Global space economy offers big growth potential prospects

The global space economy has great potential in terms of economic prospects, with the sector going past the half-a-trillion-dollars mark in 2022, only a few decades after the term “space economy” came into existence.

Several studies by specialised global institutions indicate that the global space sector will be worth over $1 trillion in the next few years. In its Space Report, the Space Foundation, a nonprofit advocate organisation offering a gateway to education, information and collaboration for space exploration and space-inspired industries that define the global space ecosystem, said that the space economy grew 8 per cent in 2022, with its value totalling $546 billion, and is projected to grow by 41 per cent in the next five years.

“The Space Report forecasts continued growth in the space economy, and based on our conservative modeling, we anticipate nearing the $800 billion mark within five years,” said Thomas Dorame, Senior Vice President at Space Foundation. “This forecast is bolstered by the increase in 2023 space launch activity, which is well on pace to surpass the annual record set in 2022.” These findings are further backed by other studies published by major global institutions, such as BWC, Bank of America and McKinsey & Company.

In the 1960s, space exploration was limited to the world’s two superpowers, however, nowadays there are over 90 countries taking strides in this field. This increased interest in space exploration is driven by the rising awareness of the importance of the sector, and the rapid advancements in the field, which made space missions easier and less costly.

Despite inflation and other factors, the space economy grew from a revised estimate of $505 billion in 2021. The Space Report examined spending by 51 governments worldwide based on actual, not projected, budgets and evaluated 11 subsectors of the commercial space industry to ascertain the global value of the space economy, which has grown by $260 billion (91%) in the past decade.

“The Space Report forecasts continued growth in the space economy, and based on our conservative modeling, we anticipate nearing the $800 billion mark within five years,” said Thomas Dorame, senior vice president at Space Foundation. “This forecast is bolstered by the increase in 2023 space launch activity, which is well on pace to surpass the annual record set in 2022.”

Commercial revenue constitutes 78% of the total space economy, consistent with previous years.

The continued vitality of the global space economy was driven by $427.6 billion in revenue for commercial space ventures. Some of the fastest growth came in the communications sector, which saw rising demand for satellite broadband services. This sector grew to $28 billion from $24 billion in 2021, an increase of more than 17%. Satellite manufacturing for the commercial sector also boomed with a 35% increase in satellites sent to orbit from 2021 to 2022.

Increased government space spending across the globe tracked with the wider revenue gains. Governments spent an additional $9 billion on space, raising the percentage of defense spending in government budgets to 45% in 2022 compared to 41% in 2021. Much of that increase came as the United States increased its budgets for civil and military space programs to $69.5 billion, accounting for nearly 60% of global government space spespending.