Last week the international space sector gathered at the 69th International Astronautical Congress (IAC) in Bremen. For perspective, IAC is the world’s premier space event. And this year’s theme ‘Involving Everyone’ was spot on. Why? Because in practice the opposite is true: despite all the attention for New “Astropreneurial” Space it is still Old “Governmental” Space calling the shots over the next decade.
To my surprise I found little press coverage of the IAC’s highlights. Key information came from social media. There, Airbus CEO Tom Enders caught my attention with his speech and this statement: “The Space Sector is foreseen to be a $3 trillion machine in 25 years – that in space years is like tomorrow. Today Space is not anymore, an area reserved to states and their institutions. We see an increasing amount of private ventures investing massively into new space capabilities, setting new records in the coming years in terms of investments, product/services development and launches.”
I find this statement fascinating. It confirms that Space is and will be big business. But the main question here is: for who?
From pale, male and stale to diversified, young and dynamic?
In his quote Enders is referring to the arrival of new private players that are challenging the market to innovate. Where over 40 years ago Russia and USA went toe to toe in a race to reach the moon, today SpaceX (Elon Musk), Virgin (Richard Branson), and Blue Origin (Jeff Bezos) battle to fill the sky with satellites and astronauts. What was once a space race between countries now is a rivalry amongst companies backed by wealthy individuals.
But when zooming in closer on estimated future revenues, these new kids on the block won’t be cashing in over the next ten years. The below graphic (1) from Euroconsult shows the number of satellites to be launched (TBL) by 2026. We see that in the next decade there will be 3 times more satellites.
But the next graphic (2) shows that while NewSpace satellites grow in number, their total value is not in sync with their volume. One of the reasons is that future satellites will be (on average) less costly to build and launch.
So, when looking at the estimated revenues in graph 3, it reveals that despite ‘only’ launching 23% of the commercial constellations over the next decade, governments will remain to be the largest client of the space industry with ca. 80% in future revenues.
Bottom-line: NewSpace gets all the attention, but Old Space is where the business is. And that’s good news for the current space suppliers, but bad news for the innovation climate if Old Space is not embracing NewSpace innovation. Unless… we throw some more jet fuel on the NewSpace fire!
Let’s fuel up the NewSpace innovation race
To summarize, new players are only getting ca. 20% of total revenues in the next 10 years. The heavy lifting is currently done by a small coalition of billionaires. But to really shake up the old world, the whole sector should jump in on the NewSpace race. By using the ’astropreneurial billionaires’ as a spark we can together ignite the space sector to become a “hip”, diversified and vibrant wealth creator. This will challenge the status quo of the conservative aerospace sector and encourage governmental agencies to embrace change. Now THAT would be a great step for mankind, wouldn’t it?!
This blog was also posted on LinkedIN.
