The Space Economy: A Sector Overview

Authored by: Filip Drucker and Quentin Saysana Geoffroy

“We will pursue our manifest destiny into the stars, launching American astronauts to plant the stars and stripes on the planet Mars,” declared President Donald Trump during his inauguration, outlining a bold vision for America’s continued leadership in space exploration. These remarks were welcomed by the private sector, which is rapidly scaling its investments in space infrastructure, exploration, and commercialisation. McKinsey projects that the global space economy will grow from $630 billion in 2023 to $1.8 trillion by 2035.

Launch Providers

SpaceX, founded by Elon Musk, has emerged as a pivotal player in the burgeoning space economy, with significant implications for macroeconomic growth and global innovation. Valued at $350 billion, it stands as the most valuable private company in the world, driving advancements in critical sectors such as telecommunications, infrastructure, and aerospace manufacturing. Its Starlink satellite constellation is not only addressing the digital divide by providing high-speed internet to remote regions but also expanding the economic potential of underserved markets.

The cost efficiency of SpaceX’s Falcon 9 rocket, which led the industry in launches in 2024, has revolutionized the economics of space access, lowering barriers for governments and private entities seeking to operate in orbit. Figure 2 shows the number of SpaceX per year, showing a high success rate, which can be the direct consequence of economies of scale. SpaceX is also developing Starship, a fully reusable rocket which promises to further reduce costs and enable large ambitious projects, from lunar payload delivery to interplanetary exploration. While government agencies are increasing their bid to remain competitive, there remains a persistent exponential increase in the market share of global launch attributed to the private sector.

Blue Origin, founded and owned by Jeff Bezos, is another major player driving the growth of the global space economy. On January 16, the company successfully launched the New Glenn rocket on its inaugural flight, a partially reusable heavy-lift launch vehicle capable of delivering up to 45 metric tons to low Earth orbit. Despite its failed landing attempt, this placed New Glenn as a competitor in the high-demand orbital launch market, valued at $8 billion annually. In the suborbital tourism market, valued at an estimated $3 billion by 2030, Blue Origin’s smaller fully reusable New Shepard rocket has conducted eight successful crewed flights, offering short-duration space flights to paying passengers. Tickets for these flights reportedly range from $200,000 to $300,000.

Private companies are stepping up to meet the growing demand for space infrastructure and services. RocketLab (NASDAQ:RKLB), currently a small payload launch provider with its partially reusable Electron rocket, is expanding its capabilities with its heavy-lift Neutron rocket set to inaugural launch no earlier than mid-2025, to compete with SpaceX's Falcon 9. Even launch providers such as United Launch Alliance (ULA), whose CEO Tory Bruno once dismissed reusable rockets, are now pivoting toward investing in the technology. This shift reflects the growing recognition of reusability across the aerospace industry.?

Lunar Economy

The space economy is fueled by government initiatives like NASA’s Artemis program and an expanding presence of private companies. The Artemis program aims not only to land American astronauts back on the moon but also to establish a thriving "lunar economy," creating opportunities for companies of all sizes to participate. These private enterprises already compete to deliver services ranging from payload integration and operations to launching payloads from Earth and landing them on the Moon’s surface.

Through initiatives like the Commercial Lunar Payload Services (CLPS) program, NASA collaborates with several American companies to deliver science and technology to the Moon. These companies handle everything from payload integration to launch and landing. The indefinite delivery contracts have a combined value of up to $2.6 billion through 2028.?

For instance, as part of CLPS, Firefly Aerospace is currently en route with its lunar lander, the Blue Ghost mission, launching on January 15, 2025. Similarly, Intuitive Machines (NASDAQ:LUNR), headlines in February 2024 by achieving the first successful American lunar landing since Apollo. The milestone resulted in the company’s stock to rally more than 300%. And preparing for its second lunar landing, scheduled for March of this year. The company has also been awarded a 10-year contract, part of the Near Space Network services worth up to $4.82 billion to provide critical communication and navigation services for missions extending from Earth to the Moon.

