The Growth of the Space Industry

The space industry sits at the center of technological innovation, economic growth and national security. But as activity in orbit continues to expand, so do the opportunities and the challenges facing the sector. So are we still in the early innings of a new space age, or are expectations running ahead of reality? I'm Alison Nathan, and this is Goldman Sachs Exchanges. Joining me today to help unpack all of this are Eric Sparks and Michael Tarulli from Goldman Sachs' Global Banking and Markets Group. Eric is our head of global resilience, leading our coverage of space technology, satellite co

Thank you for having us. Thank you.

Michael, let's just start first with the big picture here. We're obviously seeing tremendous growth in the global space economy right now. So talk to us about what's really driving that interest and that momentum.

The single most important factor is the cost to launch a kilogram into space. So that cost during the height of the space shuttle era was about $55,000 per kilogram. That's down to $3,000 per kilogram today. So it's really democratized space. It's given access to space to almost anyone that has a desire to be in space today. So it's no longer the domain of the richest countries and the largest companies. It's really opened up access. And what that's done is promote a significant amount of development, of investment, and innovation that's just driving a lot of activity and further interest in s

And it's been that innovation that has driven that sharp reduction in cost. Talk to us about what are some of the major innovations we've seen.

The key innovation has really been rocket reusability, and that's what's really brought down the cost of launch. That innovation in and of itself has brought down cost by 95%, and we're not done where we are right now. There is visibility to getting launch costs down to eventually $100 per kilogram. At that level, almost anyone will have access to space.

And when we think about the access, we're also thinking about what people are involved in the space. So it's traditionally been very government dominated, dominated, but now we are seeing, obviously, the private sector, a huge Mhmm. Component here. Talk to us about that evolution and Yeah. What you've observed from your seat.

Yeah. It started with governments because it was expensive. It was risky. What's happened really is today, most of spending in the space economy is really driven by commercial companies. About 80% today is driven by commercial companies. A generation ago, it was 80% government. And again, that's been driven by the steep reduction in launch costs, has which invited in a lot of new investment and a lot of new innovation that has just created a flywheel effect of attracting more investment and development.

Eric, let me bring you into the conversation. When we talk about this emerging space economy, what does it actually consist of? We think of these rocket launches that we see on our screens, but talk us through the different aspects of this economy.