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Space Tech: The Next Giant Leap For Investors?

Darcy Alexander
Darcy Alexander
Space tech

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Space Tech: The Next Giant Leap For Investors?

The Space Race began in 1955. Russia beat America to send the first man into space. America then proceeded to land the first man on the moon. After 20 years, the race concluded in 1975 when the U.S. and Soviet Union performed a handshake in orbit during the Apollo-Soyuz mission. However, whilst the race had formally ended, science had only just begun. Thanks to visionary billionaires and space enthusiasts such as Elon Musk, Richard Branson and Jeff Bezos, space exploration is set to once again be at the forefront of innovation, inciting technological advancements that will continue to progress our world as it has in the past. Labelled as the next trillion-dollar industry, is space exploration the next sector to invest in?

Some of the most advanced technological and scientific discoveries have resulted from overcoming the challenges of working in one of the most hostile environments. From medicine to safety, transportation and the environment – even to our beliefs and our cultures, transformative technology and the accompanying tools inspired by space exploration have led to humanity-advancing solutions that we often use daily. Cordless tools, light-based anti-cancer therapy, global search-and-rescue systems, implantable heart monitors, water-purifications systems, and home insulation all derived from questioning our greater existence.
  • The camera phone: In the 1990s, NASA’s Jet Propulsion Laboratory team invented a light, miniature imaging system that consumed minimal energy to take high-quality photographs from space. A third of all cameras in our smartphones and computers today contain this technology and are being carried around in our pockets everywhere we go.
  • CAT Scans: Originally invented to recreate images of the moon during the Apollo missions, the digital signal technology is now the underlying tech in CAT and MRI scans.
  • Memory foams: Created to cushion astronauts during high-force takeoff and landing, the visco-elastic foam seats were created to mould to bodies and return to standard after use.
  • Athletic shoes: Former NASA engineer, M. Frank Rudy, pioneered the infamous “hollowed-out” midsole in Nike Air trainers by using tech developed originally for space helmets.
  • Wireless headsets: To enable astronauts to be hands-free, NASA invented communication tech that worked without wires.
  • Freeze-dried food: After researching how to preserve and pack more food into the aircraft, NASA developed freeze-drying, which retains 98% of the nutrients and weighs only 20% of the original weight.
It doesn’t end there: from portable computers, artificial limbs, baby formula, adjustable smoke detectors, ear thermometers, and so much more. In less than 70 years, space exploration has led to cutting-edge breakthroughs in all sectors of life. However, each of these groundbreaking advancements has two things in common: first, someone identifying the commercial application of the technology, and second, an investor intelligent enough to back them.

A billionaire’s space mission

There is a reason some of the world’s wealthiest people are obsessed with space exploration: for ambitious entrepreneurs and would-be world changers, Earth is last year’s news. Instead, space is the place they want to be – because cosmology – more than any other curiosity – profits from mystery. According to Dan Tynan, we should “forget gilded mansions and superyachts. Among the tech elite, space exploration is now the ultimate status symbol.”

N2 technology
From left, Richard Branson, Jeff Bezos and Elon Musk. (Associated Press (left and center) | Los Angeles Times (right))

Elon Musk has SpaceX; Jeff Bezos has Blue Origin; Richard Branson has Virgin Orbit. Musk famously joked that he hoped to die on Mars – just not on impact. He believes in preparing for “plan B” as he fears that Earth will inevitably endure an extinction event, so the alternative is to become a spacefaring civilisation and a multi-planetary species. Setting his sights on colonising the Red Planet as soon as 2022 through the use of a 400-foot-tall rocket, Musk plans on ferrying 100 colonists at a time, over a period of decades.

Branson has his heart set on opening space for everyone and enhancing life on Earth. He believes that small satellites enable a new era of capabilities by stimulating the global economy, connecting rural communities, monitoring global climate change and expanding the limits of human knowledge. Currently, roughly 3,000 active satellites are orbiting above Earth, with that number expected to skyrocket in the coming years. By 2025, experts predict a 230% increase in satellite launches per year, with 24,000 launches currently in planning – and that figure doesn’t include launches by Tesla, OneWeb, Kuiper or SpaceX’s Starlink that has already applied to fly 40,000 satellites.

Meanwhile, Russian entrepreneur, Yuri Milner, is driven by questions about life in the universe, asking: Are we alone? Is there life elsewhere? In April 2015, he announced a $100m investment for research into using lasers to fling tiny robots towards the stars at one-fifth the speed of light, in a radical plan to search for life beyond Earth. The Digital Sky Technologies founder hopes his Breakthrough Starshot initiative will develop spacecraft that can reach Alpha Centauri, the closest star to our solar system, within 20 years.

