A new World Economic Forum (WEF) report entitled ‘Space: The $1.8 Trillion Opportunity for Global Economic Growth’ unveils the transformative potential of the global space economy in tackling pressing industry and societal challenges. Predicting a surge in the sector’s valuation to $1.8 trillion by 2035, the report highlights the emergence of space technologies as a present force, rivaling the reach and impact of the semiconductor industry.
Expanding reach of space technologies
As connectivity becomes increasingly vital in a globally connected and mobile world, space technologies will revolutionize industries beyond the confines of space itself. The WEF report, in partnership with McKinsey & Company, states that space technologies will become more about connecting people and goods. Space activities like infrastructure, satellites, launches and explorations will continue to grow significantly. However, space-enabled technologies and business on Earth will grow at a faster rate.
“Space technologies are delivering greater value to a more diverse set of stakeholders than ever before,” said Sebastian Buckup, member of the executive committee, WEF. Buckup highlights the technologies’ impact on several industries, including food and beverage, retail, consumer goods and lifestyle, supply chain and transportation, and climate disaster mitigation.
“These technologies could reshape whole industries, and have as much impact on business and society as smartphones or cloud computing,” he added.
Key findings
The WEF’s insights report highlights four key findings when it comes to the emerging space economy. First, the report expects space to become a key part of the global economy by 2035. With the growing reach of space-based and -enabled technologies, such as communications, positioning, navigation and timing, and Earth observation, the space industry will experience robust growth in the next decade.
The WEF report also reveals that space hardware and service providers will experience a decline in their share of the total space economy. Hence, non-traditional players such as ride-hailing apps will emerge as the main providers of navigation services.
Besides, the WEF’s insights report reveals that the impact of space technologies will extend beyond the space sector. Supply chain and transportation, food and beverage, state-sponsored defense, retail, consumer goods and lifestyle, and digital communications industries will generate more than 60 percent of the growth in the space economy by 2035. Moreover, nine other industries will create opportunities for traditional and non-traditional players alike.
“Businesses in a growing variety of sectors, such as agriculture, construction, insurance, climate change mitigation, can and will all be drivers of the new and expanding space economy,” said Ryan Brukardt, senior partner, McKinsey & Company.
Finally, the report sheds light on the space sector’s return on investment. Beyond revenue generation, space will play a vital role in mitigating worldwide challenges like climate change and disasters through disaster warning and climate monitoring to improve humanitarian response to crises.
Space economy set for transformation
With growing public investment in the space sector, the industry will undergo a major transformation in the next 10 years. Countries like Japan, Peru, Saudi Arabia and Thailand are increasingly focusing on the sector’s growth by funding space initiatives. Moreover, private sector space investments are continuously driving innovation and access in areas such as in-orbit inspection, maintenance services and commercially funded space stations. Meanwhile, non-space private sector partnerships with space players are also expanding.
“By understanding and embracing the full potential of space, public and private industry players can position themselves as leaders in the space economy, unlocking long-term benefits,” Brukardt added.
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Several factors drive the expansion of space technologies into everyday products, including the decrease in launch costs, widespread commercial innovation, diversification of investments and cultural awareness.
The number of satellites launches per year has grown at a cumulative annual rate of over 50 percent from 2019 to 2023. Meanwhile, launch costs have declined 10-fold over the last 20 years. Hence, lower costs enable more launches. Moreover, the price of data, which is essential to connectivity, is also expected to see a 10 percent decline by 2035, as demand increases by 60 percent.
Moreover, investors are more keen than ever on investing in the space sector. Thus, private sector investment reached an all-time high of $70 billion in 2021 and 2022. Furthermore, space activities and applications are becoming more diverse, with activities like space tourism becoming closer to reality than ever.
Finally, the excitement and interest in space is evident all over the world, with government and business leaders increasingly considering what space could enable for the future.
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