Science & Technology

Private Space


Who's spending money in outer space? From an informative feature in Popular Mechanics:

The largest sources of space-based business are satellites, which generated $138.8 billion products and services, or 55 percent of the global market overall. Direct-to-home-television beams and global positioning systems drove the numbers, with those two industries generating a combined $20 billion in the global economy. "Space has never been as central to our daily lives as it is now," said Joanne Maguire, executive vice president of Lockheed Martin's Space Systems.

The second largest source of space funding is the U.S. government, which in 2007 spent $62.5 billion, or 25 percent of the space global market. That is dominated by Defense Department spending, followed by the National Reconnaissance Office and National Geospatial Intelligence Agency. At the lowest rungs are the National Science Foundation ($0.33 billion) and the Federal Aviation Administration ($0.01 billion.)

Despite the hype, commercial space transportation services (i.e., space tourism) hardly registered on last year's money list, bringing in a relatively small $0.04 billion, or less than 1 percent of the global market.

One thing the article makes clear is that much of the "private" space industry depends on federal dollars. Or, potentially, on federal regulations: "For any carbon cap-and-trade system to work, a database or clearing house that monitors it must be put in place. That, many industry insiders say, creates a market that can only be filled by more robust space-based systems."

Where government money is scarce, though, businesses adapt:

"We are forced to go to the commercial market for satellite launches due to the low institutional funding," said Francois Auque, the CEO of Astrium, which is owned by the powerhouse European Aeronautic Defence and Space Company (EADS). Auque pointed out that when it comes to switching from solely space-based business to services, having little government money makes his company consider business models that bring space to customers: "Commercial services are the engine of Astrium in terms of growth."

Elsewhere in Reason: Spacious articles from John Tierney and Katherine Mangu-Ward.