boosting the space economy: how federal policies and financial lending can help put the industry on a new trajectory
The space economy is about to see a major boost in investment, infrastructure, and public interest.
There are two ways that the space will soon find itself headed in the right direction: new public policy both domestically and abroad, and new streams of financial lending taking interest in the potential of commercial space.
Current Reality:
At present, space startups are often supported by high-net-worth individuals, grant mills without clear commercialization strategies, or entrepreneurs seeking to develop solutions to problems, hoping to later sell them to primes (large government contractors).
Past dynamics of investment in the space economy are not sustainable- we know some startups did a SPAC. Still, many space startups don’t have the support with deep pockets, military and NASA contractors, or proven customers.
Potential Policies:
1. New federal policies will help open up the space economy and critical market segments. One approach in the discussion, addressing our space-based assets as part of our civilization’s critical infrastructure. This, in turn, will support new activity in the space economy, as previously unheard of markets are developed—such as one of our clients, Space Cowboy, a pioneer in space debris remediation. An example of a market that may become highly regulated similar to utility companies here on Earth one day.
2. Straightforward policies incentivize investment. Clear policy addressing global climate change has led to investment in Green Tech, and we expect to see the same in the space economy.
In partnership with state commissions and other public and private partnerships, we can combine and leverage the political capital to support one of the potential policy initiatives above.
Support from Mature Industries:
Historically, existing, mature industries have driven the space economy. Recognizing some sectors of the space economy can help us understand its potential for innovation and growth:
Semiconductors and Microprocessors
New developments in computing power have and will support the space economy, just as microprocessors and semiconductors are being used to discover, solve, or prove climate change, make advances in medicine and life sciences, or support new sources of power and energy.
Life Science and Biotechnology
The space economy is supported by new advancements in diagnosing and addressing cancer, radiation therapy, sports medicine, and hyperbolic treatments. Supporting human life in space is a complicated task.
Power and Energy
Energy in space benefits from solar-powered rovers to satellites orbiting our planet. The space economy relies on new and emerging power and battery-storage technology. Nuclear is another consideration for in-space propulsion and future settlement sites as a means to sustain human life in space.
Agriculture
The space economy is supported by new products and procedures regarding crop yields, aquaculture, fertilizer technology, and agriculture practices. Space has and will draw from advancements made in food production here on Earth.
Cyber Security
The success of the space economy relies on the latest cybersecurity implementations. National interests and global security may complicate public and private investment, but we expect continued interest in securing space-based assets and critical infrastructure impacting improvements and best practices for Earth, the Moon, Mars, and beyond.
National Security and Industrial Manufacturing
National security has a longstanding history within the space sector, like communications and GPS satellite constellations. New methods for industrial manufacturing are coming online and are needed when envisioning future constellations. Industrial manufacturing also benefits off-planet mineral exploration, providing strategic advantages to nations in their exploration and development endeavors.
Entry Barriers:
We expect the market will soon be populated by early and mid-stage investment opportunities that support startups—especially those with clear commercialization strategies. The larger space economy will open up as these companies find themselves finally able to take advantage of new lending opportunities and innovation programs.
Currently, some companies in the space economy are seeing success, while others continue to struggle. We know that in the past, venture capitalists’ hesitation to invest in the space economy has usually been for one of four reasons:
the company’s work is unprecedented and thus its value is difficult to describe
the company’s investment window and scalability is unclear
investors lack any means to properly vet a company’s technology
the company lacks a proven commercialization plans with minimum viable products
Until companies in the space industry address these concerns, traditional venture capital firms will continue to gravitate toward safer, software-based investments.
Many VCs working in the space economy wait for governmental stamps of approval and approved government missions to validate a company’s technology before investing, but as is often the case, government moves at a very different rate than private industries.
And, commercialization counts: too often startup companies in the space economy create incredible technology but lack a solid plan for their product’s commercialization and wider sale. Too often this leaves startups and their technology sold, shelved, or, at worst, stolen. Technology that supports the space economy itself needs to be kept secure, as its availability may be a threat to national security and continued support from investors. Companies working in or supporting space-based applications can take measures that will make them more attractive to investors of many types.
Articulation is crucial for companies that want to engage with customers, investors, and the general public.
Gallant Culture is a full-service boutique marketing agency that is uniquely positioned to service a company’s communication needs. Please contact us to learn more about how we can help put your company on the best trajectory possible.
Please be in touch and we’ll help put you on the right track.