Space Economy and Astrophysics

Introduction

The space economy encompasses a wide range of activities and resources aimed at exploring and utilising space for human benefit (OECD, 2024). Space exploration refers to deploying spacecraft to investigate beyond Earth's atmosphere, gathering information to expand our understanding of the cosmos (Britannica, Logsdon, 2024). Satellite technology plays a crucial role, providing services like global communication and weather monitoring, as well as enabling astronomical observation of distant planets and galaxies. Meanwhile, space tourism opens new avenues for private individuals to experience space firsthand. Looking further, asteroid mining - though still hypothetical - presents a potential solution to environmental degradation and natural resource scarcity on Earth. Together, these components shape a burgeoning space economy with far-reaching implications for humanity.

Historical Context

Space exploration took a historic turn in October 1957 when the USSR launched Sputnik, the first artificial satellite, fueling a space race between the U.S. and the Soviet Union. This rivalry led to historic achievements, such as Yuri Gagarin's first human spaceflight and the U.S. lunar landing by Neil Armstrong and Edwin Aldrin. The European Space Agency joined in 1975, strengthening international efforts and advancing space technology. For much of the 20th century, however, space remained out of reach for private ventures. Today, multiple private companies interested in space exploration have taken the pedestal.

In May 2020, SpaceX became the first private company to send humans into space, demonstrating that private companies now have the desire and capability to investigate space independently. Launching a satellite, probe, or human into space is a costly endeavour. Due to these high costs, private businesses and the public may struggle to see the immediate benefits of investing heavily in space initiatives. In 2002, SpaceX introduced reusable rockets, a breakthrough that lowered costs and spurred technological advancements in satellite design.

Commercial Satellite Market

Today, a significant portion of SpaceX's rocket launches are dedicated to deploying satellites, supporting a rapidly expanding commercial satellite market. Satellites serve as machines transmitting a huge amount of data, enabling services like GPS and telecommunications. SpaceX's Starlink utilises commercial satellites to provide internet globally, generating revenue. In addition, Maxar and Planet sell overhead images, signals, and geospatial services commercially to governments and commercial customers. Such private investments in space exploration yields significant economic benefits.

Job Creation and Economic Impact

Government and private investments in space exploration are creating jobs across various fields, generating billions in economic output. NASA's Space Launch System (SLS), the only rocket that can send Orion, astronauts, and cargo to the moon, serves the purpose of providing jobs. While other commercial alternatives are technically better, the SLS creates jobs for the old Shuttle contractors, keeping funds flowing to these workers. Historically, space jobs were largely government roles, primarily for astronauts and rocket scientists. However, this landscape has shifted, allowing private companies like SpaceX to become major employers.

For instance, NASA's $2.9 billion contract with SpaceX to send astronauts to the Moon has created numerous engineering and manufacturing jobs (Schindelheim, 2021). SpaceX's reusable rocket technology also fuels job growth, with roles in chemistry, electronics, and manufacturing. SpaceX's expansion in Starbase, Texas, highlights the broader employment within the space industry.

Economic Challenges

Government spending and private investment in space exploration come with economic challenges. Political factors, for instance, can undermine a project's economic benefits. The ExoMars mission, a collaboration between the European Space Agency (ESA) and Roscosmos, was halted in 2022 due to the Ukraine invasion and the subsequent end of cooperation with Russia. This disruption caused costly delays and required ESA to retrieve and refurbish equipment, develop new technologies to replace Russian components, and postpone the mission until 2028. Although the mission's scientific goals remain intact, political issues have led to significant additional expenses and extended timelines, impacting the overall economic efficiency of the project.

For the private sector, competition and market saturation challenge private companies to further develop their technologies. The private space sector has become increasingly competitive, with companies like Blue Origin, Rocket Lab, and emerging ventures challenging SpaceX. While competition drives innovation, it also puts pressure on profit margins and increases the risk of failed investments. For instance, SpaceX faces competition in the small satellite launch market from companies like Rocket Lab, which provides cost-effective launches for smaller payloads, potentially affecting SpaceX's market share.

Asteroid Mining

One of the economic potentials of space exploration lies in asteroid mining, which is still an evolving field. In 2021, experts from the Planetary Science Institute studied two newly discovered asteroids estimated to contain 85% metal, with one containing enough iron, nickel, and cobalt to exceed Earth's supply. According to Asterank, a database that evaluates the expected value of thousands of asteroids, mining the ten most cost-effective asteroids would result in a profit of approximately $1.5 trillion, which instantly implies the enormous economic potential of this industry (Keeble, 2023).

However, the costs are too high. NASA's OSIRIS-Rex mission, for example, lasted 7 years and cost $1 billion to retrieve just 1 kg of material to study (Yarlagadda, 2022). Due to high R&D costs, firms such as Planetary Resources and Deep Space Industry were acquired by other businesses in 2018 and 2019. Although initial costs are high, scientists anticipate an enormous profit from the metals obtained from further space.

