Private sector investment in space soared to a record-breaking $70 billion in both 2021 and 2022.
The latest report from the World Economic Forum (WEF), titled “Space: The $1.8 Trillion Opportunity for Global Economic Growth,” reveals the significant transformative potential of the global space economy in addressing critical industry and societal issues. Anticipating a substantial increase in the sector’s value to $1.8 trillion by 2035, the report underscores the growing prominence of space technologies as a formidable force, comparable in influence and reach to the semiconductor industry.
Expanding reach of space technologies
In an increasingly interconnected and mobile world, connectivity is becoming ever more crucial, extending beyond the bounds of our planet. According to the WEF report, developed in collaboration with McKinsey & Company, space technologies are poised to revolutionize industries, emphasizing the role of space in connecting people and goods. While traditional space activities such as infrastructure, satellite deployment, launches, and exploration will continue to grow significantly, the report predicts that space-enabled technologies and businesses on Earth will experience even more rapid expansion.
Sebastian Buckup, a member of the executive committee at WEF, underscored the growing significance of space technologies, stating, “Space technologies are now providing greater value to a broader range of stakeholders than ever before.” Buckup highlighted the profound impact of these technologies across various industries, including food and beverage, retail, consumer goods, lifestyle, supply chain management, transportation, and climate disaster mitigation.
He further noted, “These advancements have the potential to reshape entire industries and could have as profound an effect on business and society as smartphones or cloud computing.”
Key findings
The WEF’s insights report presents four significant findings regarding the emerging space economy. Firstly, it anticipates that by 2035, space will firmly integrate into the global economy. The proliferation of space-based and -enabled technologies, encompassing communications, positioning, navigation, timing, and Earth observation, will drive substantial growth within the space industry in the coming decade.
Secondly, the report indicates a shift in the market dynamics, with traditional space hardware and service providers witnessing a decline in their market share. This decline is expected to pave the way for non-traditional players, such as ride-hailing apps, to emerge as primary providers of navigation services.
Furthermore, the report highlights the broad-reaching impact of space technologies beyond the confines of the space sector. Industries including supply chain and transportation, food and beverage, state-sponsored defense, retail, consumer goods and lifestyle, and digital communications are projected to contribute over 60 percent of the growth in the space economy by 2035. Additionally, opportunities will abound for both traditional and non-traditional players across nine other industries.
Ryan Brukardt, senior partner at McKinsey & Company, emphasizes the role of diverse sectors, including agriculture, construction, insurance, and climate change mitigation, as drivers of the expanding space economy.
Finally, the report underscores the multifaceted return on investment within the space sector. Beyond revenue generation, space technologies are poised to address global challenges such as climate change and disasters. Initiatives such as disaster warning systems and climate monitoring will enhance humanitarian responses to crises, further highlighting the invaluable role of space exploration and utilization.
Space economy set for transformation
The space sector is poised for significant transformation over the next decade, fueled by increasing public investment and expanding global interest. Countries such as Japan, Peru, Saudi Arabia, and Thailand are directing their attention towards fostering growth in the space industry by allocating funds to various space initiatives.
Furthermore, private sector investments are playing a crucial role in driving innovation and accessibility within the space domain. This includes investments in areas like in-orbit inspection, maintenance services, and the development of commercially funded space stations.
Moreover, partnerships between non-space private sector entities and space industry players are on the rise, broadening the scope of collaboration and exploration within the space sector. These developments indicate a dynamic landscape where both public and private stakeholders are actively contributing to the evolution and expansion of the space industry.
“By understanding and embracing the full potential of space, public and private industry players can position themselves as leaders in the space economy, unlocking long-term benefits,” Brukardt added.
