Report: Space Economy worth $1.8tn by 2035
April 11, 2024
By Chris Forrester
In the week that SpaceX has been given a market valuation of some $180 billion (€165.7bn) it is no great surprise that the overall space economy is forecast to triple in value to around $1.8 trillion and growing at twice the rate of global GDP, according to an Insight Report from the World Economic Forum, in partnership with McKinsey.
The rapid growth will be fuelled by lower costs and wider access to space-enabled technologies such as communications, positioning, navigation and timing, and Earth observation services. More than 60 per cent of demand will be driven by supply chain and transportation, food and beverage, defence, retail, consumer goods and lifestyle, and digital communications.
The study finds that in an increasingly connected and mobile world, the space economy’s impact will expand far beyond space itself, becoming more about connecting people and goods. While space activities, such as space infrastructure and satellites, launch and exploration, are predicted to also increase significantly, relative to their levels today, this will be at a slower pace than space-enabled technologies and business on Earth.
“Space technologies are delivering greater value to a more diverse set of stakeholders than ever before, including in industries as varied as food and beverage, retail, consumer goods and lifestyle, supply chain and transportation, and even climate disaster mitigation,” 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.”
“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.”
Space technologies will be increasingly present in every aspect of everyday life, from providing weather forecast data to enabling meal deliveries through ride-hailing apps. This trend will be driven by decreasing launch costs, commercial innovation, as well as diversification of investment and applications.
The report focuses on four main findings:
1. Space will be a key part of the global economy by 2035. The growth of the space industry will largely be built upon the increased reach of space-based and/or -enabled technologies, such as communications, positioning, navigation and timing, and Earth observation.
2. Space’s impact will increasingly go beyond space itself. The share of the total space economy captured by incumbent space hardware and service providers will gradually decrease to the benefit of non-traditional players such as ride-hailing apps, which would never have reached the global scale they have without satellite-based technology connecting drivers and riders and providing navigation services.
3. Space will become more about connecting people and goods. Supply chain and transportation, food and beverage, state-sponsored defence, retail, consumer goods and lifestyle, and digital communications industries will generate more than 60 per cent of the increase in the space economy by 2035. Nine other industries will create opportunities for traditional and non-traditional players alike.
4. Space’s return on investment will be more than financial. Beyond revenue generation, space will play an increasingly crucial role in mitigating world challenges, ranging from disaster warning and climate monitoring to improved humanitarian response and more widespread prosperity.