ADVENTURE CAPSTONES: MOONSHOTS AND THE NEW SPACE ECONOMY
A new space race for global dominance and market access is taking shape amongst governments but the space economy has been fuelled by billionaire’s Capstone projects.
“Curiosity is the essence of our existence” Gene Cernan, the last man on the moon, 1970
“Getting to Mars will be risky, dangerous, uncomfortable. But it will be the greatest adventure ever – ever in human history” Elon Musk, 2016
The essence of what we refer to as a Capstone Project is pushing the boundaries outside of one’s day to day business. Many of the billionaires of the world have made their money in one way and look for passion projects to increase their life’s purpose and meaning somewhere else. Often looking for an adventure...
When it comes to adventure through space, many ultra-wealthy (Musk, Branson, Bezos, Bigelow etc) have come to one of two conclusions:
1) We cannot sustain life on this planet alone and therefore need to inhabit other planets
2) To sustain life on this planet we need to make better use of the resources from space
There is potentially a third conclusion, perhaps thinking more cynically about the motivations (although it does increase the likely of getting other more commercially-minded partners and potentially governments along for the ride with your project):
3) It could be a multi-trillion-dollar commercial opportunity
Senator Ted Cruz: "I predict the first trillionaire will be made in space," he says. "We don't know precisely how, any more than when exploring previous frontiers, we've known exactly what we would find. But that drive to innovate, to explore, to discover, I think produces enormous benefits for the economy and for the world."
Governments however have not stepped up to space in the last 40 years. The likes of NASA used to be able to command a significant spend of US Federal budget. This peaked in 1964-66 consuming roughly 4% of federal spending. The focus of the US and other governments moved from space through the 70s, 80s and 90s.
The break-up of the space shuttle Columbia in 2003 led the US to decide to end the shuttle programme by 2010. Nasa was ordered to create a replacement called Project Constellation, but budget cuts and other difficulties, meant that it failed to get off the ground. The result of this led the Obama administration to tell NASA to refocus on deep-space missions and rely on private companies to provide access to the International Space Station and low Earth orbit.
Space has been a bit of a political football, according to Texan Senator Ted Cruz in the US: "History teaches that space policy far too often has bounced from one program to another with different administration's coming in and cancelling their predecessor's program."
Many of us, however, do not realise the impact the likes of NASA can have on people’s everyday lives. Over 40 years NASA has created more than 2,000 inventions that later became products and services. Innovations such as the dialysis machines, CAT scanners and freeze-dried food are a result of the pursuit of space-related projects.
But it really is shaping up to be a super interesting time for the space industry. With renewed political ramifications and fighting between the superpowers US, China, Russia, space is once again a place to argue and compete over. There is no more obvious statement of intent than with the United States Space Force- the space warfare service branch launched by Trump in 2019. The military service branch sits within the Department of the Air Force. It shows where the US want to lead, police and govern in the future…
Whilst governments in the 2000’s were focusing their budgets on other things, it was ultra-wealthy that started to think about space again and create Space Capstones. There seems to be a golden ten years of new projects and funding. Robert Bigelow founded Bigelow Aerospace in 1998. Bezos formed Blue Origin in 2000, Musk with SpaceX in 2002, Branson with Galactic in 2004. Perhaps they were all inspired by the launch of the International Space Station (ISS) in 1998.
Space has seen a recent resurgence for five core reasons:
1) Commercial entities being patiently backed by private investors willing to dig deep and progress their own Capstone projects
2) Technology such as reusable rockets and propulsion systems making more space activities possible for less costs. There is a belief again that things such as landing humans on Mars are now achievable with the various advances in technology
3) The likes of NASA and Space Agencies willing to embark on partnerships with the private sector, providing lucrative contracts and showing a commitment to outsourcing much of their activities and missions
4) Governments increasing their interest due to both commercial but also military uses and capabilities
5) The realisation that there are potentially strategic first-mover advantages to progress Space projects now
Space has recently seen a new focus from the private sector. Signified for example by the first venture fund dedicated solely to space, Seraphim Capital launched the £70m Space Fund in 2016. The fund is to finance the growth of companies operating in the Space ecosystem.
In 2017, Luke Nosek (one of the co-founders of PayPal who then went on to start Founders Fund) launched Gigafund, an investment fund to focus on space exploration. Gigafund was the first institutional investor into SpaceX and Luke sits on the company board. Luke has told us it is about backing Elon Musk over a period of decades to build businesses with resilient founders that are truly transformative.
The allure of space is becoming increasingly appealing due to the economics and advances of terrestrial technology. Partially reusable rockets such as the Falcon 9 by SpaceX (and in the future rocket Starship which is designed to take people to deep space destinations like Mars) alongside smaller satellites are reducing the costs of launching (which has traditionally been very uneconomical).
In May 2020 the first commercial company (SpaceX) sent two astronauts into space. A US company on US soil sending US astronauts for NASA to ISS. A watershed moment encouraging many more people getting excited about space again. Let us not forget how the world stopped to watch Neil Armstrong’s first steps on the moon – it being one of the most celebrated and inspiring moments in human history. The recent SpaceX Nasa launched moved us all one step closer to sending humans to Mars.
