[Plaza] Self Regulation and New Industries

Jung Manki, Chairman of the Korea Industrial Federation Forum

Two monumental events occurred on Earth this year. The first was the news that Virgin Galactic, founded by British billionaire Richard Branson, succeeded in spaceflight as the world's first private company on the 11th. Nine days later, on the 20th, Blue Origin, founded by Amazon.com founder Jeff Bezos, also succeeded in spaceflight.

Virgin Galactic developed a spacecraft carrying six people, including two pilots, aiming for space tourism for the general public. After separating from the mothership aircraft at about 15 km altitude, the spacecraft reached approximately 80 km altitude, which the U.S. Federal Aviation Administration (FAA) defines as spaceflight, flew for several minutes, and then returned to Earth. Blue Origin developed the New Shepard, a six-seater unmanned spacecraft targeting not only space tourism but also government and military customers. The New Shepard consists of a rocket section similar to conventional space rockets and a capsule section for passengers. Three minutes after launch, the capsule separated from the rocket at about 80 km altitude, then flew for several minutes at about 100 km altitude?the altitude the FAA defines as the boundary of space?before returning to Earth.

Virgin Galactic's tickets cost about 300 million KRW each, with around 600 people on the reservation list, while Blue Origin's auctioned seat sold for approximately 32.2 billion KRW. This success has effectively realized the new industry of space tourism.

Why has this success occurred in the United States? While technology is a major factor, considering the FAA's very strict aviation regulations, it cannot be attributed solely to U.S. space technology. The role of Congress and the government appears crucial. In 2004, the U.S. Congress passed the Commercial Space Launch Amendments Act, allowing self-regulation instead of strict federal safety regulations that govern commercial flights, to open the era of private space tourism. The judgment was that rapid development is possible by entrusting private autonomy rather than strict regulation in the early stages when the market is not yet formed. There was also the view that applying general commercial flight safety regulations to spaceflight was inappropriate.

According to congressional legislation, FAA regulations are limited to business licenses for carrying paying passengers and passenger safety and environmental protection during spacecraft launch and atmospheric re-entry. Virgin Galactic and Blue Origin each obtained business licenses from the FAA in June and July of this year, respectively. In Blue Origin's case, aside from checking whether passengers can board the capsule by climbing the launch pad stairs within 90 seconds, there are almost no boarding regulations. However, it is known that the federal government and Congress are discussing whether to mandate minimum training to ensure passenger safety.

Space travel can threaten life, so ensuring safety cannot be overemphasized. Under normal circumstances, strict safety regulations are inevitable. Nevertheless, if the government imposes regulations at the early stage of industry formation, it may hinder industry development without ensuring safety. The wise judgment of the U.S. Congress, trusting private companies, is creating a high value-added new industry called space tourism. It is currently difficult to even guess how far the impact of this industry will reach.

This is not the only case. Based on trust in the private sector, the United States is already fostering new industries in various fields such as the sharing economy, Hyperloop, biotechnology, and artificial intelligence (AI) by minimizing regulations despite resistance from interest groups.

What about us? We need to reflect on whether we create regulations first whenever new industries emerge due to pressure from interest groups. We must go beyond negative regulations and introduce extensive self-regulation. We must not cause regression through clumsy new industry regulations and plunge future generations into despair. The U.S. case should serve as a valuable lesson.

Jung Manki, Chairman of the Korea Industrial Alliance Forum (KIAF)