The Space Economy: On Track To Reach $1.8 Trillion By 2035

The global space economy is poised to nearly triple in value over the next decade, climbing from $630 billion in 2023 to an estimated $1.8 trillion by 2035, according to a new report from the World Economic Forum.

The World Economic Forum predicts that the global space economy will nearly triple in value, reaching $1.8 trillion by 2035. This growth, driven by the increasing affordability of space-enabled technologies, will fuel innovations across industries, from transportation and food to defense and consumer goods.

This extraordinary growth, almost twice the rate of global GDP expansion, is driven by the increasing affordability and accessibility of space-based technologies like communications, navigation, and Earth observation services.

Sebastian Buckup, Member of the Executive Committee at the World Economic Forum, explains, "Space technologies are offering more value to a broader range of stakeholders than ever before. As costs drop and accessibility increases, these technologies could revolutionize entire industries, much like smartphones or cloud computing did."

The report, titled "Space: The $1.8 Trillion Opportunity for Global Economic Growth," developed with McKinsey & Company, predicts that more than 60% of this growth will come from key industries, including transportation and supply chain, food and beverage, defense, retail, and consumer goods.

The burgeoning space economy is reshaping business practices, creating new opportunities, and providing substantial societal benefits. The report identifies four key factors driving this rapid expansion.

Space's Expanding Reach

The space economy is moving beyond its traditional boundaries, fueled by the growing influence of space-based technologies. Leading companies like SpaceX, Blue Origin, and Virgin Galactic are pushing the limits of commercial space travel, opening new revenue streams with space tourism.

At the same time, ambitious projects like SpaceX's Starlink and Amazon's Project Kuiper are deploying large satellite constellations to provide global internet access, bridging the digital divide and transforming the telecommunications industry.

New Applications for Space Technology

Space-based technology is now integral to everyday life, influencing industries that traditionally had little connection to space. Ride-hailing apps and food delivery services, for example, rely heavily on satellite-based GPS for navigation and communication.

Uber and Grab use GPS satellites to optimize routes and ensure timely pickups, while food delivery platforms like GrabExpress and Foodpanda rely on the same technology for efficient order deliveries.

Connecting People and Goods

The space economy is enabling enhanced connectivity between people and goods, with significant growth projected in the transportation, logistics, and food and beverage sectors.

The use of Global Positioning Systems (GPS) has revolutionized logistics, allowing companies to track shipments, optimize routes, and reduce delivery times. Furthermore, satellite-based technology is pivotal to the development of autonomous vehicles, driving innovation in the transportation industry.

Beyond Financial Gains: Space's Role in Addressing Global Challenges

The space economy has broader implications beyond its economic impact, playing a critical role in addressing global challenges like disaster response, climate monitoring, and humanitarian efforts.

Satellites are invaluable for tracking and predicting natural disasters such as hurricanes, earthquakes, and wildfires, aiding rescue operations, and supporting humanitarian relief.

Agencies like NASA use satellite data to study climate change and inform global policy decisions, while satellite imagery aids in coordinating international relief efforts and delivering aid to remote areas.

Ryan Brukardt, Senior Partner at McKinsey & Company, underscores the broad impact of the space economy: "A growing number of industries, from agriculture to insurance, construction, and climate change mitigation, are finding new opportunities in the space economy. By embracing the full potential of space technologies, public and private industry players can position themselves as leaders in this rapidly expanding field."

The report also emphasizes the need for increased collaboration among public and private sectors to maximize the space economy's potential. By fostering harmonization, accessibility, and education, industries can contribute to and benefit from the anticipated expansion.

With the space economy set to grow exponentially, it's clear that space technology is poised to become as essential to modern life as semiconductors are today. From facilitating communication and transportation to aiding in disaster response, the opportunities for businesses and society are boundless.