Investing in a $1.8 trillion space industry

The frontier of space is on the brink of a transformative era, poised to become a vital component of the global economy. Projections indicate that by 2035, the space economy could burgeon to a staggering $1.8 trillion, fuelled by the proliferation of satellite and rocket technologies.

Space-enabled innovations already underpin various facets of modern life, from weather forecasting to the ubiquitous presence of smart devices like watches. However, the influence of space technology extends beyond traditional boundaries, with industries spanning retail, consumer goods, food and beverages, supply chains, transport, and disaster mitigation poised to reap the rewards of space-based innovations.

As costs dwindle and accessibility broadens, these technologies hold the potential to revolutionize entire sectors, rivalling the transformative impact witnessed with smartphones and cloud computing.

A recent joint report by the World Economic Forum and McKinsey & Company delves into the intricacies of this burgeoning sector. Drawing insights from experts across space and adjacent industries, the report paints a comprehensive picture of the trajectory of space technology and its profound ramifications on various sectors.

Here’s a glimpse into what the future holds until 2035:

Expanding Economic Horizons: The space economy is poised for exponential growth, with projections indicating a leap from $630 billion in 2023 to $1.8 trillion by 2035. Key drivers of this growth include communication technologies, positioning systems, Earth observation services, and more.

Diversification of Impact: The influence of space technology will extend beyond the confines of space-related activities, gradually infiltrating sectors like ride-hailing apps that rely on satellite-based technologies, indicating a broader spectrum of economic influence.

Enhanced Connectivity: Five sectors, including supply chain and transport, food and beverage, defence, retail, and digital communications, are anticipated to contribute significantly to the global space economy by 2035, fostering enhanced connectivity across various domains.

Beyond Financial Returns: Space technology is poised to play a pivotal role in addressing global challenges, ranging from disaster management to climate monitoring, thereby offering returns that extend beyond financial gains.

The expansion of the space economy is further propelled by diminishing launch costs and continuous commercial innovation, facilitating a surge in satellite launches and a decline in data prices. Moreover, a diverse array of investors, both state and non-state, are funnelling unprecedented investments into the sector, surpassing $70 billion in recent years.

The advent of space tourism, once relegated to the realm of science fiction, is now a tangible reality, with revenues projected to reach billions by 2035. This burgeoning industry promises novel opportunities for ultra-high-net-worth individuals seeking in-orbit experiences.

The nexus of a conducive space policy framework, innovative business models, and a thriving space economy is crucial for advancing civilization. By harnessing the full potential of space technology, businesses across sectors stand to unlock unprecedented opportunities, ushering in a new era of economic prosperity and societal advancement.

Space technology’s transformative potential extends far beyond mere economic gains, offering solutions to some of humanity’s most pressing challenges, from climate change mitigation to socioeconomic disparities. Embracing this potential equips both public and private entities to steer the course towards a future brimming with possibilities.

While projections hint at a $1.8 trillion space economy by 2035, the actual figure could surpass $2.3 trillion given enhanced data accessibility and reduced entry costs. Conversely, obstacles hindering space access and significant terrestrial technological advancements could dampen growth, leading to a downside estimate of $1.4 trillion.

In essence, by embracing the boundless potential of space, stakeholders can chart a course towards a future defined by innovation, prosperity, and collective advancement.