- In 2018, governments and companies around the world spent a record $415 billion on satellite-based entertainment, weather forecasting and other services.
- Wall Street analysts expect the "space economy" to top $1 trillion within the next 20 years.
- Driving the bulk of space investment today is rising demand for satellite-based entertainment and a range of apps that require rapid data transmission.
Half a century after, the final frontier is no longer the exclusive domain of governments, or even gazillionaire entrepreneurs. While the race for commercial space travel grabs headlines, a potentially lucrative industry is also starting to take off. Here's why some experts think space could soon become a $1 trillion business.
$400 billion -- and rocketing up
Governments and companies worldwide spent a record $415 billion last year on everything from satellite-based entertainment to real-time services such as mapping and weather forecasting -- notably, private businesses account for nearly 80% of that spending, according to the nonprofit Space Foundation. More than half of that money went into satellite services and products like entertainment, with about a quarter for infrastructure such as satellite launch vehicles.
Commercial space investment is up 79% since 2009, when Elon Musk's SpaceX launched its first commercial payload. The launch was an event that "changed everything," according to a report from private investment firm Space Angels produced for NASA's small business and technology program.
Morgan Stanley analyst Adam Jonas figures that by 2040, the market for space-related products and services will reach $1.1 trillion -- and estimate that jibes with forecasts from Goldman Sachs and Bank of America. The U.S. Chamber of Commerce is even more bullish, last fall projecting what it calls the "space economy" to reach $1.5 trillion within the next two decades.
Tourist trips to the International Space Station isn't what's driving growth at the moment, though the publicity stokes excitement. More important, providing entertainment services and apps that control everything from the temperature in your home to the best way to get around traffic increasingly depend on private industry's ability to zap information from outer space to earth.
"The business case closes in space for only a few applications right now, mostly for television and telecommunications," Matt Weinzierl, a professor at Harvard Business School who studies the economics of space, told CBS MoneyWatch. "But the harsh reality is that the costs of transportation to and from space -- much less operation in space -- make data a uniquely feasible space product."
Though U.S. government spending on the space trade is rising, it made up just 12% of the total last year, according to the Space Foundation.
Hitching a ride
Another factor driving the space investment boom is satellite "ridesharing," which lets companies put their satellite on a launch vehicle with others. That has lowered costs and invited more companies to enter the marketplace, putting more satellites into orbit.
"We're only now reframing our paradigm of space and considering the potential of space to make life better on Earth," said Becki Yukman, a senior data analyst for the Space Foundation.
"And like anything with a profitable bottom line, it's exploding and not liable to peter off soon," she added.
Commercial space flight is regulated by the Federal Aviation Administration, just like commercial flights closer to earth. But funding for commercial satellite launch areas is shifting from the federal government to private and state entities, according to a recent report from the U.S. Government Accountability Office.
So what about space travel?
The industry that really captures the imagination, of course, is commercial space travel. Just last week, Richard Branson's Virgin Galactic announced plans to become a publicly traded company by the end of the year. Blue Origin, run by Amazon founder Jeff Bezos, announced in May that it's building a moon lander that could put astronauts back on the surface by 2024, as well as hauling tons of cargo.
Certainly, space enthusiasts are queuing up. Virgin Galactic said it has reservations from more than 600 people for a ride into space and has already taken $80 million in deposits. That implies a per-flight price of $200,000, according to Morgan Stanley's Jonas.
Still, the power of ordinary people blasting off may be more valuable for trumpeting space as a home for business, the Wall Street analyst wrote in a recent note. "It is difficult for us to convey the potential marketing power of sending folks into space," he said.
More than billionaire thrill rides
The NASA plan urges work to "stimulate sustainable demand" in fields from in-space manufacturing to biomedicine. Indeed, private companies have been stoked by NASA investment, as well as investment by other countries around the globe. Space Angels notes there are now 375 private companies, with $19 billion invested so far.
Funding from wealthy space enthusiasts like Bezos, Musk and the late Microsoft co-founder Paul Allen has provided momentum, with such ventures likely to get over the "tipping point" of taking paying passengers into space soon, Weinzierl predicted.
"We hear so much about it in part because of the pure excitement it generates, but also because it really will mark an inflection point in the business," he said.
More than 179,000 people are employed in the U.S. space industry, according to the Space Foundation. Of those jobs, most work in the private sector and are focused on developing and manufacturing new launchers and spacecraft. Thousands also work in areas such as satellite telecommunications and remote-sensing applications.
Roughly 44,000 federal workers are in space-related fields, with about 17,000 working for NASA. But most of the growth from 2017 to 2018 was in the private sector, according to the report's compilation of figures. Europe has the next-biggest workforce, followed by India and Japan.