Launch costs have become increasingly accessible thanks to technological advancement, making space accessible to companies outside the traditional aerospace sector. Medical firms could use orbital farms for organ transplantation while semiconductor firms could produce chips there.
These trends are prompting businesses to explore use cases that would have seemed inconceivable just a few years ago, creating an industry worth an estimated $1 trillion that has investment implications across sectors.
Space-to-Earth Activities
Space economy is creating new revenue opportunities, but is still in its infancy. Therefore, investing in this sector requires careful consideration of both risks and returns – both near-term and long-term – when considering investment decisions in space sector investments. A thematic exchange-traded fund (ETF) may help provide diversified exposure to space industry investments without missing opportunities.
Decreasing costs associated with satellites and launch vehicles have attracted investment from businesses across all industries, who seek to leverage outer space’s unique characteristics (for instance, low gravity environments) in order to advance earthbound products and processes.
Space-to-earth activities highlight an emerging opportunity for established aerospace businesses to form partnerships with firms that traditionally do not venture into orbit. Such partnerships could open the way to innovative applications like pharmaceutical companies using space to conduct cell culture studies in order to predict diseases or semiconductor manufacturers testing manufacturing processes in zero gravity environments for improved design and productivity.
Space-to-Space Activities
Public agencies such as NASA and the intelligence community have traditionally provided most of the funding for space exploration; however, thanks to lower costs and more sophisticated technology, private firms have now come forward as providers of funding for this sector of activity. They are taking advantage of opportunities available through private space exploration while exploring innovative applications that could have long-term commercial implications.
Pharmaceutical companies could, for instance, establish cell cultures in orbit to predict disease models while semiconductor firms could test whether vacuum conditions and zero gravity improve production processes. Such projects might have seemed unlikely a few years ago but are likely to gain momentum as space exploration technologies advance further.
Governments should collaborate with these businesses to clarify how property rights over resources such as water on Mars, ice on the Moon, and orbital slots will be administered – this will ensure that business is conducted without leading to market distortions or strategic competition.
Space-for-Space Activities
As costs continue to decrease and technology advances, companies that prioritize space as part of their core business will enjoy a first-mover advantage. Pharmaceutical firms that set up labs in space could accelerate research and development faster due to its unique environment; and semiconductor factories could produce chips more efficiently than on Earth.
Companies will require careful regulation and support from government to flourish. Government should refrain from using space economy funds for military expenditures that extend into space and compete with commercial activities in space, while also permitting private-sector astronauts more voluntary risks than governments currently tolerate for government-employed astronauts – an adjustment which will require a different mindset, yet is crucial in creating a true space economy that promotes its development; additionally it requires clear international law regarding property rights, contracts, and liabilities related to space assets.
Space Settlements
Since more than 50 years, people have dreamed of harnessing space for something other than just satellite launches and astronaut explorations, yet the business case for using outer space as a source for materials or building things that cannot be produced here on Earth has never made headway.
private entrepreneurs have come back into play. Billionaires such as Paul Allen, Elon Musk, Jeff Bezos and Richard Branson are leading organizations like Stratolaunch Systems, SpaceX, Blue Origin and Virgin Galactic; each see opportunities such as optimizing broadband infrastructure in low Earth orbit, developing solar factories on an asteroid or Moon, sending passengers beyond Earth – including visiting destinations like ISS or Mars – that exist beyond terrestrial life.
Diversification is essential to the success of the space economy, along with effective government regulation and support. There’s no reason to expect that it won’t continue growing into something significant for investors to exploit.