Asteroid mining could reshape global commodity markets, with threats of certain companies acquiring monopolies over others. Today, many developing states' economies depend on selling metals, relying heavily on mineral exports. The lack of sufficient resources to develop satellite mining technologies will result in the suffering of the economic performance of these developing countries. For example, around 8% of South Africa's GDP and nearly half a million jobs stem from mineral exports, including platinum. A shift to space-sourced minerals could disrupt South Africa's economic stability, negatively affecting its citizens.

Asteroid mining also poses an environmental dilemma. While it aims to reduce the harm Earth experiences due to mineral harvesting, the massive environmental damage that bringing resources back to Earth is likely to offset economic gains. Indeed, this aspect shows that the environmental costs of large scale mining may surpass any potential economic benefits.

Satellite Technology Applications

Satellite technology has become essential in many industries. Telecom satellites provide connectivity to rural areas, which cannot be reached by fiber-optic cables, due to geographical and economic challenges. For instance, SES initiated O3b mPOWER, a next-generation satellite constellation, to provide high-speed internet for the Pacific Islands, enabling business development (Australian Financial Review, 2024). Moreover, the United States utilises GPS satellite constellations to support navigation and secure military communications globally.

In agriculture, companies like Planet Labs employ small-size satellites to monitor crops, soil moisture, and weather conditions. This allows farmers to optimise their yield, further contributing to improving economic performance.

As satellite constellations, like Starlink by SpaceX, promise to establish worldwide internet access, their economic impact is enhanced. For example, Starlink has provided high-speed internet to remote villages in Chile, strengthening economic prospects for these communities. These satellite constellations support local business, remote work, and e-commerce by bridging the digital divide, allowing for greater involvement in the global economy.

Space Tourism

As space technology improves, the cost of launching loads into space decreases, making space tourism more feasible.

Since the emergence of private spaceflight companies, space tourism has become more realistic. Currently, several private firms are working to make space travel accessible for a wider audience. Blue Origin, founded by Jeff Bezos, focuses on suborbital flights lasting 10 to 12 minutes.

The main attraction for the passengers is the feeling of weightlessness as the New Shepard, the spacecraft, reaches the boundary of outer space. In addition, they are exposed to the view of the curvature of the Earth, which is another appealing part of this trip.

On the other hand, SpaceX, founded by Elon Musk, has conducted crewed missions to the International Space Station (ISS). Moreover, SpaceX has completed a successful space tourism flight, Polaris Dawn, bringing four non-NASA astronauts to an orbit who performed the first space tourism spacewalk. As of this moment, SpaceX takes the lead in the space tourism market; however, this field may not be its most important goal in space exploration. As the interest in adventure travel increases, the space tourism market experiences significant growth.

More companies invest money in developing infrastructure and technology suitable to transport travellers from the Earth to space. Currently, wealthy individuals are willing to pay $250,000 to $500,000 for seats on Virgin Galactic's SpaceShipTwo and Blue Origin's New Shepard (Kiger and Spoon, 2021). Orbital flights are far more expensive, costing more than $50 million per seat. Even though these companies have targeted a very niche audience, they are investing in infrastructure to commercialise this industry. High pre-booking rates for Virgin Galactic and Blue Origin suggest strong initial demand, and many consumers express interest if prices decrease significantly.

Financial Risks

Investments in space exploration are associated with financial risks due to high costs and technological barriers. Space missions and infrastructure require large funding, with projects costing billions. Even though technological innovation is crucial, it is costly and time-consuming, with research and development taking decades to complete. The high probability of these projects failing are additional cause for concern, as even slight technological faults in space might result in catastrophic results.

Overall, without substantial financial backing and constant technological progress, investors face significant risks in the space economy.

Global Economic Trends

Breakthroughs in space technology are reshaping global economic trends, influencing globalisation, international cooperation, and geopolitical competition. Space infrastructure, such as satellites, facilitates global communication networks, which drive globalisation by better-connecting countries and markets. Cooperation on initiatives such as the International Space Station has encouraged international collaboration, with countries sharing resources and expertise. However, space is also becoming a reason for geopolitical conflict, particularly between established states such as the U.S., and new ones such as China and India, as they compete for space dominance. By building their own satellites and launching space missions, these states contribute to the diversification and growth of the space industry on a global scale. The future of the space economy offers vast potential, with long-term benefits as technologies evolve and more players enter. Satellite services, space tourism, and asteroid mining are all potential prospects for new markets and industry growth. Continued investment promises global connection, resource solutions, and sustainable practices, which will reduce environmental hazards and advance resource management. With increased investment opportunities, public and private stakeholders may create a resilient space economy that drives economic, technological, and societal advancement.

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