Space Commercialization (Part 3)
Explaining Space Infrastructure, Laws, Economics, and More
Hello!
Thank you for reading the Brainwaves newsletter. I’m Drew Jackson, your content curator, and today I’m writing about the emerging space economy. Let’s dive in.
Before we explore today's topic, a quick reminder: Brainwaves is published every Wednesday, covering a range of subjects including venture capital, economics, space, energy, intellectual property, philosophy, and more.
I'm not an expert, but rather an eager learner sharing thoughts along the way. I welcome feedback, differing viewpoints, and healthy discussions that expand our horizons. If I make mistakes, please feel free to politely clarify or correct me.
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Credit NOAA GOES East
Thesis: Space infrastructure continues to develop as private and public space entities race to commercialize low earth orbit and other space orbits, planets, and moons. Yet, space laws and regulations haven’t caught up with developments, the economics of space are difficult to understand and space commercialization efforts often feel outlandish to the normal person.
Space Infrastructure
Space infrastructure is a broad term encompassing a variety of components essential for space activities. It can be categorized into several key subsegments:
Ground Infrastructure: Launch Sites & Facilities, Ground Stations, Research & Development Centers
Space-Based Infrastructure: Satellites, Space Stations, Space Debris Mitigation Systems
Supporting Space Infrastructure: Space Transportation, Space Manufacturing, Space Exploration Infrastructure, Space Traffic Management
Emerging Space Subsegments: Space Tourism Infrastructure, In-Space Servicing and Assembly, Space-Based Solar Power
Ground Infrastructure
Ground infrastructure refers to the Earth-based infrastructure used to support and facilitate space commercialization, exploration, and development. This infrastructure includes launch pads, assembly buildings, control centers, ground stations, and other space research and development infrastructure. These facilities are equipped with antennas and communication equipment for tracking, controlling, and communicating with spacecraft and other in-space infrastructure.
Space-Based Infrastructure
Space-based infrastructure refers to infrastructure placed in space to support other space-based operations, exploration, and commercialization. This includes satellites–which support human services and space-based activities, space stations, and space debris mitigation systems. These are artificial objects around the Earth or other places in space for communication, navigation, remote sensing, scientific research, long-term occupation, and to limit the amount of space debris in orbit.
Credit LinkedIn
Supporting Space Infrastructure
Supporting space infrastructure refers to space-based logistics operations that facilitate space operations, exploration, and development outside the Earth’s orbit. For example, space transportation comprises launch vehicles, spacecraft, and related technologies for transporting payloads into and around space. This supporting space infrastructure is estimated to be at least 10-15+ years away before any significant amount is deployed.
Emerging Space Subsegments
Emerging space subsegments refer to newer, more exciting portions of space commercialization. Space tourism infrastructure includes facilities and services to support space tourism activities. In-space servicing and assembly are pieces of infrastructure to help repair, refuel, and assemble spacecraft in orbit. Space-based solar power is a novel idea to capture solar energy from space and transmit it back to Earth.
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All of these subsegments are interconnected and interdependent and form the larger web of space infrastructure. The rapid advancement of space technology is continually creating new subsegments and expanding the possibilities of space infrastructure.
In Deloitte’s 2023 report “The Commercialization of Low Earth Orbit”, Deloitte breaks down the low earth orbit infrastructure into the following segments: launch services, space traffic management, destinations (space stations), communications & computing, in-space servicing, in-space manufacturing & assembly, and astronaut services & health.
Each of the segments is broken down in the charge below which details maturity and dependence on infrastructure and services:
Credit Deloitte
These subsegments are interconnected and interdependent, forming a complex ecosystem. The rapid advancement of space technology is continually creating new subsegments and expanding the possibilities of space infrastructure.
There are many factors that positively and negatively affect space infrastructure development and deployment:
Positive Factors:
Technological advancements in many industries will have positive externalities, potentially transforming the manufacturing and maintenance of space infrastructure.
The growth of satellite constellations in the Low Earth Orbit will continue to drive down the costs of other space activities as space expertise grows and the amount of space data rapidly increases.
International space commercialization competition may encourage further government support for space activities.
Government space programs will continue collaborating with industry players to commercialize the Low Earth Orbit.
