Amidst a widespread international economic crisis, the space industry proved resilient, demonstrating growth and expansion through 2009 and into 2010. While several other leading industries suffered dramatically, and many governments struggled to remain fiscally viable, the space industry defied the upheaval and broadened its fields of endeavor. This is due in large part to the space industrys robust array of products and services, which enables it to respond rapidly to changes in global demand. The relationship between government and commercial enterprise is evolving, as can be seen in the proposed changes to the U.S. national space program announced in February 2010.
This evolution will likely include an increasing role for the private sector through the development of commercial space markets and the spinoff of space technology into non-space industries. Research performed aboard Earth-orbiting platforms, such as the International Space Station, is but one of the many avenues that space provides for the development of knowledge and applications with near-term commercial potential. Meanwhile, the increasing diversity and importance of military space activity in the past year continues a trend as armed forces enhance their tactical communications, imaging capabilities, and intelligence applications. Military interest in space has already led to the commercialization of navigation technologies and satellite imagery, and it is reasonable to expect further advances as other capabilities reach the commercial sector.
Governments around the world have taken a pragmatic approach to challenging economic times by focusing on practical, close-to-home projects while rethinking longer-term, high-cost strategic and visionary programs. The U.S. plan, for example, seeks to invest more in primary research and development, education, and commercial space. While some countries will level their funding for space in the next few years, others such as the United States plan to increase spending. Part of the reason for this increase is the expectation that it will stimulate the economy by encouraging innovation that reaches far beyond the space sector itself. As more nations realize the strategic impact and economic potential of space, motivations for national space activity are not only about the fulfillment of state-sponsored ambitions but also about the development of an industry that can compete in a global marketplace.
Space Products + Services
Space products and applications provide increasing monetary and social benefits to everyday life. Powerful technology combinations are bringing new products and services to market. Examples abound, with several of the most exciting and fastest-growing uses being delivery of high-definition television and the development of three-dimensional (3D) television content. These build on the ability of space systems to rapidly provide new forms of media to a broad customer base. The desire of consumers for constant connectivity plays to another of the space industrys strengths. Services can be made available to customers on the move, anytime, anywhere, simply by tying terrestrial mobile devices to satellites.
The results of this fusion can be seen each day in the many space-enabled services on mobile phones, such as location-based applications that harness imagery, social networking, and a plethora of other information. A driver looking for fuel on a road trip can easily map the most direct route to the nearest gas station and pre-order lunch in a nearby restaurant. Hikers who want to update their social networking pages with the latest pictures of a backpacking tour can use satellite connections and applications that make the process as simple as a phone call home.
Space-related systems are experiencing dynamic commercial growth. Low-cost GPS hardware and new geographic reference applications are embedded in cars, phones, homes, and businesses. Land imaging services for commercial and government use have changed the way people travel and spend their leisure time, and have added enormous detail to our understanding of urban and rural landscapes. The worldwide networks enabled by space are altering entertainment habits and improving the experience of viewing sports, gaming, videoconferencing, and Internet browsing.
Operating in a very different environment from the average consumer, unmanned aerial vehicles (UAVs) also rely on numerous capabilities provided by space. Primarily used as military platforms, these aircraft often depend on satellites for communication and control. Civil authorities and businesses alike have realized the applications and benefits of these systems, and there has been considerable interest in non-military UAVs. In the foreseeable future, UAVs will find new missions providing a layer of capabilities between the Earths surface and the satellites in orbit. Their space-based connections and control systems will allow them to survey disaster areas, provide emergency communications, monitor borders, and transport mail and goods.
All of these capabilities exist and succeed largely due to space technology. From security systems used at airports to enhanced electrolyte formulas for hydration, technologies originally developed for space improve public health and safety every day.
