One of the more narrow-minded approaches to looking at innovation and growth is the argument we live on a planet with finite resources so we have to cut back and retreat to a prelapsarian age.
This is a defeatist argument to challenges, such as climate change, that, once recognised, can then be tackled. As Elon Musk once said of Mars, it is “a fixer-upper of a planet” (and perhaps undisclosed inspiration behind one of film Frozen’s songs released a year later?).
Certainly, attention on the world’s beyond our atmosphere is increasing.
A year ago, investment bank Morgan Stanley’s report, Space: Investing in the Final Frontier, asked: “Will declining launch costs, advances in technology and rising public-sector interest position space exploration as the next trillion-dollar industry [by 2040, up from $350bn currently]?”
The report gave the analogy of how lifts transformed cities. In 1854, when Elisha Otis demonstrated the safety elevator, the public could not foresee its impact on architecture and city design. But roughly 20 years later, every multistory building in New York, Boston and Chicago was constructed around a central elevator shaft.
Adam Jonas, equity analyst at Morgan Stanley, in the report said: “We think of reusable rockets as an elevator to low Earth orbit (LEO).
“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.”
The investment implications for a more accessible, less expensive reach into outer space could be significant, with potential opportunities in fields such as satellite broadband, high-speed product delivery, and human space travel.
The United Nations has set four pillars for its Space2030 program, covering:
- space economy, focusing on the development of space-derived economic benefits;
- space society, to advance the societal benefits of space-related activities;
- space accessibility, allowing access to space for all; and
- space diplomacy, which strives to build partnerships and strengthen international cooperation and the governance of space activities.
While the most recent space exploration efforts have been driven by handful of private companies in recent years, discussions of a sixth branch of the US military— the Space Force —along with growing interest from Russia, India, UK and China and other more emerging nations, means public-sector investment is also increasing.
Italy-based venture capital firm Primomiglio has just raised €58m ($68m) in its first close of a fund focused on space investments.
Primo Space is eyeing up to €80m for a final close, with commitments from state-backed European Investment Fund and CDP Venture Capital, owned by Italy’s state investment funds.
The Primo Space fund will invest in technology spinoffs and startups and will work closely with the Italian research and academic world, including the Italian Space Agency, which is the second-largest contributor to the European Space Agency.
Enrico Resmini, CEO of CDP Venture Capital, said: “The space economy is a sector of primary importance in Italy, with a turnaround of €2bn and with over 7,000 employees throughout the supply chain.
“Until now a specialized venture capital fund was missing and Primo Space Fund represents an important opportunity to support technological innovation in our country.”
But space is hard. A small percentage of the space startups financed in recent years are producing revenue and it is tough to say whether any of them are profitable, Janice Starzyk, Bryce vice president of commercial space, told SpaceNews.
Luxembourg’s multi-million dollar investments in US mining companies Deep Space Industries and Planetary Resources have seen losses. But sunk costs by others creates opportunities if the table stakes get too high.
US-based Hughes Network Systems has committed $50m to join Bharti Enterprises and the UK government in acquiring the bankrupt satellite internet services provider OneWeb. SoftBank-backed OneWeb had raised $1.25bn last year and had been targeting what Morgan Stanley called the most significant short- and medium-term opportunities, from satellite broadband Internet access.
Space industry startups attracted $5.7bn last year, “shattering the $3.5bn record set the previous year,” according to Bryce Space and Technology, a US-based consulting firm.
Investors took stakes in 135 space startups around the world with four – SpaceX, Blue Origin, OneWeb and Virgin Galactic — grabbing nearly 70% of the total, according to Bryce’s report, Startup Space: Update on Investment in Commercial Space Ventures, seen by SpaceNews.
Governments are finally providing many of the large and small companies with contracts – SpaceX’s mission to the International Space Station in May was a first there by a crewed rocketship – and with increased funding there is finally the joining of public and private sector responses to unlock the research on how to achieve this planet’s goals.
