Forum for Innovation

“What are we losing by not having a more aggressive space program?” 

That question and others like it have been at the center of a number of debates lately about America’s role in space.  Since the dawn of the space age more than 50 years ago, Americans and Russians have been breaking earthly barriers in ways that have inspired and thrilled people around the world.  Investments by NASA, the US Air Force and other federal government institutions into the aerospace industry have also created new technologies and applications that have also revolutionized the way people live and see the world around them.  We’re not just talking about Tang or Teflon either. 

Computers, communications, medicine, materials processing and more have all developed in revolutionary ways since America jumped head first into the space race following the first beeps of Russia’s Sputnik in 1957. 

Private Sector Opportunity 

The aerospace industry is by far one of the most innovative industries in America and the world, but with budgets becoming increasingly constricted and cutbacks to government space operations taking their toll, these are unsettled times for America’s space program.  Nevertheless, a unique window of opportunity has opened with the private sector emerging as the new means to access space.  

Companies such as SpaceX, Orbital Sciences, Boeing, Sierra Nevada, Blue Origin, and others are stepping forward to demonstrate their know-how and capabilities to boldly venture where only governments have gone before.  With the recent success of Space X’s Dragon capsule and its supply mission to the International Space Station, as well as emerging providers of suborbital travel spurred on by the Ansari X Prize, a new era of space exploration is opening with commercial innovators playing a larger and larger role. 

Commercial ventures in exploration are nothing new to Americans.  We are a nation born of them.  From Columbus’ search for shorter trade routes, to the Virginia Trading Company’s settlement of Jamestown, and the Dutch East India Company’s establishment of what we now call New York, American history is filled with private ventures putting professions, capital, and even lives at risk for unknown opportunities and fortunes. 

Looking at free enterprise and the final frontier, some of the challenges of that legendary era of exploration remain today.  They include:

• Technological development and deployment;
• Availability of skilled talent to develop the market opportunities;
• Access to markets and opportunities;
• Stable investment and capital access; and
• The presence of “unknown-unknowns.”

   

The commercial development of space has been a subject dreamed and debated about even prior to Alan Shepard becoming the first American into space in 1961.  In the years since then, NASA has played the role of both supporter and detractor of commercial efforts and innovations.  With the Space Shuttles now parked in museums instead of launch pads, a new environment has been forced upon the American space frontier. 

Access to Space

Today, NASA has no other immediate means to access a domain it once dominated.  Payload support and resupply to the International Space Station (ISS), not to mention the transportation of American astronauts, is currently not possible using any NASA system.  That fact is forcing dramatic changes in behavior across the board. It is now time for what has long been described as, according to one aerospace leader, “Plan Z.”  All of the other options that the American space agency had for other launch systems went away.  That is, except for private industry. 

While NASA’s ability to access space is not what it once was, demand for space access by others, such as the military, intelligence agencies, telecommunications companies, and geospatial providers remains strong.  Furthermore, new international launch capabilities by China, India, and others are on the rise.  Not content to merely hitch a ride on an American or Russian made rocket, these countries are developing their own launch capacities and aerospace industries and creating competition where it once was only a two country contest.  Today more countries are demanding and developing the capabilities to access space than at any other time. 

In terms of developing the space enterprise and its full commercial development, everything in space remains contingent upon one thing—the success of launch.  If a payload successfully makes it off of the launch pad and into orbit, it’s got a shot at success.  The results are more than obvious if that payload never leaves the pad or does not do what it is intended to do.  

Space access has been the challenge that has humbled governments and now industry players in developing the full potential of this endless frontier.  The costs to access space are tremendous and without a cheaper and more reliable means to access space, the market growth and its diversity of opportunities will remain status quo and limited.   Furthermore, launch technology has not developed as fast as the writers of science fiction fantasy and movie special effects artists would have us believe. 

Fortunately steps in the right direction are taking place.  The approaches offered by SpaceX and its competitors Orbital Sciences, Boeing, ATK, Sierra Nevada, et al, are offering a range of new launch vehicles and options while focusing on the most celebrated and recognized of space customers – NASA.  

The Relationship with NASA

For as much as the industry is looking to satisfy the Agency’s needs, it often finds its customer challenging in many ways.  From a muddled mission to nowhere, fickle and inconsistent cooperation with international and industrial partners; an overly institutionalized bureaucracy; outmoded NASA centers, and ever shifting requirement controls, the Agency that led America into space can often be one of its greatest barriers. 

The industry is in many ways seeking to develop customers and opportunities far beyond NASA to not only improve their profitability but long term survivability as well.  From providing launch services and products to other companies and countries to developing commercial tourism (sub-orbital and orbital flights) opportunities, today’s commercial space pioneers are in many ways seeking the “Killer App” that breaks the market wide open.  