The Space Economy
While the global economic crisis grabbed the headlines daily in 2009, the global space industry experienced steady growth throughout the year. Estimated space industry revenue and government budgets increased by 7 percent, to $261.61 billion. This amounts to 40 percent growth during the previous five years for the global space economy. Commercial satellite services increased by 8 percent, reaching an estimated market value of $90.58 billion during 2009 and representing 35 percent of the space economy. Space infrastructure, which comprises spacecraft manufacturing, launch services, in-space platforms, and ground equipment, constitutes the second-largest segment, accounting for $83.63 billion, or 32 percent of the total market value.
Government space budgets increased considerably from 2008, demonstrating an aggregate growth rate of 16 percent. During 2009, governments spent an estimated $86.17 billion, accounting for 33 percent of the space economy. Excluding stimulus funding, U.S. government spending on space totaled $63.19 billion during 2009, a 9 percent increase over the $57.98 billion budget for 2008. An additional $1.23 billion of stimulus spending targeted space activities, which increased 2009 spending by 11 percent over 2008 budget figures. International government budgets that were counted in both 2008 and 2009 increased by 22 percent to reach $19.97 billion. With the addition of international budgets that are counted for the first time this year, this total becomes $21.75 billion.
Meanwhile, two smaller market segments also experienced revenue growth in 2009. Infrastructure support industries and space commercial transportation services were valued at $1.15 billion and $80 million, respectively. With growth in both the commercial sector and government spending, 2009 financial data highlights the merits of investing in space and its future prospects for generating value.
Government spending led growth as emerging space nations sought to develop their programs, and traditional space powers maintained or increased their overall spending levels. While each nation has its own reasons for participating, space is attracting increasing attention from a larger number of countries. This has resulted in higher spending on military space applications and dual-use programs, as well as offensive and defensive capabilities. Military activity in outer space has recently received increased attention but the heart of the space industry remains satellite telecommunications.
Commercial satellite services, which generate revenue from telecommunications, Earth observation, and positioning services, remain the largest driver of space-based revenue. There is increasing interest in imagery applications, 3D content for television, Internet access via satellite, hybrid satellite-terrestrial communications, and expanding access to satellite radio. The benefits of these services will spur growth in the space industry and generate ancillary benefits for society and the economy.
Internet access via satellite, for example, will eventually bring the information age to every corner of the planet, dramatically improving the economies of rural areas, underserved communities, and developing nations. Ever-present broadband Internet access may impact patterns of urbanization, the provision of government services, models of education, and the organization and productivity of businesses. Each specific telecommunications service will likely have a different business model, growth path, and degree of geographic success. The variety of emerging applications highlights the health of the industry, its market stability, and its ability to drive future revenue and economic expansion.
This healthy marketplace is also demonstrated in the Space Foundation Indexes. After falling with the rest of the stock market in the recession of 2008, the Space Foundation Indexes began a strong recovery in 2009 with gains ranging from 14 percent to 56 percent for the year. The Indexes track the breadth and depth of the overall space industry as well as space infrastructure and services segments in U.S. public markets. In another promising sign of resilience in the space markets, two private space companies went public. DigitalGlobe had an initial public offering and Iridium Communications went public by virtue of its purchase by GHL Acquisition. Mergers and acquisitions activity in 2009 also increased over the previous year, registering a high volume of small but important transactions.
The manufacture and launch of satellites during 2009 represents a dynamic level of space activity not seen since the turn of the millennium. During the year, there were 78 orbital launches compared to 69 in 2008, continuing a four-year trend of growth. Several countries demonstrated first-time launch capabilities. Iran successfully launched its first satellite and both South and North Korea made orbital launch attempts. Other countries, such as Brazil, are working to develop new launch platforms. Entrepreneurs are testing human-rated suborbital systems and several space companies are developing new launch vehicles that may dramatically reduce the cost of accessing space.
