An Inflection Point for the Space Economy

Private-sector innovation and investment will help determine the shape and success of the new space age.

The business of space is booming, evident in a wave of commercial spaceflights and remote-sensing satellites, as well as a White House budget request that would commit about $88 million to the National Oceanic and Atmospheric Administration’s (NOAA) Office of Space Commerce in 2023—up from just $10 million in 2022.

For longtime members of the space community, the sense of momentum is palpable.

“The space economy is accelerating and diversifying,” said Kevin O’Connell, founder and CEO of Space Economy Rising and former director of the U.S. Office of Space Commerce, during a panel discussion about the business of space at the GEOINT2022 symposium. “We used to talk about remote sensing, we used to talk about communications, navigation, and those are all changing in and of their own right. But now we’re talking about things like food in space, space medicine, the application of quantum computing, and other other technologies as well. It’s a very, very exciting time.”

For all the excitement, there remain plenty of challenges that emerging space-focused companies must address. For example, U.S.-based space startups face higher regulatory and security standards than some peer companies elsewhere, which can make it challenging to compete for investment capital.

“International companies that have satellite services are at an advantage right now, because U.S. companies have more of a labyrinth to fulfill regulatory requirements,” said Lisa Rich, co-founder of investment firm Hemisphere Ventures, as well as of Redmond, Washington-based satellite operator Xplore. She spoke as part of the same panel discussion as O’Connell. “It should be easy for us to be flying. It should be easy for us to go through that process. And what we’re finding is that it’s time-consuming. It is better than it used to be, but it’s onerous.”

O’Connell agreed, challenging the American government to adopt a regulatory approach that incorporates greater recognition of market forces.

“Regulation is a competitive business these days,” said O’Connell. “[Business] seeks the most permissive environment…There are areas where we still do need controls, but we need to harmonize them with our allies. We have to realize that there are other places on earth that will quickly take on new and exciting businesses without the kind of regulatory controls we would like to keep behind.”

Space commerce remains tightly intertwined with government interests. Rich and O’Connell each spoke of an investment climate where funders often look to government contracts to validate technology developed by space startups, even if the contracts are small. And the revenue models of many among the emerging cadre of space companies involve selling to a mix of government and private customers.

Those public-private collaborations, as well as cross-border collaborations, are key to the industry’s future. Government security interests, for example, depend on a high volume of commercial satellites that can provide persistent insight. Robust partnerships will provide greater resilience, both in terms of persistence and also tasking flexibility, said Geoffroy Beaudot, head of Space and Cyber for the Luxembourg Ministry of Foreign and European Affairs and Defense Department.

Beaudot pointed to a NATO initiative aimed at creating a virtual constellation of public and private space-based assets as an example of such collaboration.

“They will be able to aggregate all this information in order to provide the right information to the decision-maker at the right time,“ Beaudot said, calling the partnership “a key development in order to bring all this commercial technology together with governmental assets and military systems.”

The story of the new space age is being written by private-sector entrepreneurs, engineers, and investors, as well as their counterparts within government. How that ecosystem matures will play a defining role in the success of the space economy.

Posted in: Panel Discussions   Tagged in: Wednesday – April 27

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