain public acceptance before it can be adopted across various industries.”
Opinions expressed by NY Weekly contributors are their own.
