We now live in an era where conversations about space are no longer just about discovering new planets, or a government endeavor. Nowadays, business enterprises are accelerating the space economy growth - raising capital and creating space innovations. In this article, explore the growing space industry and how your business can also pave an effective space economy strategy.
In 2022, the space economy was always on top of the headlines. There were lots of reports about countries launching their rocket ships to the moon, and billionaires like Elon Musk investing in space technologies.
It’s no wonder that there is growing interest in space: since Neil Armstrong and his team first moon landing in 1969, new and affordable innovations had been made to access and interpret data from celestial objects. And because of that, more and more countries and companies are turning to space investments.
An Overview of the Emerging Space Economy
Based on statistics, there are 90 nations currently operating in space. And now, there is an estimate of more than 10,000 firms and 5,000 investors in the space economy. These numbers are expected to grow more in the years to come as both government and commercial enterprises pursue emerging use cases in space.
In fact, analysts deem that the space sector could be the next trillion-dollar economy. The space economy growth is projected to be at a 6.84% compound annual growth rate (CAGR) between 2022 and 2026. According to experts, the industry is anticipated to reach $1 trillion in annual revenue by 2040. This trillion-dollar possibility can be attributed to the plummeting launch costs - which, by the same year, is predicted to be lower by 95%.
Now the important question: what is exactly in space that benefits mankind?
The answer is data. Lots of big data.
Because of satellite data, we empower a new data revolution for our society. Modern technologies are also the keys to driving new possibilities from these space data. For one, advanced artificial intelligence systems enable rapid and efficient data extraction gathered from space.
Here are some of the key sectors that are being transformed by the vast amounts of data that we are acquiring from the space industry:
Agriculture. Data from imaging satellites and geospatial technologies are used to monitor crop development and risk mitigations for common agricultural issues like storms, drought, and insect invasions. Governments are also using these data to help secure food supply in their local communities.
Security. Predictions for natural disasters and national emergencies are being more accurate, thus improving disaster preparedness and response. Government sectors can also use data for valuable security intelligence in intercepting dangerous threats.
Environment. Greenhouse gas emissions and rising ocean levels can be measured and tracked through satellite data, which can then be used to create action plans to combat climate change.
But these are not the only sectors that are greatly benefitting from the space economy. Industries in energy, transport, healthcare, telecommunications, aviation, and many more are also achieving sustainable digital transformation through space research. As investments grow and more space technologies are produced, we see more significant improvements in our fast-paced and digital society.
From an enterprise perspective, how do I go forward from here?
Like other emerging industries, venturing into the space economy can either produce gains or losses for any organization. Decision makers must proceed with caution in developing an efficient space strategy. Whether your enterprise is planning to invest or to create space technologies, take into account these four vital points when you draft your space economy endeavors.
1. Demonstrate near-term revenue potential and unique innovations. According to McKinsey, leading organizations that successfully received funding and saw exponential growth in their space ventures undertook some of the following activities:
- Target the biggest current and future segments for a solid revenue potential
- Create proprietary or unique space technologies with clear market differentiation
- Launch flexible and affordable business models for government and commercial applications
Ultimately, the standards for space economy funding will rise as the industry continues to flourish. However, ventures that have clear revenue paths and have flexible, affordable, and innovative strategies in place will have less reliance on capital - therefore gaining more investments in the market.
2. Assess space economy plans based on local and international regulations. With a crowded and competitive market, the space industry is rampant with regulatory risks. For one, there is a huge need to address gaps in international frameworks on ownership rights, collision liabilities, and security laws.
Space policy experts are currently working on addressing these gaps, and it is recommended to have a team dedicated to addressing changing policies and frameworks. Apply existing regulations in all processes for space economy ventures.
3. Prepare a space junk or debris mitigation plan in place. Space sustainability is an essential facet of both business and national interest. Geo Spatial World outlined some action plans to address the growing problem of space debris and threats to space safety:
- Evaluate collision avoidance processes using the Space Sustainability Rating (SSR) tool
- Invest in partnerships and set funding for active debris removal missions
- Establish space traffic coordination and management guidelines, based on international policies and laws.
As more and more private and public entities launch space missions, there will be more space debris and concerns about space traffic collisions. It should be every organization’s priority when considering their space endeavors.
4. Adopt a fail-fast mindset. The space industry is a whole-new industry for mostly private organizations. With industries that are just gaining traction, decision makers must expect a different timeline for business return. In this regard, approaching the new Space Age with a fail-fast mindset is a necessity to build your company’s space strategy.
The experiment-as-you-go philosophy is the new edge when engaging in new projects, no matter what the industry. Space corporations must embrace the risks that come with the industry to drive new learnings and better enable corporate resiliency.
Conclusion
In the digital age, the space industry will continue to make massive developments. Now is the time for organizations to maximize the opportunity to be a part of this transformation. But as industry experts asserted, leaders and their teams must proceed with a flexible strategy in mind to succeed.
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Reference Links
https://www.weforum.org/agenda/2022/05/how-the-space-renaissance-could-save-our-planet
https://hbr.org/2021/02/the-commercial-space-age-is-here
Image Sources
Astronaut. Photo by Pixabay. https://www.pexels.com/photo/sky-earth-space-working-2156/
Spaceship. Photo by Pixabay: https://www.pexels.com/photo/flight-sky-earth-space-2166/
Night sky. Photo by Yuting Gao: https://www.pexels.com/photo/silhouette-of-two-persons-stargazing-1567069/