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Morgan Stanley forecasts space industry to reach $1 trillion by 2040
This article is the first in a series of stories highlighting the emergence of the private space industry, in which companies are helping the sector take a major leap. ― ED
By Kim Hyun-bin
The competition in the global space industry is heating up, with billionaire moguls making dramatic moves to spearhead the advancement of commercial space travel.
The commercialization of the space industry by the private sector is gaining momentum quickly, resulting in renewed interest in the public sector as well, contrary to major space projects in the past which were led and run by governments only.
The recent voyages into space of Amazon CEO Jeff Bezos' Blue Origin LLC, Sir Richard Branson's Virgin Galactic Holdings Inc. and Tesla CEO Elon Musk's Space Exploration Technologies Corp. (SpaceX) have attracted much public attention to the billionaires' hopes to commercialize space travel.
The industry has the potential for exponential growth in diverse sectors, including faster world travel via space, orbiting hotels, the establishment of bases on the moon and the colonization of other planets in the future.
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The current leader of the pack is SpaceX, founded by Elon Musk in 2002, which aims to reduce space transportation costs and enable the colonization of Mars by 2050. The company is focused on long-distance space travel and has developed the Falcon 9 and Falcon Heavy launch vehicles, rocket engines and Starlink communications satellites, in part to speed up its efforts in this area.
As a private company, SpaceX has is the first to fund a liquid-propellant rocket to reach orbit, the first to reuse an orbital rocket and the first to send private astronauts into orbit and to the International Space Station (ISS).
Musk has expressed his interest in developing the SpaceX Starship system which includes a family of spacecraft, ground support infrastructure and a super-heavy booster that can lift 150 tons of orbital payload and up to 100 people, all of which is fully reusable, solving what Musk says is an "insanely hard problem."
SpaceX will be ready to launch its Starship with the highest payload capacity of any orbital rocket in a few weeks and plans to send four civilians to visit the ISS for a couple of days by the first half of 2022.
According to Morgan Stanley, these efforts to develop reusable rockets will become a major turning point in boosting future developments in the industry.
"We think of reusable rockets as an elevator to low Earth orbit (LEO)," Adam Jonas, a Morgan Stanley equity analyst, said in the company's report. "Just as further innovation in elevator construction was required before today's skyscrapers could dot the skyline, so too will opportunities in space mature because of access and falling launch costs."
Blue Origin, founded by former Amazon CEO Jeff Bezos, is also speeding up development to commercialize space travel through reusable rockets. Unlike SpaceX which aims for the colonization of Mars, Bezos aims to colonize the Moon.
On July 20, Bezos and his brother Mark, 82-year-old aviation pioneer Wally Funk and an 18-year-old Dutch student named Oliver Daemen, experienced suborbital space for four minutes, while another flight is scheduled to take place on Aug. 26.
Virgin Group founder Richard Branson established Virgin Galactic in 2004. The company differs from SpaceX and Blue Origin in that it uses an airplane-like rocket ship to travel to space. Virgin Group is the umbrella company that many of Richard Branson's Virgin-branded ventures are under.
The company's suborbital spacecraft is air-launched beneath a carrier airplane called "White Knight Two," which ignites 15km in the air to reach 90km above sea level, so as to experience microgravity for a few minutes, before gliding back to base. The company is charging $450,000 per flight but plans to reduce the price to $40,000 within 10 years, in order to commercialize space travel.
Private companies have also been developing space technologies for manned landings on the moon as well as airplane-borne rocket launchers that could place small satellites into orbit at far lower costs and with greater responsiveness than ground-based systems.
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| This rendering shows SpaceX's Starship human lander design. The Starship is the first commercial human lander, and will carry the next NASA astronauts to the surface of the Moon under the Artemis program. Courtesy of SpaceX and NASA |
China's private space industry endeavors
The competition is becoming fierce to gain the lead in the space industry, with latecomer China starting to ramp up its efforts to sharpen its competitive edge in the field.
China is competitive in the field of small satellite development and launching. Just like the U.S., China's space development was originally government-led, but private sector efforts have also been mushrooming.
"There have been drastic developments in the technological aspects of the space industry and … reduced government-led projects. In the past, satellites were only used for military purposes, but now there is the need for private satellite data and the technological gap between countries has lowered significantly," said Yun Gun-jin, a professor of aerospace engineering at Seoul National University. "The price for launchers, which was very high in the past, has significantly dropped through the development of SpaceX. Such (comparatively) lower costs have led to the development of more diverse types of satellites by the private sector."
According to a 2020 report by market research firm Euroconsult on China's space industry, there are over 100 private companies in the civil aerospace sector of China, which has made over 125 investments worth $1.8 billion since 2014.
China also aims to construct its own independent space station by the end of 2022, as the current International Space Station (ISS) was jointly developed by Russia, the U.S., Canada, Japan and Europe but bans China's participation.
According to the Morgan Stanley report, overall, the global space industry ― which includes both renewed public-sector interest and private-sector projects ― could generate revenue of more than $1 trillion or more by 2040, up from the current $350 billion.
The global investment bank believes that the most significant short- and medium-term opportunities may come from satellite-based broadband internet access taking up 50 percent of the projected growth by 2040, and as much as 70 percent in a bullish scenario. The launch of satellites offering broadband internet services could drive down the cost of data, leading to a drastic increase in demand.
"The demand for data is growing at an exponential rate, while the cost of access to space (and, by extension, data) is falling by orders of magnitude," Jonas said in the report. "We believe that the largest opportunity comes from providing internet access to under- and unserved parts of the world, but there also is going to be increased demand for bandwidth from autonomous cars, the Internet of Things, artificial intelligence, virtual reality and video."
