THE BATTLE FOR THE NEW SPACE ECONOMY: SECOND SPACE RACE

Already the space industry worth is more than $400 billion dollars as per Space Foundation. By 2040, it expected to skyrocket to $1 trillion as per Morgan Stanley. From Constellations of satellites encircling the Earth to Space Station, where business can do research, or film movies, this is the new space economy with the endless possibilities, and everyone wants a piece. Currently, SpaceX, Blue Origin and Virgin Galactic founded by Elon Musk, Jeff Bezos & Richard Branson respectively. These private companies already lunch several programs to commercialize their space program. For example, Virgin Galactic reopened ticket sales for $450,000 each as of February 2022. However, space economy not only limited to all these space billionaires, though they are laying the groundwork for an industry that will be more accessible someday. But space tourism sector is not the major sector for contributing the space economy, it’s just tip of an iceberg. We are talking about the $400 billions which is largely the communications sector and the new constellations of Satellites. Thousands of satellites orbiting the earth and transmitting the TV signals, phone calls, GPS locations, military information, and weather information. Most of the people on Earth don’t even realize that they depend on the space for so many of their platforms today such as E-Commerce, navigation, financial transaction for example ATM transaction also supported by satellite support system. This is where the space economy is becoming more and more prominent.

The second space race is a lot focused on which country can invest in the commercialization of space, the economic development of space and the return of profits from that space investment. Therefore, it’s a very different kind of space race that we are observing today in the post-cold world war. The goal is not to be in space rather own it. And the players have changed too. It’s not NASA versus the soviet space program. This time, its private industry, being helped on by government money. For example, NASA already invested hundreds million of dollars into companies like Nanoracks. Recently, Nanoracks won a lucrative contact to build a private space station calling StarLab.

Satellites are mostly placed on three orbits around the earth. LEO (Low Earth Orbit) 80-1,700 Km, MEO (Medium Earth Orbit) 1,700-35,700 Km and GEO (Geosynchronous) more than 35,700 Km from the earth surface. LEO is now the hotspot for the satellites because it is close to earth surface and faster to transfer data. The closer a satellite is to earth surface the faster it works but it also covers a smaller area and results in thousands of the satellites already placed in LEO for covering the large area. Elon Musk has launched around 2,000 satellites into LEO under the project called Starlink. Starlink target to increase this number to 42,000 in space to provide cheap internet facilities in remote areas. Research expects that by 2030, there will be at least 50,000 active satellites in space.

The second space race is a lot focused on which country can invest in the commercialization of space, the economic development of space and the return of profits from that space investment. Therefore, it’s a very different kind of space race that we are observing today in the post-cold world war. The goal is not to be in space rather own it. And the players have changed too. It’s not NASA versus the soviet space program. This time, its private industry, being helped on by government money. For example, NASA already invested hundreds million of dollars into companies like Nanoracks. Recently, Nanoracks won a lucrative contact to build a private space station calling StarLab.

While the US government remains by far the leader when it comes to space funding, China is also becoming a major player. For example, if a private company that is developing private rockets, they need a launch site. What China has done is that they offered the People’s Liberation Army launch sites for a very subsidized rate. So that helps in terms of private sector being able to meet some of the demand that come from their own government to launch.

According to Space Capital, equity investments in the space industry have totaled $177.7 billion over the past ten years. It was distributed across 1,343 distinct organizations, with 75% of that total coming from businesses in the United States and China combined. Singapore (6%), Britain (4%), Indonesia (3%) and India (3%), in that order, came next. In 2020, the entire amount invested in infrastructure (launch, satellites, logistics, etc.) will reach a record $8.9 billion. Of course, space economics encompasses more than space travel, rocketry, and spacecraft. In actuality, the majority of funding is provided annually by businesses engaged in applications such as positioning, navigation, and earth observation.

The most recent generation of space exploration technology has been primarily driven by private enterprises, but a few public corporations have lately surfaced, such as Virgin Galactic Holdings, Inc. (SPCE) and Aerojet Rocketdyne Holdings, Inc. (AJRD). Bank of America study indicates that the number of publicly traded stocks with space exposure is rather small—just 14. But according to analyst Ron Epstein of Bank of America, there's "more to come."

Meanwhile, investors who see growth in the cloud computing business and tech companies with expanding exposure to space exploration but are too nervous about pure-play space equities have more options as the tech space race heats up.

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