Space Industry Report

The global space market is valued in the hundreds of billions of dollars and is expected to continue to grow steadily in future years, on a trillion-dollar trajectory, with launch costs becoming lowered dramatically. As the cost of accessing space falls, opportunities for expansion and innovation will increase. The fastest growth is predicted to stem from new space applications and industries.

Space innovation and exploration has become more important to countries around the world. The space economy is set to grow at above GDP growth rates, and has become a strategic domain when it comes to national defense & security, climate change, and connectivity. Space infrastructure makes it possible for new services and applications in areas including energy, meteorology, telecom, aviation, maritime, insurance, transport, defense, communications, data, and urban development.

Market Segmentation

• By type, the space vehicles segment has held a majority market share and continues to grow at a fast pace.
• By end use, the government segment dominates the market as concerns grow around disaster management and national security.
• By application, the navigation and mapping segment leads the market, and the market continues to grow, with more needs for satellite communication to enable Internet access, data transfer, voice/video calls, video streaming, and content and media distribution.
• By region, North America leads commercial space activities with an abundance of entrepreneurs and startups exploring new opportunities regarding space tourism, satellite services, asteroid mining, and others.
• The Asia-Pacific region is emerging as a major player in the space industry. China, India, Japan, and South Korea are making significant advances in space capabilities, launching satellites for communication, Earth observation, navigation, and scientific research. Governments are investing heavily in space exploration and technology development. And in the private sector, businesses are working on satellite manufacturing, launch services, and space applications.

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Satellites

Growing demand for satellite services is a major driver of the space technology market. Satellites have become vital to providing communication, navigation, and observation capabilities, driving expansion in other markets, including telecommunications, agriculture, transportation, defense, and GPS navigation systems. More businesses and governments are relying on satellites for communication networks, Internet access, and data transmission. Companies are creating space vehicles and launching pads that are capable of launching several satellites at one time.

Satellite imagery and Earth observation data are becoming more prominent in markets such as agriculture, environmental and urban planning, and disaster management. Data is being used to make better decisions and optimize resources in response to evolving market conditions, making satellite services across industries a significant driver of growth in the space technology sector.

Reusable Rockets

Reusable launch systems for orbital vehicles are poised to significantly reduce the cost of journeying to space, opening up possibilities for new and exciting space initiatives that are currently too expensive. Companies are focusing on making technically advanced miniature satellites, lightweight rockets, and autonomous cockpit systems via artificial intelligence. This means more availability, easier access, and more affordability to plot more space missions.

To the Moon and Mars

The space technology market is seeing continued expansion of space exploration and commercialization beyond Earth’s orbit. More lunar landings have occurred in recent years, mostly unmanned. The renewed interest is because the moon makes a good testing bed for new technologies that will ultimately be used to land on Mars, using instruments designed to find, extract, and process elements from the surface. The focus of these smaller missions will be on sending autonomous instruments designed to locate, extract, and process elements from the moon’s surface. As technology evolves and costs become more affordable, missions to the Moon, Mars, and beyond become more viable, charting the future for a new era of space exploration and utilization.

There is significant focus on developing colonies on the Moon and Mars for scientific research, resource extraction, and someday even human habitation. Companies and governments are seeking ways to access natural resources on the Moon and Mars to support future missions and sustain life.

Space tourism has also presented lucrative opportunities in the industry, with the concentrated space focus of companies such as SpaceX, Blue Origin, and Virgin Galactic. Developing the capabilities of taking passengers on suborbital and orbital flights is opening up more possibilities for commercial space travel for private citizens.

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Climate Change

Governments are increasingly investing in space innovation to address climate change. Space technology has been recognized as one of the United Nations’ keys to achieving the 17 Sustainable Development Goals for 2030 (source: United Nations Office for Outer Space Affairs). For example, the reflective materials developed to conserve heat in spacecraft are now commonly being used to insulate buildings on Earth. Another example is MethaneSat, which is designed to identify and track sources of methane emissions on our planet, a primary contributor to climate change. There are also projects underway that are using infrared cameras on satellites to monitor thermal emission threats around the world, and using satellite imagery to map tree cover and deforestation.

Growth Drives Job Creation

The space economy is seeing the growth of jobs in various areas. Workers are needed in accounting, marketing, design, IT, manufacturing, and STEM. Launch services in the United States alone rely on advanced manufacturing that is the source of nearly half of all commercial launches, more than any other country in the world, bringing in billions in revenue per year to U.S. manufacturing industries.

Licensing Deals on the Rise

Public agencies are updating policy decisions that are opening up more commercial opportunities for businesses, such as government agencies moving away from building and owning actual assets to license them from private companies. This gives private businesses a foundation to build and scale. This includes transportation services for rockets, crew members, lunar landers, and commercial space stations.

Additional Trends

As research and exploration in space advance, space tourism continues to emerge, with several private companies getting involved to make the concept more tangible for more people in the future. Other growing trends and demands include:

• AI and machine learning
• Uninterrupted Internet
• Space resource utilization (SRU)
• Micro and small launch operations
• In-space manufacturing
• Payload & telemetry data
• Earth observer (EO) data
• An interplanetary transportation system
• Nuclear space propulsion and power
• Space-based quantum communication

M&A

For the most part, M&A in the space sector has remained unaffected by global macroeconomic factors. There is massive capital investment into the market by both public and private sectors.

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The space market’s growth is being propelled by the world’s insatiable appetite for connectivity, data, and insights, as well as the emergence of new players and business models. As technology advances and space exploration becomes a more attainable interest for more people, the space technology market is expected to continue to flourish in the coming years. Investment in the sector is coming from commercial players and government agencies, making it ripe for innovation, competition, and consolidation.

Acquisitions used to be restricted to legacy corporations armed with the significant resources to buy startups and other firms. But now private equity and institutional investors are also getting in on the large transactions. Private equity has been increasing investment in space companies at record levels, especially venture capital, with space infrastructure companies drawing in billions in private investment. Funds are looking for significant returns for giving capital to startups and early-stage space ventures. With more private capital fueling space ventures, companies can scale faster and create innovations that result in further growth in solutions that benefit us both in space and on Earth.

Also, companies are investing resources and engaging heavily in research and development to develop their own intellectual property and intangible assets, which are in high demand by civilians and militaries.

With more infusion of capital, there are accelerated levels of innovation, which lead to more competition. We are seeing more founders, industry disruptors, and startups are getting into the mix, developing new tech that is designed to capture a market presence.

Major players are turning to breakthrough strategies to acquire entities and are deploying capital to deliver value.

There has been a rise in public-private partnerships versus government self-investment. Partnering on private launches is designed for long-term sustainability and affordability for NASA, distributing costs among multiple users and reducing costs. These partnerships also help to avert threats and better manage space traffic and debris, better protecting humans that go into space. The International Space Station (ISS) is also benefiting from the partnerships, driving progress and reshaping the future of what space stations look like.

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