I knew very little about the space industry, let alone its economics, before reading the piece that I am going to speak about today. And that’s one reason I enjoyed reading this guest post in Not Boring so much, about the space economy.
The second reason I enjoyed reading this so much is because it is a rare combination of three things: it was in-depth, it was informal and it was informative. That takes skill, and reading it was therefore a pleasure.
I’d strongly urge you to take an hour ot two out of your week to read the whole thing at leisure. What follows are points that interest me, and that I have made notes of – but this is something I really do think you should do for yourself too.
Before we begin, I question that I have thought about after reading this article. What, I asked myself, is the chance that I will get to experience space tourism in my life? The question would have been hilarious in the 1990’s, when I was in school, and while it still seems fanciful right now, I’d go as high as even 10%. And for my daughter during her lifetime, I’d put the chances at above fifty percent. What a time to be alive.
- I’d memorized during my school quizzing days the name of the first dog to go into space (Laika). I learnt while reading this article that Sputnik-2 didn’t have any “Earth return capabilities”, and I felt very sad indeed.
- NASA had a predeccosr called NACA, and responding to the Russian advances in space in the late 1950’s necessitated the formation of a new organization. I found this to be very interesting.
- “Astronauts were living legends and international celebrities. They drove (or, more accurately, raced) Corvettes across town in Houston.” James May had a lovely segment on this in one of the episodes in The Grand Tour. The reverence in his voice as a he drove the very same Corvette that was once owned by Neil Armstrong (I think it was NA’s) was wonderful to behold.
- NASA’s budget in its heyday was 4% of all US federal government spend. It is now at 0.4%.
- COTS, or Commercial Orbits Transportation services, and the incentives offered by that program have resulted in Starliner’s $/kg in 2021 to be about the same as that of Mercury, in 1961!
- I learnt about flippening.
- The value in space exploration is mostly about driving benefits back to earth: GPS, transparency about what is happening back on earth, fighting climate change, and spillovers. Speaking of spillovers, here’s a useful list.
- Turns out you can see cow farts from space!
- The Russo-American conflict has not been good for space exploration, and the Chinese are doing some really advanced stuff. Speaking of which, I also learnt about hypersonic glide vehicles.
- The chart below this paragraph doesn’t show India’s budget separately. I wish this were not so.
- The economics of funding space startups is (surprise, surprise) very different. But that being said, read the section that comes next very carefully, and then take a look at this talk, and this book.
- The launch cost curve is encouraging, as is the satellite cost curve.
- Take a look at the market map below this paragraph to get a sense of the firms working in this (n.p.i) space.
- I had no clue space manufacturing was a thing!
- SpaceX will “not recognize international law” on Mars.
Again, I strongly encourage you to read the whole thing yourself, and take your own notes. If you are a student of finance, for example, the sections on funding, business models and risks deserve a deeper dive.
EconForEverybody 