Space Economy

What products and services can be generated and potentially consumed off Earth?

Science-fiction likes to depict a future where roaming through deep space is as mundane as driving down to the local store. Unfortunately, very little is explained of what is required to bridge the huge gap between the baby steps we have achieved so far and the vast interplanetary empires of our dreams, say nothing of any expansion beyond our Solar System.

Generally speaking, space is incredibly hostile to humans. Expanding beyond Earth is both technically very challenging and highly capital intensive. As a result, contrary to popular beliefs, there is nothing obvious in our space future.

 

To really become a space faring civilization at scale, we need to find some very compelling reasons. Even more important, to be sustainable, those reasons need to be supported by solid economics and true utility.

There are two ways the space economy can produce added value:

  • Humans located on Earth get services generated in space (Type 1)

  • Humans located off Earth get services generated in space (Type 2)

Type 1 space economy: serving Earth’s needs

 

Today, space related industries represent 0.4% of world’s GDP. This includes mostly telecommunication services (TV, data, voice) and to a much smaller extend, services related to Earth’s observation (weather, surveillance…).

As Type 1 space economy is by definition serving humans located on Earth, it’s in constant competition with Earth-based substitution alternatives. To remain competitive, it has to justify its added value by optimizing costs and efficiency.

By its very definition, the size of this Type 1 space industry can only be a fraction of Earth’s economy, and mostly likely a small fraction. The reason is that, given the enormous constraints of space, there will always be only a relatively narrow set of products and services that can be produced more cheaply and effectively in space than on Earth.

Here are some examples of Type 1 applications:

  1. Earth Telecommunication

  2. Earth Observation and geo-localization  

  3. Space Tourism  

  4. Space Mining for Earth market  

  5. Power Satellites

  6. Ballistic suborbital Earth transportation

  7. Preventing asteroid impacts

  8. Off Earth manufacturing

  9. Climate Geo-engineering

It’s interesting to note that, except for the two first ones that already generate a sizable industry, all the others are still quite speculative. Some of them face such constraints that they might never be economically viable, even in a distant future.

Due to its competitive nature, Type 1 space industry is already today 100% robotic and for the same reasons will remain purely robotic in the future. This means that the development of this Type 1 industry cannot be used to kick-start a Type 2 economy and that the presence of permanent human colonies off Earth faces its own cold-start issues.

Type 2 space economy: serving off Earth's needs

Today, the investment dedicated to sending humans in space represents approximately 0.005% of world’s GDP. The reason why it’s so small, is that it’s a purely “inspiring activity” with no business model. Without a way to pay for itself, it’s hard to see how it could grow in the future beyond a very small fraction of the world’s GDP.

For this to change, human settlements would need to provide sufficient economic inventive to make the move desirable for would-be colonists.

Off Earth, there are basically two possible options for settlements: on another planet or in space.

Here are some examples of Type 2 projects:

    1. Terraforming Mars or other bodies

   2. Creating settlements directly in space 

   3. Interstellar colonization

   4. Connecting with ETI

All Type 2 projects are very speculative at this stage. Their feasibility is highly dependent on the overall size of Earth's economy in the long term.

 

Zenon is looking into hard constraints and upper limits for Type 1 and Type 2 projects, with a special focus on economics and financial constraints.

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If you are conducting innovative academic research in one of those topics, please contact us.
You are also invited to submit proposals on other related topics.