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The space industry, broadly defined, is poised to become an engine of economic growth and innovation in the near future. In recognition of this, the U.S. Chamber of Commerce recently expanded the scope of its acquisition policy committee to reflect the growing importance of commercial space, rebranding it the “Procurement and Space Policy Council.” Near-term future space industry growth will be driven largely by the massive demand for bandwidth that our increasingly connected world requires and rapidly decreasing costs.
Demand for bandwidth is annually growing exponentially, driven by an increasing number of global internet users and skyrocketing usage rates per individual. In addition to continuously growing demand for current internet use, future demand will also be driven by emerging technologies, including autonomous vehicles, the internet of things, and high bandwidth enhanced video and virtual reality technologies. While satellite-based internet is currently only a tiny percent of the satellite industry, satellite internet will surely be necessary to meet growing demand.
The satellite industry is the biggest component of the space industry. Bryce Space and Technology estimates that satellites and satellite services comprise 77% of total space industry revenues. Satellite sector revenues have increased by $38 billion over the last five years, a growth rate of almost 4% per year. Over the next thirty years, provision of internet access via satellite is predicted to account for 50% to 70% of the estimated $1.1 to $2.7 trillion space market and continue to be the primary driver of industry growth.
On the supply side, launch costs have fallen substantially as highly innovative, private launch companies have entered the market. Emerging technologies like reusable rockets have decreased costs from hundreds of millions of dollars per launch to tens of millions, and the declining cost trend is predicted to continue. New technologies are also pushing down the cost of satellites. Smaller satellites are less expensive to produce and to launch, and as demand grows for ever-greater numbers to be deployed, costs will decrease even further with the realization of economies of scale in mass production manufacturing.
The space industry will be a major contributor to future economic growth, and over time a significant portion of the global economy will depend in some way upon space assets. While the potential for expansion of numerous industries into space is a distinct long-run possibility, in the near term the space economy will center on satellite provision of bandwidth for earthbound technologies. The challenge for advancing the future space economy is to create a robust policy framework domestically and globally that accommodates the reality of the private sector leading the way.