Space is booming. Here's how to embrace the $1.8 trillion opportunity

Space is approaching a new frontier. The space economy is expected to be worth $1.8 trillion by 2035 as satellite and rocket-enabled technologies become increasingly prevalent, according to a new report.

Already, space-enabled technologies drive everything from weather forecasts to the increasingly ubiquitous smart gadgets such as smart watchs. Yet space technologies are also delivering benefits to a wider range of stakeholders, with industries such as retail, consumer goods and lifestyle; food and beverages; supply chains and transport; and disaster mitigation all set to benefit from space innovations.

“Space technologies are delivering greater value to a more diverse set of stakeholders than ever before,” said Sebastian Buckup, Member of the Executive Committee, World Economic Forum. “As costs reduce and accessibility rises, these technologies could reshape whole industries, and have as much impact on business and society as smartphones or cloud computing.”

A new report from the World Economic Forum, Space: The $1.8 Trillion Opportunity for Global Economic Growth, developed in collaboration with McKinsey & Company, outlines key developments that will shape space and adjacent industries throughout the next decade.

The report brings together experts from across space and other industries to provide the most detailed picture yet of both space technology’s future trajectory and how it will impact other sectors, often indirectly, through rapidly improving and expanding technological capabilities.

Here’s what to know about the future of space until 2035.

By 2035, the space economy is set to reach $1.8 trillion, up from $630 billion in 2023 and averaging a growth rate of 9% per annum – a figure significantly above the growth rate of global GDP. Space-based and/or enabled technologies such communications; positioning, navigation and timing; and Earth observation services are expected to be the key drivers of this growth.

The share of the total space economy captured by traditional hardware and service providers will slowly decrease to the benefit of other services such as ride hailing apps, whose products rely on space-enabled technology such as satellites.

Five sectors – supply chain and transport; food and beverage; state-sponsored defence; retail, consumer and lifestyle; and digital communications – are forecast to generate 60% of the global space economy by 2035, although others will also benefit.

Space will play an increasingly vital role in mitigating world challenges, ranging from disaster warning and climate monitoring, to improved humanitarian response and more widespread prosperity.

A decrease in launch costs and ongoing commercial innovation means more can be done in space than ever before.

The number of satellites launched per year, for example, has grown at a rate of 50%, while launch costs have fallen 10-fold over the last 20 years – with lower costs enabling more launches. The price of data, which is key to connectivity, has also dropped – a trend that is set to continue broadly across different sectors. Moreover, as mega-rocket technology becomes ubiquitous by the early-mid 30s, more opportunities will open for what can be placed in orbit and at what price.

In addition, a broader set of investors – including state and non-state actors – are investing in space, with investments reaching all-times highs of more than $70 billion invested in 2021 and 2022.

Meanwhile, applications like space tourism are no longer in the realms of science fiction. The market is expected to be capped at around $4-6 billion to 2035, with most revenues coming from in-orbit stays aboard space stations by ultra-high-net-worth individuals.

"The key enabler for the advancement of civilization is synergy between a supportive space policy framework, pioneering business models and the development of a vibrant space economy," said Michael Suffredini, CEO of Axiom Space. "The future of space is not just about the destinations we build but about the economic ecosystems we create along the way."

The report also notes that the reach of space technology is only going to increase by 2035 and could revolutionize the global economy. Supply chain and transport will benefit from more efficient and cost-effective logistics, for example, while food and beverage will see better efficiency in last-mile delivery of perishable goods.

Moreover, the report predicts that adjacent industries such as agriculture, information technology, insurance and construction all stand to benefit from the multi-billion dollar revenue, cost efficiencies and environmental benefits offered by space-enabled technologies.

“For decades, Earth observation (EO) satellites were a critical, but narrowly used tool," said Agnieszka Lukaszczyk, VP Government Affairs, EMEA, Planet Labs. "Now, the cloud computing, data and AI revolutions are enabling EO data to be routinely used in countless day-to-day decisions, in areas ranging from agriculture to ESG reporting.”

Space has the potential to help the world solve some of its greatest challenges ranging from the impacts of the climate crisis to economic disparity.

Space technology, for example, already plays a vital role in disaster warning and management. This is expected to increase multifold with improved monitoring of climate disasters, increased access to resilient communication networks and optimized tracking through satellite positioning data.

Space technology can also support efforts to mitigate climate change through innovations like the monitoring of methane leaks from ageing industrial infrastructure, among other uses.

There will be socioeconomic benefits, too. Space is set to play a pivotal role in addressing inequality by improving access to education and economic activity, through bridging digital divides, widening access to education and healthcare, and enabling precise monitoring of agriculture, natural resources and environmental changes.

Looking to the future, the report notes that every sector can be a driver of the space economy.

“Businesses in a growing variety of sectors – such as agriculture, construction, insurance, climate change mitigation – can and will all be drivers of the new and expanding space economy,” said Ryan Brukardt, Senior Partner, McKinsey & Company. “By understanding and embracing the full potential of space, public and private industry players can position themselves as leaders in the space economy, unlocking long-term benefits.”

While the report forecasts the global space economy to reach $1.8 trillion by 2035, an upside estimate of $2.3 trillion could be in play based on improved access to data and reduced costs of space entry.

Conversely, if there is stalled access to space and significant Earth-based technological advancements, instead of those in space, the report forecasts a downside estimate of $1.4 trillion.

Either way, by understanding and embracing the potential for space, public and private players alike will be well placed to help unlock its myriad of potential applications – for the benefit of everyone.