Negative Factors:
The growing density of spacecraft, debris, and other space objects/infrastructure significantly raises the risk of collisions with the potential to make much of space unusable.
Losing partners to the International Space Station may hinder future widespread space infrastructure growth.
Space activity and infrastructure historically have failed to properly meet timeline estimates.
Macroeconomic factors can directly affect space investment by venture capital, private equity, or private industry players.
In the United States, Apollo-era engineers have begun to retire, meaning there is a skill gap in key public and private positions.
Credit Science Friday
Space Law & Regulations
Space law dates back to 1919 when international law recognized each country’s sovereignty over the airspace directly above their territory. 6 international treaties have been negotiated regarding space laws and regulations:
Partial Nuclear Test Ban Treaty of 1963: “Treaty Banning Nuclear Weapon Tests in the Atmosphere, in Outer Space and Under Water” - Signed by 126 Nations
This treaty prohibited all test detonations of nuclear weapons except for those conducted underground.
The Outer Space Treaty of 1967: “Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies” - Signed by 111 Nations
This treaty was the foundation of international space law, presenting principles for space exploration and operation:
Space activities are for the benefit of all nations, and any country is free to explore orbit and beyond.
There is no claim for sovereignty in space; no nation can “own” space, the Moon, or any other celestial body.
Weapons of mass destruction are forbidden in orbit and beyond.
The Moon, planets, and any other celestial bodies can only be used for peaceful purposes.
Any astronaut from any nation is considered an “envoy of mankind” and all nations must provide all possible help to astronauts when needed.
Nations are responsible for damage caused by their space objections and must avoid contaminating space and celestial bodies.
Credit War on the Rocks
The Rescue Agreement of 1967: “The Agreement on the Rescue of Astronauts, the Return of Astronauts and the Return of Objects Launched into Outer Space” - Signed by 98 Nations
Nations agree to take all possible actions to help or rescue astronauts in need. Nations agree to help return to the proper nation any space objects that land on Earth outside of the country from which they were launched.
The Liability Convention of 1972: “The Convention on International Liability for Damage Cause by Space Objects” - Signed by 96 Nations
Nations take full liability for any damage caused by their space objects and agree to adjudication for damage claims.
The Registration Convention of 1974: “The Convention on Registration of Objects Launched into Outer Space” - Signed by 71 Nations
The United Nations Secretary-General can maintain a register of all space objects.
The Moon Agreement of 1979: “The Agreement Governing the Activities of States on the Moon and Other Celestial Bodies” - Signed by 18 Nations
Celestial bodies can only be used for peaceful purposes. These bodies should not be contaminated and the United Nations should always be made aware of any station on a non-Earth body. If resource mining on the Moon becomes feasible, an international regime will be established to govern those resources extracted.
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Wikipedia states:
These treaties and agreements cover "non-appropriation of outer space by any one country, arms control, the freedom of exploration, liability for damage caused by space objects, the safety and rescue of spacecraft and astronauts, the prevention of harmful interference with space activities and the environment, the notification and registration of space activities, scientific investigation and the exploitation of natural resources in outer space and the settlement of disputes".
Yet, there are still issues with the current laws and regulations. The rapid advancements in space technologies have outpaced the development of international laws and regulations.
Space debris, specifically, determining liability for damage caused by space debris is complex and not completely defined by law. The increase in space and satellite launches requires efficient management systems to avoid collisions and to have orbital harmony. Preventing the placement of weapons in space is a complex and politically charged issue as it’s difficult to determine what constitutes aggression in space.
Credit Yale University
Space Economics
Economics are critical to all aspects of space from the commercialization of space to the economic impact of space activities to investments in space activities.
The Business of Space
This whole article series is about how space becomes commercialized and the different economics involved. For instance, space startups and space tourism have large economic potential as there is a large demand for these services meaning large margin potential for companies and investors alike. To give another example, satellites have already had a huge economic impact as they provide differentiated, extremely necessary services to support life on Earth.
Economic Impact of Space Activities
Space activities and commercialization have had huge impacts on major economies already over the last 50 years. Many employment opportunities have been generated by the space industry, either in the private sector (SpaceX, Boeing, etc.) or the public sector (NASA). Advancement in space activities helps develop infrastructure and drive advancements in other sectors. In economics, we would call that “positive externalities”.
