How Startups are Tapping into the $1.8 Trillion Global Space Economy?

The space economy is not just about rockets and satellites; it's about transforming industries and addressing global challenges. With forecasts predicting a staggering USD 1.8 trillion valuation by 2035, the space economy is poised to become a central force in our increasingly connected world. 

A World Economic Forum report says, “The space economy is forecast to soar to USD 1.8 trillion by 2035 in an increasingly connected and mobile world, impacting and creating value for nearly all industries on Earth and providing solutions to many of the world’s greatest challenges.”

A recent report by the World Economic Forum and McKinsey & Company sheds light on the pivotal role startups will play in shaping this burgeoning sector.

The Changing Landscape of Space Economics

Traditionally dominated by established players, the space industry is undergoing a seismic shift. The report highlights how non-traditional entities, including startups, are poised to claim a significant share of the space economy. From ride-hailing apps utilizing satellite technology to innovative solutions in disaster management, startups are rewriting the rules of engagement in space.

Opportunities Across Industries

Startups are not only disrupting traditional space sectors but also creating new avenues for growth across various industries. “Five industries – supply chain and transportation; food and beverage; state-sponsored defence; retail, consumer goods and lifestyle; and digital communications – will generate more than 60% of the increase in the space economy by 2035. In addition, nine other industries will see space-related revenues reach several billion dollars – creating opportunities for traditional and non-traditional players alike,” adds the report.

This presents a wealth of opportunities for both traditional and non-traditional players to capitalize on space-related revenues.

The report further highlights that, “This could grow the space economy to USD 2.3 trillion by 2035 by: – Fostering use of space-based capabilities: For instance, super-heavy launch platforms are poised to impact both backbone and reach stakeholders, ranging from innovative commercial start-ups to established space organizations to research companies, as they all gain the new possibility to launch larger, more complex missions.”

Unlocking the Potential of Space

Embracing the potential of space is imperative for both incumbents and newcomers alike. Collaboration, innovation, and financial competitiveness will be key factors in determining the trajectory of the space economy. By standardizing access, enhancing usability, and fostering global cooperation, startups can position themselves as leaders in this dynamic landscape.

 Navigating the Trajectory of the Space Economy

Technological evolution and financial competitiveness will be pivotal in shaping the future of the space economy. The report outlines two potential scenarios: an optimistic outlook projecting a USD 2.3 trillion space economy by 2035 and a more conservative estimate of USD 1.4 trillion. Startups have a unique opportunity to drive growth by leveraging advancements in space data accessibility and reducing barriers to entry.

“The space economy is forecast to reach USD 1.8 trillion by 2035, up from USD 630 billion in 2023 and growing at an average of 9% per annum – well above the growth rate of global gross domestic product (GDP). This growth will largely be built upon space-based and/or enabled technologies such as communications; positioning, navigation and timing; and Earth observation,” says the report.

Disrupting Disaster Management

Startups are at the forefront of revolutionizing disaster forecasting and mitigation through space technology. By harnessing satellite data and analytics, these ventures are empowering early warning systems and enhancing response capabilities. From monitoring natural disasters to tracking ground movements, space-based solutions offer invaluable support in mitigating the impact of calamities.

The WEF Report says, “While space can help in disaster response, it also helps much upstream, such as by supporting efforts to monitor and reduce global climate change. For example, methane is a potent greenhouse gas, and fugitive leaks from ageing industrial infrastructure can be a major contributor to climate change. Start-ups are making satellites to detect these leaks, in a way that is more cost effective than deploying sensors along hundreds or thousands of kilometres of pipelines. Scaling this capability would help governments, industries and environmental organizations pinpoint fugitive emissions earlier on and mitigate their effects, potentially saving 6 million tons of methane emissions every year.”

Addressing Climate Change

 Space technology is also proving instrumental in addressing global challenges like climate change. Startups are developing innovative solutions to detect methane emissions and monitor environmental factors, paving the way for more effective climate risk mitigation strategies. By scaling these capabilities, startups can contribute to significant reductions in greenhouse gas emissions and foster a more sustainable future.

The Indian Space Economy

If we talk about the Indian Space Startup Economy, Union Minister Jitendra Singh, had highlighted that the Indian space startups had attracted over Rs 1,000 crores of private investment since April to mid -December in 2023 and the country has the potential to reach a 100 billion USD space economy by 2040.

 The approval of Indian Space Policy 2023 gave a major impetus to the Indian private space industry, by making it a lucrative investment option for investors. 

The Space Policy outlined that the government will focus on promoting space-related education and innovation, including support to space-sector start-ups.  

Dr Singh recently also said that “India’s space economy today stands at a modest $8 Bn, but our projection is that by 2040, it will multiply manifold. But a more interesting thing is that according to some international observers, for example, the recent ADL (Arthur D Little) report mentions that we have the potential of $100 Bn by 2040.”

 A Stellar Future for Space Startups

As the space economy continues to expand, startups have the potential to play a pivotal role in driving innovation and unlocking new possibilities. With the right combination of collaboration, innovation, and investment, these ventures hold the key to shaping the future of space exploration and leveraging its vast potential for the betterment of humanity.

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