In a recently published report, Citigroup analysts have projected that the space industry will reach $1 trillion in annual revenue by 2040.
The report suggests that as space becomes more affordable, it will lead to innovations in other fields. For example, satellite broadband and manufacturing services could be enhanced.
The global space industry has seen impressive growth of 70% since 2010. The report released by Citigroup agrees with the forecasts made by the Bank of America, and Morgan Stanley, among others. In 2020 alone, the global space economy was valued at $424 billion.
“Revenue from manufacturing, launch services and ground equipment will make up the majority of the revenue growth in the satellite sector,” Citi said. “However, the fastest growth rate is expected to come from new space applications and industries, with revenue forecast to rise from zero to $101 billion over the period.”
The private investment in space-related industries reached a new high in 2021, with $14.5 billion going to 1,700 companies tracked by Space Capital.
While the industry is booming, companies should also work with other concepts like space-based solar power, moon/asteroid mining, space logistics/cargo, space tourism, intercity rocket travel, and microgravity R&D and construction.”
According to the analysts, “A similar analogy would be attempting to forecast the value of the internet today versus nearly 20 years ago when the term ‘smartphone’ was relatively unknown and before broadband replaced dial-up internet connections,” the analysts said.
“Lower launch costs were pioneered by SpaceX with the launch of Falcon 9 in 2010,” Citi said.
Citi further explained, “Fundamentally, with the new generation of space being driven by the commercial sector, the launch industry is seeing a secular shift from being largely cost-plus pricing-based to being value-based in order to open up new markets and maximize profitability.” They added that “Previously, the launch market had a limited number of government-supported companies that were concerned more with military capability and creating revenue and jobs than with increasing operational efficiency.”
The cost of launching a rocket has been declining for years, but according to Citi, this is because reusing boosters are now common practice in the industry.
Citi is rightfully concerned about the difficulties of expansion, even amid more accessible resources for space flight. They have mentioned that it’s not easy even if there are some reducing costs – the are other things to consider like space environment, capital expenses, and returns.
Finally, public perception of space should be changed. The paradigm shift should emphasize that space exploration is not exclusive to the billionaires as a ‘hobby’ but an important factor for our survival. According to Citi, the space industry “needs to gain public acceptance before it can be adopted across various industries.”
Opinions expressed by Texas Today contributors are their own.