Finding the Killer App 

Most consider that “app” to be associated with improved access to space as it will enable companies like Richard Branson’s Virgin Galactic, Space X, Boeing, Orbital Sciences and others to become the full time space transportation providers that airlines, car companies and other transportation providers are to today’s consumers.  The challenge with that “app,” like the version of “Angry Birds” on your tablet computer or smart phone is that it has to be cheap, reliable and ready to go when you place it in your hands.  If it isn’t, there will be no where to go. 

Today the going rate for a suborbital flight with Virgin Galactic’s space ship is $200,000 per passenger with flight time of just under three hours.  That includes take off and landing from the world’s first commercial spaceport, Spaceport America located outside of Las Cruces, New Mexico. 

For a longer, higher and even more adventurous flight, Space Adventures, Ltd. can take a passenger to the International Space Station aboard a Russian Soyuz capsule for $15 – $20 million.  This includes all of the necessary training in Star City, Russia before any ambitious and qualified space tourist lifts off from the Baikonur Cosmodrone for the most ultimate of getaways. 

With costs such as these, it is no wonder that the commercial space market has had a limited liftoff. 

The State of the Space Industry 

The ambitions and vision of the commercial space developers are truly without limits.  From orbiting inflatable structures that could become everything from research facilities to hotels that Bigelow Aerospace is developing (and already has two prototypes in orbit since 2006) to new next generation space propulsion systems that companies as large as Boeing and Lockheed and as small as garage based engineers are creating, the fervor for space has not ebbed with declines in NASA’s and the overall USG space budget. 

Chart Title: Average U.S. Space Salaries

Courtesy of the Space Foundation; Source: U.S. Bureau of Labor Statistics

In an industry that already does well over $300 billion a year in business and has an average salary between $87,570 – $109,820 (Source: U.S. Bureau of Labor Statistics / The Space Report 2012), it is a community seeking the next big thing, far away from the anchor tenancy of government contracts and seeking unencumbered paths to get there.

In terms of the space workforce, American jobs that contribute to space have shrunk considerably because of the NASA and other USG drawdown, while the space workforces in Europe, Japan and elsewhere are growing. 

Chart Title: U.S. Space Employment

Courtesy of the Space Foundation; Source: U.S. Bureau of Labor Statistics

For all of the self-professed nationalism that exists to put a country’s citizen and flag into space, ambitious pursuits such as space travel and deep space exploration cannot afford a “go it alone” approach technologically or economically. While countries such as Japan, India, Brazil, and others are looking to further develop their own national space programs and capabilities, American industry is finding itself grounded and unable to assist or take part in some of these opportunities because of ITAR and export controls.  

Industry members are also careful to point out that future missions to the Moon, Mars, asteroids and other far off destinations are not capable of being only “Made in the USA” operations.  Cutting edge technologies, hardware, components and workforce come from around the world and will have to be nimble, diverse and competent for any space mission, big or small to succeed.  

Many industry members (large and small) see the existing rules and regulations with ITAR (International Traffic in Arms Regulations) as well as other restrictive export controls measures as preventing greater collaboration between potential international partners.  Globalization was never a consideration during the days of the space race, but times have changed since the Apollo era.  It is now the calling card of business. 

It’s in these turbulent environments that an industry seen by some as fictional, but very much grounded and essential to today’s business, technological and economic realities is fighting for recognition as well as future opportunity.  Unfortunately, as innovative as this economic frontier might be, it still is functioning in an environment with policies, programs and bureaucracies born of the Cold War.  

That’s probably why the success of SpaceX’s Dragon capsule garnered so much media and public attention during its week long mission.  A scrappy start-up funded with private capital (as well as some NASA resources), with some wet behind the ears young people who were not part of the established order of things in the space community took a shot at something that had never been done and succeeded in spectacular fashion.  They are in a sense the NASA of 1962. 

For as impressive as SpaceX may have performed, they have a number of competitors in the wings ready to prove that they, too, have the right stuff in satisfying the demands of accessing space.  Space is no longer just a NASA thing.  It’s a business thing and opportunities in it are real, as are the risks and rewards. 

Real capital, careers, reputations, and opportunities are at risk in many places—these fundamentals of opening any market.  The challenge in making sure that this market can reach its full potential means addressing not just the technological barriers but the ones forged here on Earth that can keep a good thing from getting started.  Once both are addressed, who knows where we might boldly go? Some frontiers are truly limitless and unknown but every great journey and like a marketplace has its start.  This one is just beginning and it’s going to be a helluva ride.