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SpaceX rockets are used to transport private astronauts to the International Space Station.
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- Author: Jonathan Josephs
- Rolle, business journalist, BBC News
20 minutes ago
The United States is “engaged in a space race with China to return to the moon,” said NASA Director Bill Nelson.
In an interview with the BBC, Mr Nelson said he wanted to make sure “we get there first”.
His words bring back memories of the 1960s and 1970s, when NASA was in a space race with the Soviet Union. But half a century later, NASA is asking private companies to do much of the work.
Mr. Nelson believes these companies are critical because they allow enormous costs to be shared and allow NASA to rely on “the creativity of private sector entrepreneurs.”
He cites the example of Elon Musk’s SpaceX, which won a $3bn (£2.4bn) contract in 2021 to build a lunar lander and also developed the most powerful rocket ever built.
Other private companies are also benefiting from the space race. Earlier this year, the agency signed a $3.4 billion contract with Jeff Bezos’ Blue Origin, also to build a lander, but for later lunar landings.
These are just two companies that benefit from billions of dollars in public funding. That money is being spent, at least in part, to try to stay ahead of China amid much higher tensions between the world’s two largest economies.
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NASA Director Bill Nelson says the United States is vying with China to return to the moon.
In late August, India became the fourth country to achieve a soft landing on the Moon and the first to reach the Moon’s south polar region.
Despite this success, the Chinese space program remains the most closely monitored program by NASA.
China is the only country with its own space station, has already returned lunar samples to Earth and plans to reach the polar regions of the lunar surface.
This worries Mr Nelson: “What worries me is that we find water at the south pole of the moon and China comes there and says it is our region. You can’t come here, it’s ours.”
Nelson says China’s moves to build artificial islands to claim sovereignty over parts of the South China Sea support his concerns.
Mr. Nelson also points out that China has not signed the U.S.-led Artemis Accords, which are intended to serve as a framework for best practices in space and on the moon.
China reiterates its commitment to peaceful space exploration and has previously dismissed U.S. concerns about its space program as a “smear campaign against China’s normal and reasonable space efforts.”
This rivalry leads to huge investments by NASA. According to the agency, its spending contributed $71.2 billion to the U.S. economy in the year ended September 2021, up 10.7% from a year earlier.
While big names like SpaceX might grab headlines, NASA’s spending extends much deeper into the economy.
“A quarter of our spending goes to small businesses,” Nelson says.
That money can accelerate the growth of small businesses, especially startups, says Sinead O’Sullivan, a former NASA engineer and now a space economist at Harvard Business School.
The government often acts as the first customer for startups, and these contracts can allow them to approach private investors and raise even more money, she says.
“We often talk about venture capital and private equity, but governments are just as important, if not more important,” says Ms O’Sullivan.
The race to return to the moon may attract a lot of attention, but it has helped spark an explosion of other space activities that could be far more profitable.
In 1957, Russia became the first country to put a satellite into orbit, while also leading the first space race with the United States. According to the European Space Agency, there are currently just over 10,500 satellites orbiting the Earth.
Chad Andersen, founder of investment firm Space Capital, credits SpaceX with boosting the industry over the last decade.
“The only reason we’re talking about space as an investment category today is because of SpaceX,” he says. “A little over a decade ago, before their first commercial flight, the entire market was actually dominated by the government.”
About half of the satellites currently in orbit were launched in the last three years, according to analytics firm BryceTech.
This is largely thanks to just two companies, One Web and Elon Musk’s Starlink.
“The space economy goes far beyond rockets and satellite hardware. It is the invisible backbone that drives our global economy,” says Anderson.
As the number of satellites in orbit grows, he says more companies are finding new uses for the data they provide, including in agriculture, insurance and the maritime sector.
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RocketLab founder Peter Beck sees a space industry worth hundreds of billions of dollars.
RocketLab, based in New Zealand, is another major player in the space economy.
A competitor to SpaceX, the company has already conducted 40 launches for customers including NASA and other American government agencies.
Its founder, Peter Beck, went from rags to rocket launcher into space and says that’s just the tip of the iceberg when it comes to the financial opportunities that lie beneath. Beyond Earth.
“The launch is about a $10 billion opportunity. Then there’s the infrastructure, like building the satellites, it’s about a $30 billion opportunity. And then there are the applications, and that represents about an $830 billion opportunity.”
He’s not the only one making big claims. The American investment bank Morgan Stanley estimates that the global space industry could reach a volume of more than $1 trillion per year by 2040.
What could be next for private space companies?
Mr. Beck is cautious about the opportunities on the moon, particularly in mining.
“Right now it’s not economically viable to go to the moon, mine it and bring it back to Earth.”
NASA’s Bill Nelson sees opportunities in medical research. He points to useful research on crystal growth conducted on the International Space Station in 2019 by the pharmaceutical company Merck, which helped develop a cancer treatment.
He also claims that optical fibers could be manufactured more efficiently in weightlessness.
“What you will ultimately see is strong commercial activity in low Earth orbit.”