 | | | |
ON THE SPACE ECONOMY
The space economy is increasingly becoming relevant to a range of people and industries
| | | | | | | | | | | |
| The space economy is at an inflection point. I see a parallel to the internet: years ago, the world was introduced to this computer network, and few people could conceive of its potential. Then, at some point, businesses started to ask, “What could we do with this? How could it solve our problems?” Today, of course, consumers and businesses the world over interact with the internet constantly. I think we’re in a similar place now with space.
What’s changed? For one thing, launch costs have come down. This has allowed more nations to participate in the space economy. It also means the market is poised for growth. McKinsey estimates the market is going to triple, to $1.8 trillion in 2035, from $630 billion in 2023. This figure includes “backbone” applications, such as satellites, launchers, and other infrastructure, which could grow about 7 percent to reach $1 trillion, as well as “reach” applications, which could grow about 11 percent to reach $800 billion.
Most people may not realize how much of their daily routines are supported by these reach applications of space infrastructure. Anyone who has a mobile phone, almost anywhere in the world, uses space. Ridesharing and food delivery services would not exist without space technologies. And every ATM throughout the world relies on global-positioning satellites to keep time.
Space is also increasingly used for internet services. In many countries, a customer has long been able to call an internet provider that shows up the next day and sets up the service. But in places that don’t have this infrastructure, getting internet service has historically been expensive and slow—and, in some cases, impossible. Thanks to the space economy, many of these consumers can now access high-bandwidth and low-latency internet delivered via satellite.
These applications for space technologies are already here today, and in developed nations, they’re often taken for granted. But in other places, they may be game changing for local economies.
| | |
| | | “We estimate the market is going to triple in value, to $1.8 trillion in 2035, from $630 billion in 2023.” | | | | |
| As an example of how space technologies can affect an industry, a wide variety of agricultural companies are exploring how to use them to address problems. There are satellites today that can take images of the Earth, right? These satellites don’t just record visual imagery; they can also take hyperspectral imagery to reveal the water content in a certain area. This can help a farmer plant crops where they are most likely to flourish. There are also tools that look, from space, at the average color of plants to determine what nutrients or fertilizers they need. Global positioning can help farmers save fuel—a huge expense in agriculture—by helping tractor operators or autonomous machinery navigate.
In terms of risk, space is a wild frontier. Regulation lags behind innovation. There are national-security considerations: this is a domain of potential conflict, and it’s intensifying as more nations operate in space. There is also the question of how to use data responsibly, which is the same problem that has to be solved here on the ground. Another issue is ensuring that space remains open, free, and accessible to all. With an increasing number of nations and actors operating in space, there are challenges arising about how to maintain access for all and perpetuate space as an arena of collaboration. Immediate solutions to many of these problems are not obvious at present.
And yet it’s an exciting time. People say, “I’ve never seen a launch.” And my response to them is, “All you have to do is go to Orlando for more than two days, and you will see one.” These launches are meaningful missions. They’re not just launching billionaires into space.
Companies aren’t interested in doing space just for space’s sake. What’s also quite interesting is showing businesses how space can help solve problems in ways they may not yet understand are possible. That’s why I believe the world is at an inflection point with regard to space.
| | |
| Share Ryan Brukardt’s insights
|
|
|
|
|
| | | | | | | | | | | Margaux Constantin on the state of tourism | | | Leisure travel’s postpandemic recovery demonstrates people’s fundamental desire to roam. Where are today’s travelers going, and what do they want from their journeys? | | | | |
| |
This email contains information about McKinsey’s research, insights, services, or events. By opening our emails or clicking on links, you agree to our use of cookies and web tracking technology. For more information on how we use and protect your information, please review our privacy policy. |
|
You received this email because you subscribed to our McKinsey Quarterly alert list. |
|
|
Copyright © 2024 | McKinsey & Company, 3 World Trade Center, 175 Greenwich Street, New York, NY 10007 |
|
|
|
|
