The final frontier: building an economy in space

How low-flying satellites are sowing the seeds of a thriving space economy

Recently, stargazers have noticed strings of white lights, dozens long, moving through the darkness. They do not resemble meteors or aeroplanes. Nor are they, as some have reasoned, convoys of visiting aliens. They are Starlink satellites, sent into orbit by SpaceX, an American company owned by the billionaire Elon Musk, and they are a key component of the so-called low orbit economy

Since its first launch in 2019, SpaceX has cast over 1,000 satellites into space, with the intention of beaming the Internet back to Earth. New batches of 60 are added to its constellation every couple of weeks. That is nothing compared with what Musk has planned. In years to come, he hopes to have 42,000 Starlinks – about 13 times the number of working satellites in space today.

Musk’s idea is nothing new; satellite Internet has existed for decades. But the old offerings were slow and costly, relying on truck-sized satellites floating about 22,000 miles above the Earth. The versions launched by SpaceX and competitors such as OneWeb sit much closer, in low Earth orbit (LEO), which reaches a couple of hundred miles into space.

“These satellites are much smaller, much cheaper and much more powerful” than their predecessors, explains Troy McCann, founder of Moonshot, an Australian space tech incubator. The hope is that they could bring cheap, fast internet to parts of the world that are still unconnected. Musk is already trialling his technology on potential customers. OneWeb says it will launch its services by mid-2022.

New technologies and falling costs are powering a thriving economy in these near reaches of space. “In the past, a typical satellite cost USD1bn,” says Will Marshall, a former NASA engineer and co-founder of Planet Labs, a Californian company whose constellation of 200 satellites observes goings-on down on Earth. Its smaller models “are able to do most of what they did for 1,000 times less than that”. There has been no bigger disruption, he thinks, since mainframe computers were replaced with desktops.

Meanwhile, sending things into orbit is getting cheaper. Rockets have always been dizzyingly expensive, partly because they are used just once: after launching their cargo, they fall back down to Earth and are destroyed in the process. But groups such as SpaceX and Rocket Lab, a launch startup, are pioneering reusable models. In just one year, that has resulted in a five-fold reduction in the price Planet Labs pays to launch its satellites, according to Dr Marshall.

Earth observation is another fast-growing part of the LEO economy, promising to change life below. Planet Labs’ satellites can scan and photograph every inch of the Earth’s surface in 24 hours. Other operators, such as Spire, listen rather than look, collecting radio signals to follow ships, planes and the weather. Their constantly updated datasets are as useful to companies as to defence departments. Big farming businesses use Planet Labs’ satellites to monitor their crop yields. Elsewhere, investors have been searching through satellite images to spot investment opportunities, such as predicting quarterly earnings based on car parking space at retail outlets. Hedge funds use them to track oil inventories and judge the economic damage caused by lockdowns.

Another hope is that low-flying satellites could help to create more sustainable economies. Planet Labs’ imagery is used to monitor illegal logging in dozens of countries. In Afghanistan, its satellites track illicit mining and watch for oncoming floods. “When a lot of people think of space, they think of science and astronauts and missions to Mars,” says Dr Marshall. “They don’t really get how much it is connected with life here on Earth.”

Economic drive

This new era of space development is different to the last because it is spurred by market forces, rather than political ambition. “The thing that drove us to the Moon was politics and what I call the ‘ego of nations’,” says Moonshot’s McCann. “There wasn’t really an economic reason to get there. That’s the biggest reason that we didn’t stay: once the US had done it, that was that. This time, it is economics which is driving it.”

In the nine years from 2010, space economy revenues grew by 70 per cent to US424bn.1 By 2030 the industry could be worth USD1.4trn, according to Bank of America. Matthew Weinzierl, an economist at Harvard Business School, estimates that 95 per cent of that business will come from what he calls “space-for-Earth” applications, in other words, “satellites, especially in low Earth orbit, doing things for us, whether that's GPS, telecoms or Earth observation”.

Yet the ambitions of space entrepreneurs do not stop there. Virgin Galactic and Blue Origin, the rocketry firms of billionaires Richard Branson and Jeff Bezos, are on the brink of sending their first paying passengers on sub-orbital trips. Axiom Space, a Texas-based startup, is planning to propel a private crew to the International Space Station, in a SpaceX capsule, at a fee of USD55m each. Yusaku Maezawa, a Japanese fashion tycoon, has signed up for SpaceX’s maiden tourist flight around the Moon. It is scheduled for 2023.

Taking out the trash

All of this raises questions about overcrowding. Space is teeming with satellites and bits of junk from past missions. Millions of pieces of debris are suspended in LEO, making collisions increasingly likely. Rocket Lab says that it is already difficult to chart a clear path for its launches — and that is before thousands more satellites are launched.

There are ways to prevent the creation of more orbital detritus. “The solution right now is that any new satellites are required to pull themselves out of orbit when the time comes, so they don’t cause more problems,” says Professor Weinzierl. Those in LEO can be lowered back into the Earth’s atmosphere, where they burn up, rather than being cast adrift.

But in the long run, other answers will be needed. Some startups are trying to pull down the biggest bits of scrap. Others want to refuel ageing satellites to extend their working lives. McCann is hopeful about their prospects. “Debris is a big challenge which we need to act on, but there are a whole range of really exciting solutions coming out,” he argues.

Another problem is regulation. The main international treaty governing space is more than half a century old and sets it aside “for all mankind”. This leaves it to individual countries to regulate their companies. Each nation is theoretically responsible for cleaning up its junk, but in practice there is not much accountability, according to Professor Weinzierl. That will have to change if the low-orbit economy is to thrive.

“The biggest challenge is that countries intentionally blow up satellites,” casting new shrapnel into orbit, argues Dr Marshall. China  and India have shot down their own satellites in missile tests, and Russia has been trialling anti-satellite weapons. Such actions need to be addressed before governments think about harder questions, such as who has rights to mine the Moon or asteroids.

Failures will be inevitable. In 2020, OneWeb was rescued from bankruptcy by the UK government and India’s Bharti Global. Some analysts question whether satellite Internet will be needed at all, given that there are so many terrestrial alternatives. Perhaps space travel will only ever be available to the uber-rich. “But even if visions of the space economy are only partially realised, the implications would be enormous,” says Professor Weinzierl. Just how big, we are only beginning to grasp.