Space: The Final Economic Frontier?

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MIT SMR Strategy Forum

Each month, we pose a question about business, management, technology, or public policy to our panel of academic experts. Here you can see what they think and why.
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We asked our panel of strategy experts to tell us how strongly they agree with this statement:

In the next decade, we will see the first sustainably profitable private commercial activities in space.
RAW RESPONSES
WEIGHTED BY CONFIDENCE

Raw Responses

Responses weighted by panelists’ level of confidence

For decades, economic activity in space has centered heavily on government-funded endeavors, but as we approach the 50th anniversary of Apollo 11, the shift from public to private is very much alive. Newer entrants such as Blue Origin and SpaceX, along with less flashy but enormously profitable Earth-facing satellite companies, are poised to benefit from new commercial opportunities, with some estimating the space economy to reach $1 trillion by 2040. This month, we asked our panel of strategy experts to evaluate whether the space economy will see a boom of sustainably profitable commercial activity in the next decade, or if this bet on the final frontier is off the mark.

Panelists

Panelist Vote Confidence Comments

Richard Holden

University of New South Wales
Profile
Disagree 7 “Profitability seems pretty far away given the current state of development of the industry. And given the first-mover advantages, I suspect loss-making will be tolerated for a substantial period of time.”

Joshua Gans

University of Toronto
Profile
Agree 7 “The cost of putting objects into space is falling dramatically. When this type of technological change occurs, it spurs entrepreneurial activity. While it is hard to know precisely what type of venture will be profitable, I would be willing to bet there will be at least one by 2030.”

Rebecca Henderson

Harvard University
Profile
Disagree 4 “My thoughts on this question are undoubtedly warped by the fact that given the climate emergency we face, it seems to be close to insane to be even thinking about space, unless it’s by way of a solution. Imagine telling everyone they need to use less carbon, while fossil-fuel-based rockets take off on a regular basis.”

Anita McGahan

University of Toronto
Profile
Disagree 8 “There are already profitable ventures in space (primarily as services to researchers). So I have to disagree with the word ‘first’ in this statement! Scaled ventures in space that are private and commercially accessible to the public are likely not to be profitable for the next 10 years.”

Olav Sorenson

University of California, Los Angeles
Profile
Agree 7 “Early activities will probably center around satellite delivery (and possibly repair).”

Ashish Arora

Duke University
Profile
Neither Agree nor Disagree 5

Petra Moser

New York University
Profile
Disagree 9 “Private commercial activity in space within the next decade? Sure. Sustainably profitable? — 99% no. R&D investments are too high and too risky.”

Richard Florida

University of Toronto
Profile
Strongly Agree 10 “There is already considerable commercial activity in outer space, most notably satellites. NASA has even opened up its space station to private business activity. It’s possible we’ll even see some sort of commercial space flights, even if it’s simple tourist joyrides, in the coming decade.”

Steve Tadelis

University of California, Berkeley
Profile
Disagree 5 “This sounds more like a question for prophets, and I am no prophet. That said, looking at space progress in the past 50 years, I find it very improbable that we will see the first sustainably profitable private commercial activities in space in the next decade or two. Aside from mining, which seems decades away to me, I can’t see an obvious profitable space industry in the near future.”

Bruno Cassiman

KU Leuven
Profile
Agree 8 “Private funding for commercial activities in space is becoming available, and several companies are already involved in commercial space travel. Given the current international environment, it is unlikely that there will be any agreement to regulate the commercialization of space. The next Wild West?”

R. Preston McAfee

Economist
Profile
Strongly Agree 7 “SpaceX’s Starlink is probably already close to profitability. The first profitable private space activities will likely involve Earth communications rather than, say, mining.”

Barry Nalebuff

Yale University
Profile
Neither Agree nor Disagree 5 “I think we will see sustainable private commercial activities in space, but [I] doubt they will be profitable — even though they may have a large market cap. Remember that it took Amazon nine years after being founded [and seven years since going public] before it made a profit.”

Erik Brynjolfsson

Stanford University
Profile
Agree 8 “Virgin Galactic claims $80M in deposits. Blue Origin has a similar program underway. Both aim for service within a few years. Both the supply and the demand for space tourism will be significant within a decade, as costs come down and the ranks of the ultrarich grow. Note: I’m writing this as I use Virgin Atlantic’s Wi-Fi at 35,000 feet over the ocean — there is no great stagnation.”

Yael Hochberg

Rice University
Profile
Strongly Agree 8

John Roberts

Stanford University
Profile
John Roberts 5 “Although private enterprise is asking [for] real strides in space, the technological problems are immense. We are talking about unmanned satellites.”

John Van Reenen

London School of Economics and Political Science
Profile
Neither Agree nor Disagree

Scott Stern

Massachusetts Institute of Technology
Profile
Agree 6 “There is a fledgling investment boom, but the feasibility of space as an industry (beyond telecom and mapping satellites) requires [not only] engineering feasibility but the creation of economic value.”

Shane Greenstein

Harvard University
Profile
Agree 7 “It sure appears as if space tourism — for experiencing weightlessness and for the views — will become a luxury good for some wealthy people.”

Timothy Simcoe

Boston University
Profile
Strongly Agree 8 “I believe OneWeb (and possibly other private satellite networks) stands a reasonable chance of generating sustainable profits.”

Meghan Busse

Northwestern University
Profile
Neither Agree nor Disagree 2 “The bigger question is not whether there can be privately profitable commercial activity in space, but whether sufficiently foresighted policy will exist to keep those activities from creating an orbiting tragedy of the commons. Space junk is already a threat in key orbits, and without effective regulation or cooperation, it is likely to become a bigger problem.”

Kathleen Eisenhardt

Stanford University
Profile
Agree 7 “The technology has already arrived. There is demand — both commercial and civilian. I wish that I could afford the trip!”

Melissa Schilling

New York University
Profile
Strongly Disagree 10 “I disagree with the first part of the statement as there are already dozens of companies profitably and sustainably launching or operating satellites, which is a commercial operation in space.”

Lori Rosenkopf

University of Pennsylvania
Profile
Disagree 5 “Will we see progress and more activity over the next decade? Yes. But ‘sustainable profitable’ requires an ecosystem and massive risk reduction.”

Topics

MIT SMR Strategy Forum

Each month, we pose a question about business, management, technology, or public policy to our panel of academic experts. Here you can see what they think and why.
Learn more about this series

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