There was a dramatic change in U.S. space policy and investment that may significantly impact the development of new commercial orbital and suborbital vehicles. The Presidents fiscal year (FY) 2011 budget proposal discontinued funding for the Constellation program, altering the plan for NASAs activities in the coming years. The budget provides NASA with an additional $6 billion in funding over the course of five years, distributed among existing programs and new efforts. The three new major areas of funding in the five-year budget proposal include a technology demonstration program totaling $7.8 billion, heavy-lift and propulsion research and development of $3.1 billion, and robotic precursor missions of $3 billion. By extending the lifespan of the International Space Station and using commercial transportation services, NASAs strategy should also stimulate private launch companies, indirectly support growth in the commercial human spaceflight business, and provide seed money for in-orbit systems such as fuel depots.
Despite the passionate responses to NASAs new direction, both in favor and against, most space activity remains focused on satellite communications. With more than 900 active satellites in orbit in 2009 providing a wide range of applications, commercial communications satellite providers have enjoyed success in recent years thanks to increased demand for HDTV, satellite Internet, and military usage of commercial satellite communications. In fact, telecommunications satellites represent more than 45 percent of all satellites. Satellite-based positioning, navigation, and timing systems are another field of intense interest. Several countries, including Russia, China, and Europe, are developing and expanding systems similar to the existing U.S. Global Positioning System. With ambitious government programs underway, strong demand for satellite services, and increased reliance on commercial providers for space station supply activity, the outlook for space manufacturers and launch providers looks brighter than ever.
Economic Impacts, Workforce + Education
Space activity provides tangible benefits for professionals around the world, creating high-paying jobs that have positive direct and indirect effects on local, regional, and national economies. In the United States, more than 260,000 people worked in the space sector in 2008, earning an average of $90,000 per year. The five highest-paying states for space employees were Colorado, Maryland, Massachusetts, Virginia, and California. Space workers in all five of these states earned an average of more than $100,000 per year in 2008. Five high-paying metropolitan regions for space employees are centered around Boston, Dallas/Fort Worth, Denver, Los Angeles/Long Beach, and San Jose/Sunnyvale. Space workers in these metro areas earned average salaries ranging from $100,000 to $110,000 per year in 2008. The recession showed only limited impact on the U.S. space industry between 2007 and 2008, with net job losses in the low hundreds, and a small decline in wages when adjusted for inflation. This is likely to change if NASA concludes Space Shuttle flights as planned in 2010 and if funding for the Constellation program is discontinued as outlined in the Presidents budget. At the end of 2009, there were approximately 4,200 civil servants and 20,000 contractors working on the Shuttle and Constellation programs.
The Space Report 2010 also contains new information on military space professionals and their training. The U.S. military is developing a formal space workforce program tying mission requirements to training and certification that crosses all services, including active duty, guard, and reserve personnel, and its civilian workforce. Today, the U.S. military has nearly 14,500 positions for military space professionals, designated by their training, skill, military rank, and service requirements. In the future, other militaries may look to the United States as a benchmark for similar national military space training programs.
Also new in The Space Report 2010 is employment data for Europe and Japan. In 2008, European nations employed 30,300 people in space jobs, the highest level of European space employment since 2001. Japan employed approximately 6,250 space workers in 2008, slightly more than the low point for the decade in 2003, when there were 5,840 employees. Each country classifies space employment differently, making direct country-to-country comparisons difficult. Regardless of how they are counted, the high value of space jobs encourages national and private-sector investment in education to develop a technically skilled workforce. These talent pools, in turn, continue to reinvest in themselves through ongoing training programs and promotion of further educational investments.
Traditional space educational models, such as national aerospace academies geared toward honing specific skills, may well be changing. Substantial interest is being shown toward interdisciplinary, international, and intercultural approaches to space education through programs such as the International Space University and the United Nations Space Education Program. In the United States, a number of aerospace charter schools have emerged, such as the Jack Swigert Aerospace Academy, created by a partnership between the Space Foundation and Colorado Springs School District 11 to offer pre-collegiate interdisciplinary aerospace education.
As the second half century of the space age gets under way, the future of global space activities looks as diverse as it does bright. This generation of space activity will solidify the role of commercial space while expanding the global reach of the industry. More nations than ever realize the strategic and economic value of space, leading to the creation of new international organizations, national space agencies, and investment in an ever-broader set of programs.
