Abstract
Much has been written about the new space economy. However, until recently the literature remained fragmented across a wide range of academic papers, policy reports, and technical journals and has not adequately raised political economy questions that examine the dynamics of space economy growth and its implications on equity. This “perspective” offers a political economy research agenda by raising questions on the nature of the new space economy and the implications on equity arising from space-related economic activities.
Much has been written about the new space economy. However, the literature remains fragmented across a wide range of academic papers, policy reports, and technical journals (Acta Astronautica, Astropolitics, European Space Policy Institute Public Reports, NASA Tech Briefs, New Space, OECD, Space Policy, to name just a few). Very recently there has been a collective effort that led to The Oxford Handbook of the New Space Economy containing 42 chapters with contributions by 86 different researchers from across the world. 1 Covering mostly thematic topics, the handbook also included several of these themes in country- and region-specific contexts. Salient topics under the rubric of the new space economy included economics, business development, innovation strategies, changing institutional environment and ecosystems, policy choices, and the applications of space technologies to everyday modern life.
Reporting by the media no doubt brought attention to major developments in the space sector. The soaring optimism of the space economy, as reflected in a market forecast of $1.8 trillion by 2035 from $630 billion in 2023, further motivated scholarly and business interests. 2 The multiple, interconnected innovations in electronics, digitalization, telecommunications, manufacturing operations, organizational innovations, and knowledge-based applications using artificial intelligence are expected to drive the civilian space economy to new heights far into the future. But this collective scholarly effort, for reasons of manageability, could not include all the possible analyses that are critical to capture the salient dynamics of the evolving space economy and their societal impact.
The definition of the new space economy remains loose, with multiple definitions adopted by different authors in the Oxford Handbook itself. However, this is not of concern here since this is inevitable in a multidimensional construct of the new space economy. Trying to straightjacket the manifold sectoral dynamics to a singular dimension of “newness” is likely to limit the scope for analyzing the many nuances behind the rise of the new space economy. Admittedly, a major theme that was introduced but not fully developed in the handbook is the political economy implications of distributive justice from an anticipated expansionary space economy. 3 A shared understanding of such a perspective involves capturing the multilayered interactions between the state and market and, by extension, the resulting outcomes that impact societal distribution (equity) of economic activities such as space and the relentless pursuit of growth (expansion) and its implications. Typically, under capitalism the central concern is growth and is assumed to be brought through competitive and efficient markets, while a political economy approach would also investigate who gets what, how much, and why. Given the increasing frequency of objects being launched into space by a number of countries and by private companies, albeit still dominated by the U.S. (83%), 4 it is imperative to chart a political economy research agenda at both national and global levels to ascertain the impact on equity and social well-being.
Taking off from the Oxford Handbook, I identify three interrelated political economy themes for future research.
The first is the nature of the growth and the changing nature of the relationship between public and private actors in the space economy. This development is acknowledged by most observers and, with some caveats, empirically established in the United States and to some extent in the EU and Japan. Many consider this to be the defining feature of the new space economy (or newspace). The second theme relates to the implications of growth of the space economy on society. How might we gain from and assess the benefits of space? For example, the return of “industrial policy” in some form raises questions not just of capabilities but also who would benefit most from space policies: labor, capital, regional economies, local communities, or international partnerships? Given alternative uses of national resources, will investments in space meet the litmus test of social benefits? Furthermore, the differential impacts on wealthy and poor economies (and communities therein) need to be systematically identified not just to ensure that benefits are broadly shared but also to challenge and alter the continuing division of the world into the haves and have-nots. Third, the different types of policies to produce a more socially responsive space economy, especially for the Global South, need to be explored. Many developing countries and many marginalized communities within them are largely outside the orbit of the workings of the space economy. Space technologies could be creatively deployed to benefit the people of these communities, who tend to be poor and illiterate, with limited skills for the modern economy. Could new space technologies be harnessed for improving their lives in a nondisruptive way?
Taking the cue from these three themes, I outline three nonexhaustive lists of questions that suggest a multi-dimensional research agenda for the near future.
Recalibrating public and private sector roles in the space economy.
The institutional reshuffling we now witness is not a fundamental break with the past. Typically, governments have been in charge of space programs everywhere through a dedicated budget, project specifications, ownership, and execution. Private firms, particularly a handful of oligopolistic defense firms in the United States and Europe, have been suppliers to the government. By definition, the government is a monopsonist, or a single buyer, or “the” market. Outside the U.S., the state has been more important as the sole buyer with more or less its own supplier system. Under the new space economy, systematically mapping the shifting form, structure, and the mechanisms for interactions between the state and private business will be an important area for research documentation. The state-business relationship is changing not just in the US but elsewhere as well, including India and China, albeit more gradually than in the United States and EU. What are the economic implications of the different market structures in the different segments of the space economy value chain? Within this evolution, it would be analytically fundamental to identify the internal forces (internal to organizations such as NASA, JAXA, and ISRO, for example) and the external dynamics that are driving the institutional rearrangements. Are cost considerations and efficiency—moving from cost plus to fixed prices, for example—key drivers of this change, or is it being led by innovations? What about technological changes such as increasing launches with reusability brought about by the private sector, such as SpaceX, that lower costs, noting, of course, that it relies on government contracts? Which segments of the space economy value chains—upstream, downstream, or mid-stream—are experiencing visible shifts in the institutional rearrangements, and why?
