The first session of the course on “The Business and Economics of the Space” was last night, Monday Nov 8. The topic was the History of Space and the Contemporary Space Agency. My key takeaway from the session was the rise of the NewSpace industry.
Earlier this summer I wrote about “Space; the final telco frontier” here. Much of the subject matter of the history of space is covered there. I did get a great comment on my post from Charles Miller, the CEO of Lynk who was also co-founder of NanoRacks and founder of ProSpace, a non-profit that lobbied to space policy legislation on Capital Hill including passage of the Commercial Space Act of 1998. He went on the be Senior Advisor for Commercial Space at NASA. He told me that he was part of the movement to jump start the industry and helped coin the term “NewSpace” in the early ’00s.
Access to space used to be limited to governments, specifically those of the United States, Russia and China. The “Space Race” in the 1960’s between the Soviet Union and the Americans during the Mercury, Gemini and Apollo programs could only be funded by national governments . Government contractors built the rockets and other equipment and they were typically subsidiaries of the defence industry. Those contracts were for cost-plus and programs were large, expensive, bureaucratic and slow.
There was a commercial space industry in SatCom after the USA passed the 1962 Communications Satellite Act that enabled private companies to own and operate satellites. We saw the launch of the Telstar satellites , Intelsat and our course Canada’s own Anik 1. The world could relay television, telephone and high speed data communications across the oceans ! It was an application of space that was private and commercial and not tied to civil, defence or the military.
NewSpace accelerated the move to privatization and commercialization of space beyond just SatCom. Through those early efforts of people like Charles, NASA and other space agencies expanded the playing field beyond Prime Contractors and Cost Plus programs. They moved to Build-to-Order and Public-Private Partnerships which was a game changer for the space industry. Contracts based on competition, performance and fixed price milestones moved more of the risk from governments and space agencies to the private sector.
With New Space we have witnessed the emergence of novel actors, primarily private and their ventures and implications for the global space sector. Some names are known widely like SpaceX, Blue Origin, Virgin. There have been billions invested in startup ventures, not only by VC’s and private equity, but also by the public markets. A dozen NewSpace startups have gone public, or are in the process of going public, using SPACs. The space industry is ready to explode with opportunities that have been unleashed by entrepreneurs.
I am looking forward to the rest of the sessions in the course as we dive deeper now into those opportunities and ventures.
Ad Astra
