By James Pethokoukis, John Roth, Rich Boling, Mike Gold, & Matthew Weinzierl

Private companies’ ventures into space have received special attention this summer with the flights of billionaires Richard Branson and Jeff Bezos making headlines. But what else is the private sector up to in space? And what might the landscape of the space economy be in the coming years? In a recent episode of Political Economy, I discussed these questions and more with a panel of experts.

John Roth serves as vice president of business development for Sierra Space, a subsidiary of the Sierra Nevada Corporation. Richard Boling is vice president of corporate advancement at Techshot. Mike Gold is executive vice president of civil space business development and external affairs at Redwire Space. And Matthew Weinzierl is the Joseph and Jacqueline Elbling Professor of Business Administration at Harvard Business School.

Below is an abbreviated transcript of our conversation. You can read our full discussion here. You can also subscribe to my podcast on Apple Podcasts or Stitcher, or download the podcast on Ricochet.

Pethokoukis: I think the space economy is on its way to about a trillion dollars over the next 20 years, which just kind of gets me thinking about the potential for the space economy. John, any numbers you can give me?

Roth:
We’ve taken a look at all the studies. They go anywhere from a trillion-dollar
economy to $1.4 trillion economy. We’ve looked at 200 companies that have
concepts or things that they think could be commercial applications in low
Earth orbit. Some of them you may laugh at a little bit and say, “Well, I don’t
think that’s ever really going to be a business,” but others, you can really
envision that if they’re successful, there’s going to be a huge increase in
what kind of business could be done.

I
wonder if you could really print replacement organs in space or create drugs
that there’s no way you could create on the surface of the Earth in
microgravity and the way that protein crystals align in space. It’s so unique. Like
everyone’s been saying, you can’t identify what killer app is really going to
be out there.

Satellite
servicing, for example, is going to be one area. You can move satellites from
one orbit to another; you can repair satellites; you can do orbital debris
removal; you can build satellites; you can refuel satellites. So, just in that
one sector, there is maybe half a dozen to a dozen businesses that could
survive.

How important is the overall development of the space economy that we have a federal government that is interested in going to the Moon and Mars and beyond?

Gold:
Jim, all of these terrific capabilities wouldn’t exist if it wasn’t for the
government. And that’s not just me saying it. We’ve heard Elon Musk saying that
if it wasn’t for the support that he received from NASA and DARPA, there
wouldn’t be SpaceX today. So, while there’s terrific innovation and critical
sustainability coming from the private sector, we must never underestimate the
importance of consistent direction and support from the US government,
particularly as a catalyst for innovation, which is exactly what we saw with
Commercial Resupply Services contracts and the COTS program before that, as
well as acting as a customer for those services.

So,
government needs to act as catalyst, as customer, and having a vision, like the
Artemis program, that, again, is consistent and that we can support and that
will create innovations and commercial sustainability along the way is vital.
We can’t go back and forth, and we can’t equivocate and terminate programs. It’s
important for the private sector to be able to continue to innovate, to have
that consistency and support, again, from the government as catalyst and the
government as customer.

How does one even begin to think
about what the space economy will look like down the road?

Weinzierl:
If we’re trying to actually measure the size of the space sector, that’s a very
complicated thing with lots of little choices in there. And double counting is
for sure an issue, right? Anyone who’s thought about GDP accounting knows
there’s a ton of issues in that. And so, there have been careful studies done
which put the size of the space sector at more like 100 and some billion,
rather than 300. I think reasonable people can disagree about some of those
choices.

The
one thing I would say about whether we are overgenerous and therefore
overoptimistic is that the vast majority of that sector, no matter how you
count it, is still focused on the satellite sector. But a lot of the
projections, going forward, are outside the existing satellite sector. So what
are the different possible paths we might think about? What are the key steps
we need to drive the trend lines up and not get too hung up on whether it’s a
trillion or a trillion and a half or 600 billion in 15, 20 years?

What will the space economy look
like in 25 years?

Boling: I think there’s going to be people certainly in low Earth orbit and I think a really healthy number of people on the Moon as well. And, you know, just like in 1969, who would have imagined a world with smartphones and all the world and the ecosystem built around things like that? So, to a great extent, it’s hard for me to imagine what that world might be like. I’m optimistic. I think it’d be a good one. 

But
whatever it looks like, whatever the details are, I think Techshot will still
be there helping people live and work in space, making them happy, healthy, and
productive in space, whether that’s things to work on, ways to entertain them,
ways to keep them healthy. We’re going to be there, and we’re going to be a
part of that.

Matt, what’s in store for the next 25 years of space commerce?

Weinzierl:
So two things that haven’t been said as much. One, from an economic standpoint,
there’s some big problems or challenges facing the space sector, both in terms
of capturing positive things that we call externalities or spillovers across
companies and preventing the negative ones (like debris) from causing too much
trouble.

I’m
pretty optimistic, though, that those will get solved, or at least managed over
the next 25 years in the sense that there’s huge piles of money at stake in
solving these. There are a lot of actors, but it’s still a relatively small
industry that I think everybody wants to keep these things in check. 

And then I’ll just throw in the last part, which I guess is an economist’s favorite thing to say, which is I would not be surprised if, in 25 years, the biggest story is something none of us have even mentioned today. I think we just got to keep that in mind.

James Pethokoukis is the Dewitt Wallace Fellow at the American Enterprise Institute, where he writes and edits the AEIdeas blog and hosts a weekly podcast, “Political Economy with James Pethokoukis.”  John Roth serves as vice president of business development for Sierra Space, a subsidiary of the Sierra Nevada Corporation. Richard Boling is vice president of corporate advancement at Techshot. Mike Gold is executive vice president of civil space business development and external affairs at Redwire Space. Matthew Weinzierl is the Joseph and Jacqueline Elbling Professor of Business Administration at Harvard Business School.

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