The space economy is growing rapidly, opening up opportunities that were unimaginable just a few years ago. Some examples:
- Drug development in microgravity conditions. The startup LambdaVision is taking advantage of the fact that protein crystallization is optimal in space to create an artificial retina intended to treat blindness. Likewise, large pharmaceutical companies are investigating how to reformulate existing medications (e.g. monoclonal antibodies for cancer treatments).
- Monitoring of greenhouse gas emissions into the atmosphere. The Spanish company Satlantis uses high-resolution satellite images to identify and monitor methane leaks. She’s not the only one who does it. The British Terrabotics, the French Kayrros or the Canadian GHGsat offer a similar service with considerable success. The market for earth observation is finding great utility in the area of environmental sustainability.
- Connectivity in remote locations. Matty Jordan, a researcher at Scott Base, a scientific facility in Antarctica, has suddenly become a mass phenomenon by being able to show via satellite on social networks his daily activity in extreme conditions of -50 degrees Celsius. This shows that any place on earth, no matter how remote, now has connectivity.
- Spacial tourism. Although the Japanese billionaire Yusaku Maezawa has canceled the “dearMoon” mission, which was going to make him the first tourist in space along with eight guests, we are getting closer to making this a reality. Who knows if next year this dream will materialize.
These are just a few examples of what the OECD defines as the space economy, which encompasses “all activities and resources that, through the exploration, understanding, management and exploitation of space, generate value or provide benefits to humanity.” The trigger for this immense economic opportunity has been the reduction in the cost of launching rockets and satellites into space. Then everything else has come: terrestrial observation, space tourism, experimental drugs or asteroid mining, among others. Although of all the business opportunities, satellite internet through LEO (Low Earth Orbit) constellations is what, according to Morgan Stanley, contains the greatest growth potential. In fact, it is estimated that in the next decade it will represent 50% of the entire space economy. Perhaps that is why Andy Jassy, CEO of Amazon, recently declared that in the future satellite internet will be a “new leg” on which his business stands.
The birth of an industry: Internet in space
In 2015, Elon Musk announced an ambitious plan to “build the Internet in space” relying on a constellation of satellites. That year the valuation of SpaceX, at that time best known for rocket manufacturing, was $12 billion. Currently, according to Bloomberg, this figure would have risen to 180 billion. It is enough to think that this valuation is more than 7 times the market capitalization of Telefónica to get an idea of the potential and speed at which the market moves.
It is difficult to know exactly the number of satellites that are orbiting the Earth at the moment. The number increases every day, but it is estimated that there are approximately 7,500. Of these, 5,600 are operated by SpaceX through its Starlink satellite division, with which it provides high-speed internet to more than 2.6 million customers. Signing up for the service as an individual is very simple. Proof of this is that the antenna that connects with the satellites has three simple drawings as instructions. In addition, the service is also aimed at the business segment. For example, at the beginning of the year, the company signed an agreement with John Deere to develop precision agriculture, thanks to the connectivity it offers in rural areas where other traditional means of telecommunications do not reach. Lastly, and this is the most well-known use, some armies are using it in war zones such as Ukraine.
Although with some delay, Amazon is also working on its own constellation of LEO satellites under the Kuiper project. By 2026, it could have 3,000 operational satellites. The Starlink and Kuiper projects alone could already create an industry, but they are not the only ones. China is developing a constellation of 13,000 satellites through CASC (China Aerospace Science and Technology Corporation) while Europe launched the IRIS2 initiative in 2023 with the goal of having 7,000 operational satellites by 2027.
Houston, we have a problem: an uncontrolled proliferation of satellites
Before the end of the decade, the number of satellites orbiting the Earth will have exceeded 20,000. This volume poses multiple challenges. For example, astronomers are already warning of a deterioration in images from the Hubble telescope. Other more mundane problems have to do with its impact on essential services, both meteorological and those that depend on GPS navigation.
However, the main concern is knowing how to manage space debris to avoid what is known as Kessler syndrome. A vicious circle where debris collides with satellites in use, generating new debris that in turn collides with other satellites and so on. For example, when two satellites collided in 2009, more than 2,200 pieces were left floating in space. It also doesn’t help that some countries eliminate obsolete satellites with missiles. In fact, NASA estimates that the debris accumulated in LEO orbit is 34,000 pieces larger than 10 cm, 900,000 between 1 cm and 10 cm, and more than 128 million fragments between 1 mm and 1 cm. Although the latter seem harmless, moving at high speed they also have a destructive effect if they reach a satellite.
Currently, different companies are working on solutions to “clean up space.” For example, the Spanish GMV recently joined Net Zero Space to combat space debris. In addition to these types of initiatives, startups are also emerging, such as the Norwegian Solstorm, whose mission is to achieve responsible space exploitation.
And the current model is not sustainable: if you privatize profits and socialize losses, you have the recipe for what economists call “the tragedy of the commons.” In this case, an overexploitation of space resources. Although talking about tragedy gives an idea of inevitability, the truth is that it is a problem that can be managed. But, for this, it is necessary that international agreements be reached. Something that, given the current geopolitical context, seems very complicated. In fact, even the 1967 treaty on the peaceful uses of space is now threatened.
Until binding agreements are reached, ways will have to be found for private companies that exploit space resources to internalize all their costs. At least, today there is awareness of the problem that is being generated, which is a first step towards its solution.