WHY THE SPACE ECONOMY MATTERS
While the space sector is small compared to others, space plays an indispensable role in the global economy as a whole. In fact, the globe’s highest-grossing economic sectors, such as agriculture, mining, transportation, information technology, finance, and insurance, all rely on space systems.
Separate studies conducted by financial firms Goldman Sachs, Morgan Stanley, and Bank of America Merrill Lynch found the space economy could reach between $1 trillion and $2.7 trillion by the 2040s. At $2.7 trillion dollars, the space economy would be roughly the size of today’s civil aviation sector. It would be larger than the 2017 gross domestic product of the UK or roughly half the size of the global car and automobile manufacturing industry.
In our special full ‘Wingman and Why Space Matters’ FULL REPORT we highlight eight areas that could fuel the Space economy in the future. Below is a snapshot of the eight strands of the Space Economy
1) Space Exploration
The use of technology to explore outer space. A number of companies exist to explore space further, each with a different focus or mission. The big two in the space race are Elon Musk and Jeff Bezos. Others have included the likes of Russian billionaire Yuri Milner who backed the Breakthrough Starshot project for an interstellar probe. The project was co-founded in 2016 by Milner, Mark Zuckerberg and the late Stephen Hawking.
Space Explorer projects include Elon Musk and SpaceX, Jeff Bezos and Blue Origin and Yuri Milner with the Breakthrough Starshot. To learn more enquire about the full report
2) Space Tourism
Richard Branson’s Virgin Galactic for space flights, but there are also habitable space structures planned via the likes of Robert Bigelow and Bigelow Aerospace and space hotels for example Axiom
Richard Branson’s Virgin Galactic in development since 2004. UBS predict that the space tourism market will triple to $805 billion by 2030
3) Point to Point Travel
Or Earth-to Earth as SpaceX calls it. Traveling between two places on Earth at very high speeds either extremely high up in the atmosphere (much higher than current commercial planes go) or even potentially through space. The advantages of doing this are that you can go much faster as the atmosphere thins and friction and air resistance lower. The International Space Station, for instance, performs a full orbit around Earth once every 90 minutes. NYC to Shanghai in 40 minutes anyone?
New York to Paris in 30 minutes. New York to Shanghai in less than an hour. Once again it looks like Musk up and Branson leading the charge
4) Communications AND OBSERVATIONS
There are a number of players looking to create more satellite constellation networks or mega-constellations. The importance for critical infrastructure, GPS and broadband/ spacemobile. Add in artificial intelligence and machine learning and if you control the data observed from space, you will be able to seeing more, predict more…. and earlier…
Significant unmet demand for low-cost global broadband capabilities: Elon Musk and Starlink, Jeff Bezos and Kuiper Project, Telesat and others in the race to launch a constellation of Low Earth Orbit satellites that will provide low-latency, high-speed broadband connectivity to unserved and underserved communities around the world
5) Space Junk Removal
After decades of use, critical Earth orbits, like low, medium, and geosynchronous orbits, are riddled with destructive space debris. Active debris removal is necessary to solve this problem, and here, market solutions might help
In December 2019, the European Space Agency commissioned the world’s first space debris removal. Without active debris reduction, the orbit would be overburdened with debris in 100 years, rendering it unusable.
6) Research & Development in Space
Space has been a popular place to conduct R&D. Especially within physical sciences, life sciences, remote sensing, and technology development. The keenly sort out condition for R&D is microgravity (the condition in which people or objects appear to be weightless). The International Space Station currently provides such conditions and has commercialized its onboard Lab.
In August 2011 NASA entered into a 10-year agreement with the Center for the Advancement of Science in Space (CASIS) to maximise the use of the ISS US Lab. The initial agreement was extended now through to 2024.
7) ASTEROID Mining
Ten years ago, mining in asteroids seemed unrealistic, but today, there are companies operating in this field. Is it the real reason Elon Musk has The Boring Company for example?
A recent report from Data Bridge Market Research has also suggested that the global space mining market is likely to rise from well under $1 billion today to $3.28 billion by 2026
8) Governance / Policing
What happens if both the US and China want to mine the same asteroid? What happens if satellites are set on the same path, who changes course? What if 40,000 satellites cause light pollution? What if Satellites are used for evil acts?
The dual-use problem is a regulatory issue that addresses the fact that some space technologies are capable of both commercial and military functions.
Governments are eager to control dual-use technologies for fear that these systems and services in the hands of adversaries will pose a risk to national security
The full Wingman report also looks at the different strategies being deployed from the likes of Luxemburg and Russia. Key to their success is attracting investment from and partnerships with the private sector and often, billionaires and their Capstones. We also consider the role of the UK in the space economy and the calls for the government to look at infrastructure and the space startup scene as a key potential driver in growth for the economy in the future.
FOR MORE INFORMATION ABOUT THE FULL SPACE ECONOMY REPORT PLEASE EMAIL enquires@wingmanthinks.com
TO READ THE FULL INTERVIEW WITH LUKE NOSEK ABOUT WHY HE BACKS FOUNDERS SUCH AS ELON MUSK CLICK HERE