The United States must act now to avoid being left behind in a domain it pioneered.
The past few decades have witnessed the largest changes to the space industry since the Cold War. Between Sputnik 1 and SpaceX Falcon 9, we have seen more nations establish their own defensive space commands, diversify space technologies, and even demonstrate destructive capabilities for the world to see.
Space exploration is no longer a domain reserved for wealthy nations, nor is it the exclusive club it once was, as private companies have earned a seat at the table. Today, there are 90 nations operating in space, and about 10,000 firms and 5,000 investors are involved in the space industry. Billionaires—including Elon Musk, Jeff Bezos, and Richard Branson—at the helms of companies such as SpaceX, Blue Origin, and Virgin Galactic, among others, are launching their own rockets, spacecraft, and satellite constellations and disrupting a market long dominated by giant defense contractors and government agencies.
The world is undergoing a space renaissance—a period when seismic innovations in technology are powering new capabilities—including advances in the manufacture, propulsion, and launch of space systems. Not only have these changes made it possible for the private sector to explore space and conduct more targeted missions; they have also made these activities more accessible and affordable, giving rise to start-ups and encouraging established aerospace companies to pursue innovative projects that were previously deemed too costly or risky. Private funding has also increased over the past five years—a signal that the industry is attracting attention from investors.
Space has matured into a domain driven by a greater number of players—be it nations, private entities, or nontraditional participants—and we no longer need a telescope to see the vital importance of the “final frontier” as a global economic driver. Despite the possibilities that this new space age will bring in the coming years, few are aware of the extent to which the space economy is already reshaping how people live and work, and more important, how governments compete for power and influence.
Since the launch of the first artificial satellite, to the first manned spaceflight, to the first moonwalk, space has long served as a global hub for innovation, pushing the boundaries of the known to expand scientific and technical knowledge.
As the commercial space age progresses, the potential for new space applications is promising. Their projected viability will multiply if established aerospace giants like Boeing, Lockheed Martin, Northrop Grumman, and Raytheon increasingly collaborate with smaller firms that are relatively new to space exploration. One example is the partnership between the satellite start-up Omnispace and Lockheed Martin to develop 5G capability from space.
In the future, the International Space Station will no longer be one of the only access points to microgravity research, because its successor (or successors) will be commercially built. NASA would be just one customer of future commercial space stations, alongside other tenants—both private and government contributors—with aspirations to establish research labs and study various applications of space across industries. Whether it be pharmaceutical companies studying cell growth or tech companies testing manufacturing in microgravity, concepts that may have been perceived as fantasy not long ago will inevitably affect, if not become commonplace among, most sectors.
Coupled with the global impact of widespread digital transformation, as big data and artificial intelligence enable a greater number of sectors to operate with increased efficiency, the space renaissance leaves many questions unanswered. But one thing is clear: governments that explore how to capitalize on increased commercial access to space, which emerging applications to pursue, and which sectors will hold the most promise in this relatively nascent industry could gain a long-term, strategic economic advantage over competing nations. The United States must act now to avoid being left behind in this domain that it so proudly pioneered.
A New Age of Investment
Government agencies—particularly NASA, the US Department of Defense, and the intelligence community—have long held the purse strings to space investment, as supported by the 18 percent increase in US government–funded space ventures last year. According to a Space Foundation report, this is a trend we are seeing in the US and around the world. There was a 19 percent jump in overall international government spending on military and civilian space programs last year; India increased its spending by 36 percent, while China’s investments increased by 23 percent.
Though it’s clear that government agencies will continue to make substantial contributions to the space sector for some time, increasingly affordable costs and technological advancements are making space appealing to a greater number of special-purpose acquisition companies and individual investors, effectively stimulating more innovation. In 2021, the space economy was valued at $469 billion, up 9 percent from 2020, and private-sector investment in space companies exceeded $10 billion. Notably, commercial R&D spending within the space sector has risen by 22 percent annually over the past five years—more than double the US government's 10 percent increase in R&D funding. It’s also worth noting that from 2010 to 2018, US budget allocations for international space R&D have dropped from 70 percent to about 50 percent, and annual funding for privately owned space start-ups more than doubled, despite taking a hit in 2022.
Even though US government R&D spending—about $12 billion a year—continues to outweigh the roughly $6 billion from commercial R&D, there is a real possibility that commercial actors will overtake government funding sources within the next two decades. This could bolster public–private partnership models—a scenario that lends itself well to shifting US priorities in space.
