Approximately 450 years after Copernicus discovered Earth revolved around the Sun, NASA safely landed humans on the moon and brought them home in one piece. Undoubtedly, this successful mission was a remarkable achievement for its time – in comparison to the Apollo computers, today’s average iPhone has one million times more RAM and 100,000 times more processing power. NASA’s success borders the miraculous. With advances in modern technology, human ingenuity, and the pervading thrill of space, surely the Phasers, “Beam me up, Scotty” transporters, and Warp Drives debuted in Star Trek so many years ago are a reality today, 61 years after the historic Apollo 11 launch. Right? Not quite. In the 21st century, instead of engineering light speed engines, NASA endeavored to take a vital step in ensuring the accessibility of outer space: creating a safe, affordable, efficient, and reusable launch vehicle (hint: Space Shuttle). While instrumental in promoting space research and building the ISS, the Space Shuttle failed to accomplish its elementary mission (indeed it was expensive and inefficient). So what’s next? Is space exploration a thing of the past? Are humans destined to languish on Earth for eternity? Again, not quite. Enter, Elon Musk.
NASA Funding and Private Sector Collaboration
NASA’s objectives change with every new Administration as its budget becomes increasingly politicized. During a press conference in September 2019, President Trump directed NASA towards Mars, which ended President Obama’s plans of sending humans to an asteroid, which in turn ended President Bush’s plans of sending humans to the moon. Only time will tell what President Biden has in store for space, but according to Jeffery Kluger of Time Magazine, the current president is a “science president” and “very good for NASA” (Time Space Newsletter, January 22, 2021). While this tumult is cause for concern for the space industry, it also creates opportunities. We must remember that NASA will always have money; we just need to figure out where they’ll spend it.
NASA can’t afford to engineer a mission on its own, regardless of where President Biden wants to put American footprints. In recent years, NASA began to cooperate heavily with the private sector by financing exploratory missions and R&D on launch vehicles. The Agency funded three private companies, Astrobotic, Intuitive Machines, and Orbit Beyond to build lunar landers for the Artemis program and awarded SpaceX a $2.6 billion contract and Boeing a $4.82 billion contract to “develop and operate a new generation of spacecraft and launch systems capable of carrying crews to low-Earth orbit and the International Space Station.” In today’s economic climate, especially with more pressing issues at hand (COVID-19 and global warming come to mind), private space technology companies (think SpaceX, Blue Origin, Virgin Galactic, and Boeing) rely on governments for capital. Tickets for admission to the space sector are wildly expensive, and NASA is pumping money into the market. These huge financings will allow private sector start-ups to flourish and grow larger than NASA ever could.
The Space Economy
New technologies often catalyze modernization and new eras of industry. With reusable rockets decreasing launch costs by 90% in the last decade, we could be on the brink of market creation much like the Genentech-led boom in the 1970s. Analysts at Morgan Stanley believe the space industry will generate revenues upwards of $1 trillion by 2040.
Blue Origin and Virgin Galactic are also making strides in birthing space tourism. Here, once more, is the naissance of a market.
Investing in a Lofty Future
Investing in space companies, even today, is a long-term endeavor. Jeff Bezos envisions producing all terrestrial goods in Earth orbit, deeming our planet residential. This is a lofty goal but might well become reality. The team at Relativity Space is 3D printing rockets and building the first automated rocket factory. Virgin Galactic is selling seats on its space plane ride to (near) outer space. NASA is revolutionizing the economics of space flight by creating private competition. Elon Musk wants to colonize Mars. And isn’t the ISS just a space hotel for scientists?
It is time to get in on (off of?) the ground floor. No person, company, or government will be able to explore this final investment frontier alone. Let’s ride the excitement of Elon Musk’s coattails and turn our pocketbooks towards the skies (I’m looking at you, VC firms). Let’s go where no man has gone before. Let’s venture.
—Herbert Traub, Student Associate