Space continues to leap ahead in a bid to become a new frontier. Space economy should be worth $1.8 trillion by the year 2035. This is expected to be supported by satellite and rocket-enabled technologies as these are becoming prevalent. Therefore, investment opportunities in the space economy appear to be strong and magnificent.
It goes without saying that space-enabled technologies support everything i.e., ranging from weather forecasts to smart gadgets like smart watches. Apart from these benefits, investment opportunities in the space economy are being augmented through its diversification in industries like retail, consumer goods, lifestyle, food and beverages, transport, etc.
Collectively, all these industries are expected to be supported from space innovations.
Space economy’s potential and value
Before knowing the investment opportunities in the space economy, it is of utmost importance to know that space economy is playing important role in today’s world. Applications and benefits of the space economy extend far beyond space exploration.
That is to say, global communication networks (Satellite are important in enabling global telecommunications and internet services) and navigation and transportation (GPS technology has applications in numerous industries like logistics, aviation, etc.) all form part of space economy.
Investment opportunities in the space economy range from direct investments in space startups and renowned companies to space-inclined ETFs and venture funds. Therefore, investors continue to have chance to participate in numerous sectors in space economy. They will be able to contribute and benefit from sectoral growth and innovation.
Expansion of space economy
Decline in launch costs along with ongoing commercial innovation should mean that more can be done in space and in an efficient way. Number of satellites which are launched per year, for example, grew by 50%. At the same time, launch costs have declined 10-fold in previous last 20 years. As a result of this, lower costs continue to promote more launches.
Price of data, that remains a key to connectivity, has declined too. This trend is expected to continue broadly throughout different sectors.
Additionally, a range of investors, which include state and non-state actors, continue to invest in space. This is supported by fact that investments have touched all-times highs of over $70 billion in 2021 and 2022.
Supply chain and transport are expected to benefit from more efficient and cost-effective logistics. This means that food and beverage industry will see increased efficiency in last-mile delivery of perishable goods.
Market opportunities
A recent report from World Economic Forum, explains that by the end of 2035, space economy should be able to reach ~$1.8 trillion. This exhibits a rise from $630 billion in 2023 and averages growth rate of ~9% p.a. As experts say, this figure is significantly above growth rate of global GDP.
This growth is expected to stem from space-based and space-enabled technologies like communications, positioning, navigation and timing.
Experts opine that share of total space economy which gets captured by traditional hardware and service providers is expected to slowly decrease. This will be beneficial for other services including ride hailing apps as their products are dependent on space-enabled technology like satellites.
Space economy should play a critical role in mitigating world challenges. These are expected to range from disaster management and climate monitoring, to improved and better humanitarian response and prosperity.
Applications such as space tourism have come out from science fiction. Market has been projected to be capped at ~$4 billion-6 billion by the end of 2035. Most of the revenues are expected to come from in-orbit stays aboard space stations with the support of ultra-high-net-worth individuals.
How you grasp investment opportunities in the space economy?
Making investments in space sector should not be an all-or-nothing strategy. With the help of diversifying your investments via space company stock, space-focused ETFs and individual stocks, the risks can be minimised.
At the same time, the investors will be able to enter this market which can be potentially rewarding.
Therefore, investors can purchase publicly-listed space stocks. In India, MTAR Technologies Ltd., Paras Defence and Space Technologies, Space Incubatrics Technologies, etc. are some of the space stocks.
On the other hand, The Lockheed Martin Corporation, Maxar Technologies Inc., etc. are some of the space stocks in the US.
Making investments in private space companies gives an opportunity to participate in evolving space industry. More often than not, purchasing shares in the private firms will require going through pre-IPO offerings.