Who is driving the trillion-dollar space economy?
The space economy is growing rapidly, attracting large investments and giving rise to innovative projects – from mini-satellites to mining resources from asteroids, which opens up new opportunities for business. Despite cheaper launches, the industry faces a critical skills shortage, slowing its growth and underscoring the importance of attracting new talent to space exploration. But what lies ahead when space becomes accessible to business and the boldest ideas become reality? Find out exactly how space startups can disrupt traditional industries and what the next step in this new economy will be.
If you were offered a ticket on a spaceship, would you be willing to travel beyond Earth?
On September 10, a SpaceX Falcon 9 rocket launched from Kennedy Space Center on the Polaris Dawn mission, which sent four non-professional astronauts into the Earth's radiation belts for the first commercial spacewalk.
The crew consists of a billionaire, a former military pilot and two SpaceX employees. This is the furthest journey from Earth in 50 years since NASA's Apollo mission, bringing us closer to the reality of space tourism.
In addition to the dream of space travel, there is also significant business potential here. According to a McKinsey report, the space economy is permeating beyond big projects like rocket launches to impacting everyday life, from weather forecasting to food delivery to cell phone service.
In 2022, the global space economy market, spanning the public and private sectors, reached US$384 billion. Government spending on national space programs has exceeded $100 billion. It is noteworthy that almost 97% of these costs occur in five leading countries: the United States, China, Japan, Russia, India, and the European Union.
The space economy is projected to reach $1.8 trillion by 2035, growing at 9% per year, faster than global GDP growth. Space technologies are becoming critical to industries such as supply chains and transportation.
This potential has attracted startups and investment, but which companies stand out and what are the barriers to success?
The space economy is in the spotlight of investors
1. Space communications: Astranis
Founded in San Francisco in 2015, Astranis creates small communications satellites placed in geostationary orbit. Their compact MicroGEO satellites are the first of their kind and provide connectivity to telecom companies in the US, Philippines and Mexico. For April 2023, the company predicts $1.2 billion in revenue from satellites sold. Astranis raised $750 million and completed a $200 million round in July 2024.
2. Space loot: Astroforge
Astroforge, founded in 2022, is involved in asteroid mining. In 2023, it successfully completed its first mission and raised $55 million. In 2025, a mission to an unknown asteroid is planned to extract rare metals.
3. Cosmic Energy: Star Catcher
As the number of satellites increases, so does the need for energy. Florida-based Star Catcher raised $12.25 million in July to develop in-orbit power satellites. Their first mission is planned for 2025.
4. Russian venture fund for the development of rocket and space technologies: NTI
In 2023, the NTI Foundation, in partnership with T1 and Popov Radio Corporation, plans to create a venture fund to support innovation in the field of rocket and space systems. It is expected that the volume of the fund will be up to 10 billion rubles.
Key Driver – SpaceX
The growth of the space economy owes much to the decline in launch costs, which has made space accessible to startups. Since 2019, the number of launches has increased by 50% annually, while the cost has decreased 10 times over the past 20 years. SpaceX, by reducing launch costs to $6,000 per kg, has enabled many companies to participate in the space race.
Not only does SpaceX help others grow, it also grows itself: Its revenue doubled from $1.35 billion in 2020 to $8.7 billion in 2023 and is projected to reach $13.3 billion in 2024.
The main challenge is personnel shortage
The main problem in the industry remains the shortage of personnel. The industry is unable to keep up with the growing demand for engineers and specialists. Attracting and retaining talent is a challenge that makes startup development difficult, as start-up companies often cannot offer the necessary resources. However, the role of venture capital is important here, since the resource base of established investors can help startups attract the right talent.
Thus, as the hero of one film said: “In the 21st century, the most valuable thing is people.”
I would add…
As international experience shows, the creation of a competitive private space system requires the state to solve three key problems: regulatory, technological and financial.
The first task involves updating the legal regulation of the industry: reducing excessive administrative barriers, creating conditions for private space companies to operate, at least on a non-discriminatory basis, and ideally with the provision of benefits. This also includes simplification of certification of space products, which will speed up the processes of development, testing and optimization in iteration mode.
The second task is scientific and technical support for startups: access to the infrastructure of space enterprises, the possibility of sharing intellectual property, creating a professional community, including incubators and accelerators, and technology exchange. This will allow startups to use developments in the industry, relying on government facilities.
The financial aspect requires attracting private investment and promoting joint projects between the state and business through public funds. This includes encouraging competition among private space providers to reduce prices and developing flexible contract arrangements based on staged payment of services at fixed rates.
For these initiatives to be successful, it is necessary to establish a balance of interests between government and business, separating roles in the market and in the value chain. Private companies should not compete with public companies, but complement them by creating those products and services that are missing from government offers.
In the upstream sector of Russia and other space powers, there is a need for light and ultra-light launch vehicles, small spacecraft, electric engines and power plants with alternative thrust sources – niches that private companies can effectively fill.
However, the private sector faces significant challenges: high dependence on geopolitical factors, volatile interstate trade relations, low risk appetite among investors, and difficulty attracting and retaining qualified talent. Addressing these challenges requires both public and private participation and a strategy that can withstand external factors.
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