The United States Bureau of Economic Analysis reports that the Space Economy accounted for 0.5% of the GDP in 2022. Besides contributing directly to the US economy, space activities also contribute to global trade as countries try to buy and sell rare materials needed for spacecraft and other space vessels.
Credit Statista
Space Investment
Public and private entities continue to invest in space activities–many of these players think this sector is going to be critical to our future. International entities are beginning to cooperate on complex projects to explore more of space, remove space debris, place another space station into orbit, and much more.
Other Space Economics
There are so many different ways that economics plays into space activities, for instance, space data from satellites, ground stations, and other in-space vessels is extremely valuable for a variety of entities: insurance agencies, weather forecasters, air traffic controllers, and many more.
Another way space activities interact with economics is the idea some have that space infrastructure should be a public good. Some believe that there are economic arguments capable of being made for publicizing space infrastructure–making it available to private and public entities alike.
Credit 3Dponics
Other Space Commercialization Efforts
Besides what I’ve already written about, space continues to be commercialized in many other ways. Many are briefly explained below:
Space Medicine, Biotechnology, & Healthcare: A specialized field dedicated to manufacturing new medicines and completing other biotechnological experiments in space that would otherwise be incapable of being synthesized on the Earth’s surface.
Space-Based Energy Generation: Hypothetical devices capable of capturing the sun’s energy directly in space and transmitting it directly to Earth. This is beneficial because of constant sunlight, higher energy density, and the potential for global access to energy.
Small Satellites and CubeSats: Small satellites are those that are smaller than the size of a large kitchen refrigerator. These significantly reduce the large economic cost of launch vehicles as multiple satellites can be launched using the same space vehicle.
Credit Star Walk
Space-Based Internet: Providing internet connectivity using orbiting satellites. This can provide global high-speed internet coverage to places that previously wouldn’t have had it. Companies like SpaceX have already begun to launch satellites with the purpose of creating a global network.
Space Agriculture: Also known as space farming, this involves cultivating plants in space environments. This is crucial for long-duration space missions and will be used when colonizing other planets or moons.
Space Insurance: Space insurance is a specialized, emerging form of insurance designed to cover the risks associated with space exploration and other commercial space activities. Given the high costs, technological complexities, and inherent uncertainty of many space ventures, space insurance will continue to grow as a supporting industry to space commercialization.
Credit Pensacola News Journal
Takeaways
If you’re like me, you’ve read this (and maybe the other two space commercialization articles) and are thinking to yourself: “Okay, and?”
It’s difficult to fully articulate what you should be thinking after all of this.
For instance, you may be thinking that there are too many millionaires/billionaires that don’t know how to spend it so they’ve decided to try their hand at space exploration. You’re definitely correct as we’ve seen huge shows of investments from Richard Branson (Virgin Galactic), Jeff Bezos (Blue Origin), and Elon Musk (SpaceX)--so much so that it’s been coined by some “The Billionaire Space Race”. It does seem that they’re a tad bit out of touch with reality as life on Earth really isn’t anything to brag about–there are many problems closer to home they could be solving.
Maybe, instead, you think that all of this space discussion stuff is nonsense. Again, you wouldn’t be entirely incorrect. For many of these space industries I’ve discussed, upcoming significant developments–those that would impact you or I may not be for decades (some may not even happen in our lifetimes). So, should you be worrying about any of these things? Probably not.
Yet, I think some of these sectors have made a significant impact on our lives. For instance, satellites have significantly positively impacted our lives. Advances in space launch technology have significantly changed the way many industries operate.
If that’s all you take from this, that’s totally fine. There are a bunch of different interesting emerging industries, but many of these space industries feel out of touch for regular people like you or me, so if you’re not a space nerd, that’s totally acceptable.
That’s all I have for you on this topic today. Look forward to the final upcoming edition of our space commercialization series (part 4), discussing whether or not humans should be commercializing space (a more down-to-earth viewpoint).
See you Saturday for The Saturday Morning Newsletter,
Drew Jackson
Twitter: @brainwavesdotme
Email: brainwaves.me@gmail.com
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