According to Bezos, Earth is the “best planet” and must be protected. Concerned primarily with pollution reduction and Earth preservation, the Amazon owner believes that building an unlimited future economy – where most manufacturing would take place in space, would address such threats. Comparing the new space industry to the early days of the internet – where fibre optic cables laid the foundations of voice communications in the 1960s and 1970s and ultimately paved the way for today’s data-driven economy – a solid, heavy-lifting infrastructure for future generations of entrepreneurs is vital. Adamant that we must “go to space to save Earth,” Bezos has vowed to use his personal resources to build a solar system as dynamic, interesting and varied as what we see on the internet today.

Once we discover how to economically transport heavy machinery into space, permanent “off-Earth” manufacturing could become a reality. More than just cutting costs, benefits can derive from work conducted in the cosmos as sometimes the microgravity conditions are considered ideal for developing materials. For example, protein and virus crystals can potentially enhance drug research and provide new therapies and medical treatments for infections and diseases. ZBLAN, a fibre-optic cable that can perform better light transmission over long distances that supports telecommunications, lasers and high-speed internet, can develop tiny crystals that result in signal losses when manufactured on Earth. When built without such flaws, the cable can provide better performance.

It’s undeniable that orbital manufacturing will yield innovations in technology, medicine and material science throughout the next few decades. In theory, we can forget the threat of moving manufacturing from Europe or the U.S. to China. Instead, we might just be competing for employment against robot-filled factories in space! In other words: billionaires could initiate further radical changes to our social structures via the exploration of space.

Investing in space

As agriculture becomes agritech, finance becomes fintech, education becomes edtech, and cars become autonomous, the demand for satellite driven data will become astronomical. As the space economy begins to exploit its full potential, a solid infrastructure – perhaps through constellations of satellites – will be required, along with debris removal and Earth observation.
With that, the global space industry expects to generate revenue of at least $1.4 trillion by 2030. History proves that a single transformative technology shift can often spark new eras of modernisation, followed by an abundance of complementing innovations. Space exploration can re-shape the global economy by inventing new technologies that quickly become central to our day-to-day lives, offer more opportunities, find better ways to protect the environment, and further question our existential purpose.
In previous decades, space missions primarily operated through space agencies, yet private sector involvement was vital for supplying hardware and expertise. Since the increased activity from commercial operators such as SpaceX and Blue Origin, the high-cost barrier to entry has lowered, enabling the sector to become more stable and profitable for a new wave of investors. Opportunities now present in sectors not only limited to aerospace and defence. IT hardware, entertainment and telecoms – among many others – are all applicable for space exploration innovation.

Investors are therefore focussing on the myriad of increasing investment opportunity. Since 2008, interest has escalated: the global space sector has grown over 42%. With ambitions to place the UK at the forefront of space innovation, the British government awarded £7 million to 21 UK organisations in December 2020 and has seen 91% growth in the sector.

2020, and 2021, has also brought a constellation of space companies going public, often through SPAC. We are now witnessing a seismic shift of interest in a sector with an infinite growth trajectory; in the past ten years, $177.7 billion of equity investment has generated 1,343 space companies. Whilst expertise, tenacity and upfront capital are required to launch viable space-based businesses, today’s entrepreneurs and space explorers are meeting the challenges of building a robust commercial space industry. As co-founder of Space Ventures Investors, Simon Drake, says, “what separates space investing apart from other sectors is that the space industry has no boundaries; humanity will always be pushing new frontiers. However, in the short term, the preservation of share capital and analytical study of where and what to invest forms the base on which the space industry revolution will grow.” So our question is: what part of humanity do you want to change?

Conclusion

Space exploration has founded an impressive record of benefits for humanity. Scientific, medical and technological innovations have incited the development of countless technology, tools and devices that we use and experience every day – around the world. Sending humans and machines to space presents challenges subsequently defeated with ingenuity, driving the discovery of newfound knowledge, understanding and modernisation. These findings further serve cultural and inspirational purpose by fulfilling the deep need to understand the world, human origin and the nature of the Universe. With each discovery, infinite opportunities present, declaring an investor’s nirvana where exceptional entrepreneurs are waiting to be found, and highly profitable returns are expected. The quantum leaps that can be achieved, ultimately pave the way for unprecedented breakthroughs, spectacular returns and countless, massive industries as a byproduct – and we’re only just getting started! So we ask: where no man has gone before, where do you want to go?

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