Space economy is the full range of activities and the use of resources that create value and benefits to human beings in the course of exploring, researching, understanding, managing, and utilizing space. The OECD Space Forum provides a definition of global space economy that comprises the space industry’s core activities in space manufacturing and in satellite operations and other consumer activities that have been derived over the years from governmental R&D. It includes all public and private factors involved in developing, providing and using space-related outputs, space derived products and services and the scientific knowledge arisen from space research.
Artist's view of three Tracking and Data Relay Satellites (TDRS), the ISS and Hubble Space Telescope orbiting Earth. – Credits: NASA/Goddard Space Flight Center.
Special Features of Space Economy
The space sector has distinguishing features such as the use of cutting edge technologies and longer terms for both project development and return on investments. It is a government dominated sector, as access to space is costly, involves technical risks and the viability of space enabled services requires large users markets. Linkage to defense is deeply rooted since the very beginning of the Space Age, as during the Cold War space activities were also a tool of political and military confrontation between USA and USSR. Nowadays, despite the growing importance of commercial space sector, the use of space for defense purpose remains prominent thanks also to space technologies that have both civil and military applications like weather forecast, which can also be used for early warning, remote sensing, with its applications in intelligence, and global navigation, a precision targeting system.
Main customers of space-related products and services are still Governments, investing in a wide range of activities due to the value of space for strategic, economic goals and national prestige. Public investment constitutes the main source of financing for technological development related to major space projects, supporting R&D expenses over the whole value chain. Space manufacturing is particularly dependent on institutional civil and military investment. The traditional massive involvement of public actors in space can be explained with the particular features of this sector, whose complexity and economic parameters might sometimes discourage the private sector. In fact, a profit-maximizing firm shall likely invest and establish an efficient, cost-effective business model targeting a lucrative segment of the market, while a Government might address to other results that don't depend on profitability. However, the increasing number of private entities currently engaged in space activities is gradually operating a shift in the traditional roles of public and private sector.
Please go to Space Safety Magazine to read the entire article.
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