Nations will need to decide to place more or less emphasis and reliance on traditional military and civil space programs in favor of leveraging international, regional, interagency, and commercial capabilities. The growing number of spacefaring states working cooperatively and competitively, coupled with the rapid development of capabilities, creates an environment in which innovation can flourish and be rewarded.
The rising tempo of space activity has brought greater awareness that orbital space is getting crowded. Driven in part by concerns of orbital debris, governments and commercial operators are increasingly looking for global solutions through international collaboration. Existing relationships in the fields of disaster management, emergency response, and Earth observation have led to cooperative agreements for space situational awareness. It is advantageous for everyone who relies on space to prevent collisions by improving monitoring and predictive capabilities.
Human space exploration appears likely to occupy a less prominent role in national space programs in the next few years, but this shift is being offset to some extent by greater activity and focus on entrepreneurial opportunities, Earth sciences, and Earth-oriented commercial capabilities. In addition, the importance of military space will continue to grow as more countries develop offensive and defensive space systems. Military space in the United States will increasingly rely on interagency coordination, hosted payloads, and commercial sourcing of communications, imaging, and other services.
Assuming governments change their means of operating, businesses will adapt by creating new models that will change the underlying industry economics. The result, as in the case of military space, will be public-private partnerships and increased reliance on commercial services. Pure commercial space activity, as opposed to government-supported commercial space activity, will continue to broaden and grow. Most space activity remains tied to terrestrial business, but the variety and number of activities will likely grow, as space products and services are integrated deeply into consumer electronics and daily necessities.
Meanwhile, commercial human spaceflight is poised to emerge as a viable industry in the next few years. Initial success will lead to new services, markets, routes, missions, and possibly lower prices. Failure of commercial spaceflight to develop could stymie orbital services that depend on economies of scale. Governments will likely need to regulate commerce, travel, and military and diplomatic national interests in space. Collectively, this will increase the importance of international and multilateral cooperation between governments, and underline globalization and international strategic business planning for commercial space companies. Whether space is used to greater effect by governments or commercial interests, it is a common domain shared by all who operate in space and it is in the collective interest to preserve the space environment both now and in the future.
The Space Report 2010 Data
The Space Report 2010 is the result of extensive research by the Space Foundation and an array of independent research organizations and individuals with expertise in space, policy, financial markets, science, education, and technology. This combined effort involves identifying, gathering, analyzing, and synthesizing publicly available sources including government and corporate reports, congressional records, and data provided by trade associations and private research firms. The report also draws upon articles in news, business, and industry publications. Illuminating the text of The Space Report 2010 are scores of exhibits tracking industry sector activity, major sources of industry revenue, trends in education and training, employment, government investment in space, and market performance of space industries.
About The Space Foundation
In 1983, a small group of visionary leaders in Colorado Springs saw a need to establish an organization that could, in a non-partisan, objective and fair manner, bring together the various sectors of Americas developing space community and serve as a credible source of information for a broad audience from space professionals to the general public. The Space Foundation was founded in March 21, 1983, as an IRS 501 (c)(3) organization to foster, develop and promote, among the citizens of the United States of America and among other people of the world ... a greater understanding and awareness ... of the practical and theoretical utilization of space ... for the benefit of civilization and the fostering of peaceful and prosperous world. The Space Foundation embraces all facets of space commercial (including telecommunications and other satellite-based services), civil, and national security. In fact, the Foundation is one of few space-related organizations that embraces the totality of this community rather than focusing on a narrowly defined niche. In the 27 years since its founding, the Space Foundation has become one of the worlds premier nonprofit organizations supporting space activities, space professionals and education. The Foundations education programs have touched teachers in all 50 U.S. states and Germany. It conducts the premier event for space professionals anywhere in the world today: the National Space Symposium. More information is available at... http://www.spacefoundation.org/
To order the report... http://www.thespacereport.org