The annual Space Symposium in Colorado Springs is arguably the world’s premier gathering of space professionals from government, military, industry and media. As this year’s 39th edition kicks off today, a special report by the World Economic Forum with the McKinsey consultancy highlights the stellar growth of a technology sector which increasingly impacts most aspects of modern life.
According to WEF/McKinsey, the space economy is forecast to soar in value, to $1.8 trillion by 2035 in an increasingly connected and mobile world, impacting and creating value for nearly all industries on Earth and providing solutions to many pressing problems. That’s up from $630 billion in 2023 and growing at an average of 9% per annum – well above the growth rate of global gross domestic product (GDP). This growth will largely be built upon space-based and/or enabled technologies such as communications; positioning, navigation and timing; and Earth observation.
And, the report finds that space’s impact will increasingly go beyond space itself. In fact, the share of the total space economy captured by incumbent space hardware and service providers will gradually decrease to the benefit of non-traditional players such as ride-hailing apps, which would never have reached the global scale they have without satellite-based technology connecting drivers and riders and providing navigation services.
Five industries – supply chain and transportation; food and beverage; state-sponsored defence; retail, consumer goods and lifestyle; and digital communications – will generate more than 60% of the increase in the space economy by 2035.
Significantly, concludes WEF/McKinsey, space’s return on investment will be more than financial. Beyond revenue generation, space will play an increasingly crucial role in mitigating world challenges, ranging from disaster warning and climate monitoring, to improved humanitarian response and more widespread prosperity.
Collaboration between public and private players will be key to ensure that space capabilities reach this potential.
Key drivers
Space is set to undergo a major transformation over the next decade. Public sector investments continue to broaden, with countries such as Japan, Peru, Saudi Arabia and Thailand all investing in space initiatives. Private sector space investments continue to drive innovation and access in areas such as in-orbit inspection, maintenance services and commercially funded space stations.
Critically, launch costs have fallen 10-fold over the last 20 years – and lower costs enable more launches. The number of satellites launched per year has grown at a cumulative annual rate of above 50% from 2019 to 2023.
According to Alizée Acket-Goemaere, a consultant in McKinsey’s Paris office and an author or the report: “The next generation is under high competition with Blue Origin’s New Glenn, ULA’s Vulcan and Arianespace’s Ariane 6 all due to complete their maiden launch in 2024. As they ramp up to full capacity, what we will see is a shift from a supply-constrained market in the mid-20s to a demand-capped one in the early-30s. This will completely change the competitive dynamic – especially if a super-heavy launcher the size of [SpaceX] Starship cuts the launch costs by 10.”
Meanwhile, commercial innovation makes it possible to do even more in space with ever-smaller satellites. Space-based Earth observation, for example, now comes at a more affordable price.
And, private sector investment reached all-time highs of more than $70 billion in 2021 and 2022.
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