A report by analysts at Citigroup has predicted that the space industry will reach $1 trillion in annual revenue by 2040.
In the report, Citi explains that the cost of accessing space has been declining, and the trend will continue, leading to more opportunities for innovation and expansion. Services related to satellite broadband are also expected to improve as development occurs in the field.
The Citigroup report is in line with other forecasts predicting that the space industry will continue its upward trend. In 2020, the value of the global space economy was worth $424 billion.
“Revenue from manufacturing, launch services and ground equipment will make up the majority of the revenue growth in the satellite sector,” Citi said. “However, the fastest growth rate is expected to come from new space applications and industries, with revenue forecast to rise from zero to $101 billion over the period.”
The private investment in space exploration is reaching new heights. In 2021, it reached $14 billion funneled to over 1,700 companies tracked by Space Capital – breaking its own record every passing year.
While the industry is booming, companies should also work with other concepts like space-based solar power, moon/asteroid mining, space logistics/cargo, space tourism, intercity rocket travel, and microgravity R&D and construction.”
According to the analysts, “A similar analogy would be attempting to forecast the value of the internet today versus nearly 20 years ago when the term ‘smartphone’ was relatively unknown and before broadband replaced dial-up internet connections,” the analysts said.
“Lower launch costs were pioneered by SpaceX with the launch of Falcon 9 in 2010,” Citi said.
According to Citi, “Fundamentally, with the new generation of space being driven by the commercial sector, the launch industry is seeing a secular shift from being largely cost-plus pricing-based to being value-based in order to open up new markets and maximize profitability.” Further, “Previously, the launch market had a limited number of government-supported companies that were concerned more with military capability and creating revenue and jobs than with increasing operational efficiency.”
The cost of launches is on the decline because reusable rockets are becoming more popular. According to Citi, this has been a fact for the industry.
It is important that the industry “needs to gain public acceptance before it can be adopted across various industries.” Citi explained further that the public needs to shift its perception of space exploration as something essential for survival, not something that is exclusive to billionaires.
Opinions expressed by CEO Weekly contributors are their own.