One small step for space investment

When John F Kennedy’s goal of landing a man on the moon was achieved in 1969, the dawn of a ‘Space Age’ seemed assured.

Unfortunately, reality failed to live up to expectations. Once it became clear that the Soviet Union wasn’t going to challenge US dominance in human space flight, the sense of urgency that had driven progress in the 1960s evaporated.


Without the political will or financial reward to incentivise new efforts, few dared tackle the challenges of developing rockets and satellites on their own. The space race slowed from a sprint to a stroll and the lack of innovation saw launch costs stagnate at an eye-watering $10,000/kg for the remainder of the 20th century. That’s astounding when you consider how much the rest of the world changed over that same period. Imagine if cars and computers hadn’t improved since the 1970s either.


2001 came and went without a Space Odyssey, but it was significant for space flight in a less obvious way. The emergence of software and ecommerce companies on the US West Coast led to several young entrepreneurs — and life-long science fiction fans — amassing new wealth. Frustrated by the chronic lack of progress in space, they decided to take matters into their own hands.


Amazon’s Jeff Bezos founded Blue Origin, Tesla’s Elon Musk founded SpaceX, and Microsoft’s Paul Allen co-founded Mojave Aerospace Ventures and partnered with Virgin’s Richard Branson.


Despite lofty ambitions, these young companies remained grounded in pragmatism. They recognised that spacecraft had to become genuinely reusable if the space industry was to grow further and become self-sufficient. And so, for the last two decades, they have been investing in the engineering capabilities and infrastructure needed to make this a reality.


Thanks to these efforts, costs have fallen to roughly $1,000/kg today, but there is no intention to stop here. Instead, the pace of innovation is accelerating. Next-generation vehicles are being designed and tested to realise costs as low as $50/kg within the next decade.


This will usher in a host of new commercial applications that, not too long ago, would have been dismissed as science fiction.

Cheap and reusable rockets make space a viable destination for budding adventurers

Most immediately, it’s now practical to build and launch thousands of satellites into orbit each year. SpaceX is leading the charge with a constellation called ‘Starlink’ that will be able to deliver high-speed broadband connections to every corner of the globe. This could help end the digital divide between rural and urban populations, allowing everyone to access important new services such as telemedicine and distance learning.


Other companies such as Spire Global and Iceye are using the same orbital vantage point to collect and analyse a wealth of new data about our planet. Already they’re delivering fresh insights in areas as diverse as weather forecasting, global logistics, crop harvesting, insurance pricing and disaster response.


Space could be an attractive location for high-tech manufacturing as well. Discovering new drug structures, growing organs for transplant, creating advanced materials — all would benefit from the lack of gravity and pristine conditions we spend billions trying to replicate in labs on Earth. Companies like Made in Space have been refining Zero-G 3D printing on the International Space Station since 2014.


Just as new gear and better logistics turned Mt Everest from an untouchable peak into a bucket list item for many; cheap and reusable rockets also make space a viable destination for budding adventurers.


Virgin Galactic will soon start flying tourists into space while NASA is leveraging new commercial capabilities to return to the Moon and venture on to Mars. Further out, space flight may even replace air travel, with spaceplanes capable of whisking passengers into orbit and carrying cargo around the world at hypersonic speeds. Companies such as Reaction Engines in the UK are playing an important role in developing the technology to make this possible.


Despite a tumultuous start to the 2020s, humanity stands poised to extend its reach into the cosmos once more. Enduring success will come, not from giant leaps into the unknown, but from a series of consolidating and commercially relevant steps. This was what the Apollo programme of the 1960s lacked, and what the new era of space progress looks set to bring.


This article first appeared in the FTfm.

Luke Ward

Investment manager

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