The Benefits of the Space Economy
Since the launch of the first artificial satellite, to the first manned spaceflight, to the first moonwalk, space has long served as a global hub for innovation, pushing the boundaries of the known to expand scientific and technical knowledge. If not for the “Space Race,” essential systems such as communications, air transport, maritime trade, financial services, weather monitoring, and defense, which all rely heavily on space-based assets for their daily functioning, would be nowhere near as advanced as they are today. Comparing the market share of space services in the 1960s—when space was largely occupied by governments and telecommunications firms—with that of today, we can see how the democratization of space, and subsequent investments in space exploration, have enabled the development of much of the modern world’s critical infrastructure. But satellite technology laid the groundwork for—and has delivered the most value to—the space economy since the USSR launched Sputnik in 1957.
The role that satellites play in the day-to-day operations of large corporations is often ignored. Satellites are the backbone of all other functions; without them, inventory monitoring at distant warehouse locations, authorizing credit card transactions in real time, and international videoconferencing would be all but impossible. For the everyday consumer, satellite technology is used to open maps, connect to Wi-Fi, or watch our favorite shows on streaming platforms. Although satellite-enabled internet isn’t quite ready to displace the service provided by cell towers and fiber optic cables, it plays a significant role in the broader networks that millions of people use every day, adding more capacity to existing resources and extending coverage. T-Mobile, for instance, is planning to use Starlink’s network to expand its coverage in rural areas without cell phone towers, and Amazon’s Project Kuiper will bolster Verizon’s 4G, LTE, and 5G networks.
In just over three years since launching the first Starlink satellite constellation, the company now has launched more than 3,500 satellites, and over 1 million customers are paying for its network.
Satellites also allow world leaders to address pressing geopolitical and economic challenges as well as social and economic ones. Governments often collaborate with private companies to obtain satellite images and data that provide valuable intelligence, including information on the movement of troops and the installation of weapons systems – capabilities far more advanced than those available during the Cuban Missile Crisis. In Ukraine, commercial satellite data are providing a bird’s-eye view of the conflict like never before, allowing the world to witness and record events on the ground as they happen. This influence is spreading, too: with geopolitical tensions high in East Asia, and inspired by Starlink’s role in Ukraine’s mounting defense against Russia, Taiwan is actively looking for investors to fund its own domestic satellite network.
Novel Terrestrial and Space Applications
Satellite technology is rapidly advancing, with many companies now deploying smaller and less expensive satellites in low Earth orbit—an altitude of 2,000 kilometers or less. Over the past five to ten years, there has been a significant shift toward using low Earth orbit for satellite broadband connectivity, away from higher elevations, which often have spotty connection due to the large distance between the satellite and the receiver. In our increasingly connected society, a lack of access to high-speed, low-latency internet—let alone broadband internet—is suboptimal and deepens the divide between the connected and the underconnected.
SpaceX’s Starlink has championed the effort to mitigate these types of issues by revolutionizing satellite broadband internet and leveraging low Earth orbit for high-bandwidth, low-latency communications, where more data can be sent and received with little to no delays or lags in time. In just over three years since launching the first Starlink satellite constellation in 2019, the company has now launched more than 3,500 satellites, and over 1 million customers are paying for its network. Despite delays and challenges, OneWeb and Amazon's Project Kuiper are both planning to deploy their own low Earth orbit constellations in the near future, which will further work to bridge the digital divide. On top of these developments in satellite connectivity, new uses could also arise from improvements in satellite imaging—used for mapping, managing disaster response, environmental conservation efforts, and many other applications—in turn creating opportunities for more precise and accurate data collection for future applications.
As commercial space becomes increasingly pervasive, extending access to the final frontier to anyone that can pay for their goods and services, the new space economy will level great power rivalries and global economic competition.
Aside from the terrestrial applications of advancements in space technology, novel applications in space are now also possible due to more frequent, low-cost launches, and the increasing financial viability of long-term missions. A few areas to watch include:
Research and development
Space R&D has been an area of interest for some time, but non-aerospace businesses have been hesitant to invest in extensive projects. This could change in the near future. With the International Space Station scheduled to retire in 2031, private space companies are preparing to embark on new journeys for scientific research in space, journeys they are betting will be cost-effective and hold high return on investment as the market for them grows.
Pharmaceutical firms, for example, could use the environment to cultivate cell cultures to better predict disease models or to discover complex molecules, which grow differently in microgravity when compared with the structured patterns of growth on Earth. And as humans prepare to venture deeper into space, including potential missions to Mars, research outside Earth’s protective magnetic field and atmosphere will be critical to understanding and mitigating the risks of low gravity and radiation on space travelers’ bodies.
