Billionaires clash and America wins 21st century space race
Richard Branson floats in the cabin of SpaceShipTwo during the microgravity phase of his July 11 SpaceShipTwo flight. (credit: Virgin Galactic)
by Eytan Tepper
Monday, August 30, 2021
Whoever wins the so-called billionaire space race, the United States wins the new space race. In the new era of space exploration, where commercial companies are taking the lead, they are mostly based in the United States. Symbolically, British billionaire Richard Branson, the first in space, was launched from Spaceport America in New Mexico, where his company is based.
“New Space”, new race
In what is called “New Space”, the commercial sector is gradually taking the lead in space activities. One of the hallmarks of the current era of New Space is the so-called billionaire space race, in which billionaires who have made their fortunes elsewhere invest their wealth and talent in daring plans to realize their visions. Elon Musk (PayPal) created SpaceX, Jeff Bezos (Amazon) created Blue Origin, and Richard Branson (Virgin Records, Virgin Atlantic) created Virgin Galactic. Along with the many not-yet-famous space entrepreneurs and startups, they are bringing a boom to space activities.
|The model of centralized and government-led space activities born in the 1960s has, over the past two decades, given way to a new model in which the private sector shares the stage.|
On July 11, billionaire Richard Branson took part in Virgin Galactic’s Unity 22 mission to space, making him the first of the racing billionaires to go to space, and thus launching the space tourism business of his company. Jeff Bezos drove Blue Origin’s New Shepard into space nine days later. Elon Musk hasn’t been to space himself yet, but his company SpaceX has transported astronauts to the International Space Station, and his red Tesla roadster, launched into space in 2018, is orbiting the Sun. . You can track its current location here.
“Jealousy among teachers increases wisdom” provides the Babylonian Talmud; in the space context, competition, perhaps jealousy, between billionaires and other space entrepreneurs is causing space activities to explode.
The future of space exploration lies in commercial activities
The commercial space sector is growing rapidly and is taking the example of national space agencies. It lowers start-up costs and introduces new activities and business models, including tourism, space internet, factories in space, and microgravity pharmaceutical manufacturing.
Harvard Business Professor Matthew Weinzierl pointed out that the model of centralized and government-led space activities born in the 1960s has, over the past two decades, given way to a new model in which the private sector shares the stage. Three-quarters of global space activity ($ 400 billion) is commercial space revenue, spearhead of the satellite communications segment. The United States already has the lion’s share of traditional space segments, with 44% of global satellite industry revenues. It is now on track to lead the way in new segments as well.
A new dataset built at Laval University by Prof. Jean-Frédéric Morin and myself as part of the Astro-environmentalism project reveals trends in the global space industry. The dataset includes details on more than 1,500 space players from around the world and the preliminary results of its analysis were presented in June to the 60th session of the Legal Subcommittee of the United Nations Committee on the Peaceful Uses of Outer Space. The data show the sharp increase in the share of private space actors compared to the first decades of the space age (from 1957), and although there is today more geographic diversity in places location of players, the United States is widening the gap. Between 2010 and 2019, the number of space players almost doubled (an 89% increase), with more than 86% private players, of which 34% are based in the United States; this is equivalent to five times those based in second and third place in the UK and China respectively. The number of new organizations based in EU countries taken together (excluding the UK) is just over half that of the US (56%). New organizations are significantly smaller than before, with an average size index (combining number of employees and budget) of 2.9 versus 8 at the start of space exploration. Space startups are one thing.
|Whoever wins the billionaire space race, the business sector is giving America victory in the 21st century space race.|
While space sector revenues are already primarily commercial, investments are still dominated by governments, but are on the way to being led by private funds. International public spending has been generally constant over time, about $ 80 billion a year, 60% of which is US government spending. Private investment, previously marginal, has reached a record $ 8.9 billion in 2020, despite COVID-19, and it has reached new heights in 2021 so far with $ 5.7 billion in the first quarter alone. A total of $ 113 billion was invested in the high-tech sector in the United States alone in 2019, followed by China with $ 45 billion. There is no reason why private investment in the space sector should not ultimately exceed public spending. Here too, most of the venture capital firms investing in the space sector are based in the United States, including some who are dedicated to this sector, and where most private funds are invested: 55% of private funds in 2019 invested in US-based companies and 24% in UK-based companies. Indeed, despite the increase in private financing in China, the United States is far ahead. Morgan Stanley believes that the global space industry could generate revenues of over $ 1 trillion or more in 2040. It’s a big cake, and, according to current trends, it will be mostly American.
Symbolically, the first billionaire to fly his rocket in space, Branson, is an Englishman who made his fortune in the UK, but he flew into space from Spaceport America in New Mexico, where his Virgin is based. Galactic.
Being the first does not necessarily mean being the final winner. In the first space race, the Soviet Union had all the first “firsts” including the first satellite (Sputnik 1), the first human in space (Yuri Gagarin), the first woman in space (Valentina Tereshkova) and the first object to touch the Moon (Luna 2). But it is the United States that is largely remembered as the winner of this race. On July 20, 1969, NASA’s Apollo 11 first landed humans on the Moon (Neil Armstrong and Edwin “Buzz” Aldrin), offering the United States victory in the first space race. . While Richard Branson is the first space mogul to launch into space, the race is not over yet, and we might even see new names coming, from already established billionaires or space startups. Yet, whoever wins the billionaire space race, the business sector offers the United States victory in the 21st century space race.
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