As the recipients of NASA's Human Landing System (HLS) contract, private sector giants are key players in NASA’s objective of the commercialisation of the moon. SpaceX and Blue Origin received $2.89 billion and $3.4 billion respectively, in the quest of landing astronauts back on the Moon no earlier than mid-2027. Blue Origin is also advancing its Blue Moon lunar lander, designed to support NASA’s Artemis program and deliver up to 10 metric tons of cargo to the Moon’s surface, enabling logistics for future lunar exploration.?

Space Stations

NASA wants to ensure a continuous human presence in space, investing $4.4 billion to sustain operations in low earth orbit, including the International Space Station (ISS) until 2030 and awarding SpaceX $832 million to safely deorbit the ISS, before transitioning to commercial space stations like those being developed by Axiom Space.?

Axiom Space, a growing player in the industry, secured a contract valued at $140 million to develop and attach at least one habitable commercial module to the ISS. Additionally the company has been awarded the first task order under its NASA Extravehicular Activity Services (xEVAS) $1.26 billion Contract to develop spacesuits for lunar surface missions.

Blue Origin is also leading the development of Orbital Reef, a $3 billion commercial space station, in collaboration with Sierra Space, Boeing (NYSE:BA) and Redwire Space (NYSE:RDW) a critical infrastructure and space operations company. Designed to accommodate research, manufacturing, and tourism, Orbital Reef is projected to serve as a hub for commercial activities in orbit, tapping into a growing market for microgravity applications. By focusing on scalable infrastructure, Blue Origin is playing a crucial role in diversifying and expanding the space economy.

Microgravity Manufacturing

Space manufacturing is an emerging frontier, with companies like Varda Space Industries and Space Forge leading the charge. Varda is focused on leveraging microgravity to produce pharmaceuticals through crystallization processes that are difficult to achieve under Earth’s gravity. Meanwhile, Space Forge is developing reusable, on-orbit fabrication technologies to manufacture semiconductors and alloys. Such companies are working on unproven technologies and are mostly funded by Venture Capital firms.

Investment Outlook

Furthermore, President Donald Trump's nominee for next NASA administrator—Jared Isaacman, the CEO of Shift4 and a known ally of SpaceX, has the potential to significantly shape the trajectory of NASA’s partnerships with private space companies. Isaacman’s experience and alignment with private-sector innovation make him an ideal candidate to further integrate commercial partnerships into NASA’s roadmap. His leadership is likely to strengthen NASA’s collaboration with commercial partners. The sector can expect continued growth as increased competition amoung companies is driving launch costs down and making space more accessible. Encouraging a wide range of entities from telecommunication companies and government agencies to university researchers, to expand their presence in orbit. Investors looking to gain exposure in the broader sector, indices such as the ARK Space Exploration & Innovation ETF (ARKX) offer a compelling starting point for further research.

Disclaimer!

Please be advised that EUTIC does not provide formal investment advice and is not a licensed financial adviser. The content we produce is intended solely for educational purposes, aimed at individuals interested in markets and economic trends. Any information provided should not be construed as financial advice or a recommendation for any particular investment strategy.

Sources

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“Human Landing Systems - NASA.” NASA.gov, www.nasa.gov/reference/human-landing-systems/.

NASA Office of Inspector General. 2024. https://oig.nasa.gov/wp-content/uploads/2024/06/final-report-ig-24-013-nasas-commercial-lunar-payload-services-initiative.pdf

O’shea, Claire. “NASA Selects Blue Origin as Second Artemis Lunar Lander Provider - NASA.” NASA, 19 May 2023, www.nasa.gov/news-release/nasa-selects-blue-origin-as-second-artemis-lunar-lander-provider/.

Sheetz, Michael. “Intuitive Machines Stock Has More than Tripled. How Wall Street Reads the Moon-Fueled Rally.” CNBC, 22 Feb. 2024, www.cnbc.com/2024/02/22/intuitive-machines-stock-surge.html. Accessed 28 Jan. 2025.