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How do space economies of other countries (India, China, Korea, Japan, Brazil, South Africa, and Argentina) adjust to new technological developments? How do they build space capabilities? What are the principal entry barriers for state and private players in the contemporary space economy, especially in the different segments of the value chain? Do they pursue autonomous or collaborative technological development? Do policies have a bearing on the shifts in state-business interactions? Who are the beneficiaries of these new partnerships, and in what ways do they benefit? Is there public support for space programs in general and for publicly funded ones specifically? Social implications of different market structures as they evolve from state to increased private sector engagement in different national/regional contexts.
How does society benefit from emerging industry structures of the space economy? Are there distributive implications of monopoly and oligopolistic control? Outside of exploration, science, and the military, do space missions have a social purpose? Do economies of scale justify new market structures with large monopolies, monopsonists, or oligopolies? Is there democratization of space access through different market structures, capital and know-how availability, or do these remain major entry barriers for most developing countries? What are the implications of such market structures and a changing ecosystem for competition, economic fairness, justice, and societal income and wealth distribution? Who are the leading innovating firms? Where does the government fit in the technology effort? What are the policy instruments to support innovations? What are the implications of technology-dominant firms exercising market power on the growth and diversification of the sector? What is the role of industrial policy in the renewed age of economic nationalism? Can the space sector serve social interests such as employment and industrial economic development? What are the defining characteristics of a socially purposeful space sector and the policy tools for intervention to support it? How might space waste and the impact of space debris be mitigated? Who will shoulder the negative fallout of increasing space activity? Should taxpayers shoulder the burden? Social development implications of the space economy in the Global South.
A handful of low-income countries have made significant progress in their space programs. Documenting cross-national comparative experience would add value in understanding the differences and commonalities in space programs and goals, especially social development ones, and accomplishments. Some governments, such as those in India and Brazil, already deploy space technologies for social and economic development (distance education, agricultural training, irrigation mapping, etc.). How have these goals and accomplishments in these countries changed over time, and why? Have they been influenced by “new” space economy dynamics such as institutional rearrangements, new technologies, more international collaborations, or a renewed focus on development? To what extent do space programs offer tangible social benefits rather than prestige value? How do governments in these countries justify space economy spending, assuming governments continue to control national economic resources? Is there an independent growth of a private commercial sector in the space economy? Will other publicly supported “big science” projects be impacted by this development? In addressing the fundamental sustainable development goals for poverty, inequality, education, and health, how could space technologies be mobilized to address these goals?4,6 Economists have utilized remote sensing data to map poverty, urbanization, etc. and propose certain interventions.7–9 What are the complementary policies needed on the ground to match such mapping exercises and produce tangible development benefits? Poor communities in remote (rural) areas could be supported through satellite-based communication services. How will services be provided? What kind of business model is needed? What kinds of international space collaborations can be devised to ensure that remote areas are not excluded? Climate change and associated changes in the geophysical environment are becoming common and widespread. How might space technologies address some of these challenges a priori with available data and mapping through remote sensing? How might these efforts toward solving global problems lead to international collaborations [European Association of Remote Sensing Companies (EARSC)]?
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What are some recent important international collaborations in the broader areas of social development that have produced concrete solutions to mitigating climate change challenges? Are there cost-sharing mechanisms when addressing climate change, given that it is a global issue? There is interest in undertaking space mining to extract valuable resources in outer space. Looking into future, if this materializes, what are the implications of cheaper space resources on raw-material-producing countries in the Global South? Could these countries be part of a global compact formed to protect them from the vulnerabilities of extraterritorial economic forces?
These three sets of questions are indicative of the tension accompanying growth with rising incomes in the midst of worsening inequality at different levels. It could get worse with the impact of artificial intelligence on employment and resource depletion. With states cutting back on social expenditures and a general exhaustion from foreign aid, developing countries (and the poor in wealthy countries) are subject to increasing vulnerability arising from the workings of unfettered commercialization and “monetization of everything.” While the new space economy is only a small fraction of the economy, nevertheless, a political economy perspective around equity and social well-being remains relevant so as to not exacerbate the economic and social divide. A constructive perspective suggests that communities peripheral to the core aspects of the new space economy should be included as potential beneficiaries. A bold research agenda directed at sharing the societal benefits of the new space economy would be critical to ensuring just that.
Footnotes
AUTHOR DISCLOSURE STATEMENT
The author declares that he has no known competing financial interests or personal relationships that could have appeared to influence the work reported in this article. He is solely responsible for its content.
FUNDING INFORMATION
No funding was received for this article.