Space Economy Shifts

Space Economy Shifts

Space 4.0 is the application of space to global challenges such as climate change, demographic development, migration, shortage of resources, conflicts and catastrophes, energy, digital divide, health and curiosity. It is a driver for technological improvement in automation, miniaturization, manufacturing, machine-machine and human-machine interaction, connectivity, big data, and biotechnology. It is driven by private companies and entrepreneurs seeking return on risk capital by targeting commercial customers with innovative products and services developed for space. Space becomes an enabler of knowledge jobs, growth, decision and policy making. Space 4.0 inspires and motivates future generations.
– Erik Kulu

Everyone agrees that the space economy is changing; far more contentious is naming the change. Today marks exactly four months I've been exploring the space industry and in that time I've heard the following names suggested: Space 3.0 Space 4.0 New Space, Alt Space, Commercial Space, and probably many others I haven't seen, yet. I think this over-complication stems from a lack of historical perspective. History shows that only two phases to the space industry exist.

Until recently, only large institutional space agencies (NASA, CSA, ESA, etc.) had resources to put man or material into space. With so much unknown about the environment beyond our atmosphere, the focus of the institutions was almost exclusively dedicated to research, discovery, and testing. The equipment for getting and staying in space was also new. So, engineers built projects to singular requirements, with no regard to previous or future projects.

Let's call this phase of space exploration the "Boffins and Bureaucrats" phase, as it was government (especially military) and really smart people that dominated during this time. They made plans, found budgets, set missions, hired astronauts, and so on. The smart and political people exercised power over space.

After 60 years, the Boffins and Bureaucrats phase is ending. Rather than a crisp clean delineation between one phase and the next, though, it's a messy transition. A major characteristic of the transition: the agencies are moving into a client role. Governments, while still investing in space, are delegating increasing portions of their purview and buying services from private partners. Like the "Bureaucrats and Boffins" phase, let's call it the next phase the "Business and Blue Collar" phase based on the types of people that will run it.

The "Business and Blue Collar" phase is marked by private business interests taking over the space by setting their own agendas and taking less and less instruction from the first group. The business types, motivated by profits and seeking to return investment money, force progress on topics like standardization, efficiency, mass market adoption, and customer experience. The different focus dependably results in hiring specialists to run equipment (usually blue-collar workers), tighter margins, less interest in R&D or pure science activities.

Interestingly, this pattern of "Bureaucrats and Boffins" to "Business and Blue Collar" holds across many industries. One example is rail, which was initially the domain of engineers and governments. During the early phase, no two train lines were the same; each used different engines, carriages, and rail gauges. Although it started much earlier, by the 1990s, the railways had transitioned to corporation ownership virtually everywhere. Business requirements naturally pushed for standardized equipment, better customer services, and tighter margins, which meant blue-collar workers replaced most of the engineers, building, running, and serving all aspects of railways. A bit more thought and similar trends reveal themselves in airlines, computers, education, and many other industries.

For anyone with this historical perspective, the recent discussion about policy and regulatory challenges facing commercial space station developers at the 2022 Beyond Earth Symposium made sense. NASA reportedly said that it will not be paying for space station development and governments will not be primary customers; instead, operators must find other revenue sources. Science will move from the primary driver for long-term space exploration and will increasingly watch from the back seat.

Within the context of "boffins and bureaucrats to business and blue collar, " the shift we are seeing makes perfect sense. For those coming up in the previous era, it appears as an unwelcome paradigm shift.

WPenner's big goal is helping the average person profit from the shift. For WPenner, having most people watch from the sidelines while a perceptive few profit is insufficient. Nor is it reasonable for the average person to delve into high-risk venture capital investing, where the returns are astronomical or devastating. Our Space Collective is taking shape to help the average person find meaningful involvement with meaningful returns from the coming shift in the space economy.


Photo by Mech Mind on Unsplash