Space Economy Takes Off: What’s in Store for 2023 and Beyond?
Space Economy Takes Off: What’s in Store for 2023 and Beyond?
May 09, 2023INTRODUCTION
In 2022, the collaborative efforts of major players in the space industry, including government agencies, private companies, and space exploration enthusiasts, have resulted in significant advancements in space technology. The momentum is expected to continue into 2023 with even more breakthroughs and innovations. The growing importance of space is evident as an increasing number of countries recognize it as a critical domain for national defense, security, climate change, and connectivity. One of the driving forces behind the growth of the space economy is the expansion of commercial actors in the industry and the exploration of deep space.
The space economy’s market size is expected to grow to $540.75 billion at a CAGR of 6.84% by 2026.1
This expansion is predominantly led by the private sector, which has played a crucial role in the development and growth of the global aerospace industry. As per the Space Foundation’s Space Report 2022, the space industry consists of more than 10,000 companies and about 5,000 investors. The report also highlights that the space economy’s value reached $469 billion in 2021, with space companies contributing over $224 billion to this figure. 2 The industry is expected to reach $1 trillion in annual revenue by 2040.3
1. FACTORS FUELING SPACE ECONOMY GROWTH: DECREASING LAUNCH COSTS AND INCREASING INVESTMENTS
Figure 1: Launch Costs Plummeting (Base Year 2022)3
Launch costs have decreased significantly, with a fourfold drop in the past decade. This has made it more affordable for companies to launch satellites, resulting in a surge of Earth imagery and communication bandwidth. In the past five years alone, the world has produced 10 times more Earth imagery and transmitted 10 times more communication bandwidth.2
There has also been a significant increase in state-backed investments in space projects worldwide. In 2021, there was a 19% increase in overall government spending on military and civilian space programs, with a 36%, 23%, and 18% increase in spending by India, China, and the United States, respectively. These developments will play a key role in the rapid expansion of the global aerospace industry in the years to come.2
Figure 2: Top 10 Countries in SpaceTech Sector in 2021 (By Investments)2
Amongst all countries, the United States has established itself as a leader in the field of SpaceTech investments, having invested a substantial sum of $28 billion across 3,086 companies in 2021. The country has continued to increase investments in the space industry. Recently, the White House requested $27.2 billion for NASA in the year 2024, a 7% increase over the 2023 enacted level.4 With the continued decrease in launch costs and an increase in funding, the global space industry is expected to experience significant growth and development in 2023.
2. ROAD AHEAD: THE BOOMING SPACE ECONOMY
Below is a look into key trends that will shape the global space industry in the coming years:
Rise of Human Missions in Space: In the year 2022, Axiom Space successfully sent a team of four astronauts to the International Space Station as part of their Ax-1 mission. Additionally, approximately 20 individuals traveled to suborbital space using Jeff Bezos’ New Shepard rocket, operated by Blue Origin. It is expected that the number of space travelers will continue to rise in 2023.5
Surge in Smaller Rocket Launches: In 2023, the focus will be on cost-effective, smaller, and medium-lift launch vehicles such as Astra’s Rocket 4, ABL Space System’s RS1, and Relativity’s Terran 1, along with other startups. While heavy-lift rockets like United Launch Alliance’s Vulcan will also be of interest, the goal will be to reduce launch costs to make it feasible for smaller startups to launch heavier payloads without public funding. Several new rockets may make their first flight this year.
Rise in the Number of Satellite Constellations: The satellite communication and Earth observation sectors are anticipated to confront significant obstacles due to the deployment of multiple large and small satellite constellations. Among these constellations, Pixxel plans to launch six advanced hyperspectral imaging satellites in the latter half of the year. Meanwhile, Amazon’s Project Kuiper is set to begin its initial launches, adding to the already crowded space environment.
Increased Lunar Exploration: In 2022, ispace launched its first-ever commercial moon lander. This event signaled the start of an era of increased lunar exploration, with multiple moon landings scheduled for the following year, albeit on a smaller scale. Firefly Aerospace and Astrobotic are among the companies preparing to launch the Blue Ghost and Peregrine landers, respectively, with a focus on expanding cislunar space infrastructure. SpaceX project, the dearMoon project, funded by Japanese billionaire Yusaku Maezawa, expected to make significant announcements in 2023.6
China and India Taking the Center Stage: India and China have made impressive advancements in the space industry. China completed their very own space station called the Tiangong space station, becoming the first country to do so in 2023. Additionally, multiple experiments are lined up this year to strengthen its presence. On the other hand, India has planned space missions, including solar observation and lunar exploration. The Nation’s cost-effective space programs may make space travel and tourism more affordable.
What’s happening today has been described as a “space renaissance” – a period where advancements in technology are making space exploration more accessible and affordable than ever before. According to the European Space Agency, the space sector is not only experiencing growth itself, but it’s also serving as a crucial catalyst for growth and efficiency in other industries. The deployment of new space infrastructure has brought substantial benefits to various sectors, including meteorology, energy, telecommunications, insurance, transport, maritime, aviation, and urban development. The space industry is set to continue its upward trajectory with even more growth and expansion on the horizon. Of course, there will be challenges along the way, such as technological limitations and environmental hazards. But as the industry evolves and matures, it’s clear that there will be new and exciting opportunities for exploration, discovery, and growth.
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References
1. Globe Newswire 2. We Forum 3. CNBC 4. Payload Space 5. Firstpost 6. Current Affairs