Companies producing consumer goods may also want to use the space environment to their advantage to improve design and production processes. Conditions such as high radiation levels, near-vacuum-like conditions, and microgravity could make testing and subsequently manufacturing superior products a not-so-distant reality.
Satellite servicing: the space economy’s foundation
The same technologies that enable satellite servicing could lower the costs of manufacturing goods such as larger satellites, telescopes, space stations, space factories, and storage facilities, while simultaneously addressing current needs. These technologies also could bring prospective businesses, such as space mining and resource extraction, one step closer to realization. As such, building out satellite-servicing capabilities is the first step in advancing manufacturing, construction, and assembly in space. The key here will be building the capacity for heavier launch vehicles so larger payloads can be transported into space.
One fascinating company paving the way in applied robotics and manufacturing is Florida-based Made in Space, Inc. Through the use of microgravity-enabled 3D printers, this firm has been able to provide next-generation manufacturing capabilities aboard the International Space Station, such as 3D-printed optical fibers and ceramic turbine parts. These types of projects support exploration objectives and national security priorities, and they demonstrate the immense potential for new markets to spur commercial activity in low Earth orbit.
(Back) to the moon—and beyond
With the successful launch of NASA’s Artemis 1 spacecraft on November 16, 2022, it is safe to say that the revival of American space exploration is well under way. The Artemis II mission will bring humans along to orbit the lunar sphere and pave the way for Artemis III, a potential 2025 mission that may result in a 21st-century moonwalk. These are the first steps in NASA’s Artemis Odyssey, whose ultimate goal is to conduct the first human missions to Mars in the near future.
In fiscal year 2021, NASA's Moon to Mars campaign, which includes the Artemis program, generated nearly $2.2 billion in tax revenue, contributed nearly a third of NASA’s $71.2 billion in economic impact, and supported 93,700 jobs nationwide. In addition to providing scientific returns, showing geopolitical leadership, and demonstrating the enduring value of human and robotic space exploration, the program will continue to deliver substantial economic growth and enhance the United States’ competitiveness.
Although activities in space tourism are currently limited, the sector is expected to grow far beyond the current suborbital rides to space aboard Virgin Galactic’s SpaceShipTwo and Blue Origin’s New Shepard. Companies like SpaceX and Blue Origin have even marketed their ambitions beyond the moon as a way to help humanity—by creating a city on Mars or by building colonies in Earth’s orbit, where large numbers of people could live and work in space. Improvements in technology, including satellite servicing, laser communication between satellites, and edge computing, could significantly boost the development and viability of such projects even further.
Space: Ripe for Revised Governance
The increased accessibility and lower costs of space exploration have opened the door for numerous industries to explore and create innovative applications. Some comparisons have even been made between where space exploration is headed and the early days of the internet, when businesses quickly moved to capitalize on its potential.
As commercial space becomes increasingly pervasive, extending access to the final frontier to anyone that can pay for their goods and services, the new space economy will level great power rivalries and global economic competition. Although this dynamic is already present in the global economy, many countries considered to be further behind in space exploration—including the United Arab Emirates, Turkey, and South Korea, among others—may well be able to compete with the established space programs of the US, Russia, China, and India by the end of the decade. Take the Emirates, for instance, who in February 2021 (less than a decade after the nation’s space program was created), triumphantly sent its “Hope” probe into Martian orbit and became only the fifth nation—after the US, Russia, China, and India—to reach Mars. Even more notably, it only took the Emirates one attempt.
These types of changes could alter the state of security competition while also boosting the global economy. Despite the challenges that come with space exploration, its potential is immense, and commercial actors—as well as the nation states that have a stake in them—that do not recognize this may find themselves lagging behind. Meanwhile, the rules, competitive practices, and norms that have developed for the internet and the aviation industry can serve as models for how the governance of space could emerge and evolve in the not-so-distant future.
Sophie Goguichvili is a program associate with the Wilson Center's Science Technology and Innovation Program, working on space and artificial intelligence policy. She is particularly interested in the shifting role of technology and how it will influence the future of conventionally resilient democratic nations. Goguichvili received her BA in International Studies from the School of International Service at American University. She is a native speaker of Georgian and has attained full professional proficiency in French.
Cover photo: Spaceship on a mission to ice moon Europa, in orbit of planet Jupiter. 3d science fiction illustration, elements of this image are furnished by NASA. Shutterstock/Dotted Yeti.