"London-New York 29 Minutes... Finding the Future in the Space Industry, a 'Game Changer' for Travel and Logistics"

Korea International Trade Association Institute for International Trade and Commerce Report
'Key Trends and Implications According to Changes in the Space Industry Value Chain'

[Asia Economy Reporter Kim Heung-soon] It has been argued that if spacecraft rockets are utilized for air transportation, the paradigm of logistics and travel will be completely transformed, such as reaching from London, UK to New York, USA in 29 minutes, and that South Korea should actively foster the space industry, which will become a core infrastructure for future growth.

The Korea International Trade Association's International Trade and Commerce Research Institute stated this in its report titled 'Key Trends and Implications According to Changes in the Space Industry Value Chain,' published on the 14th. It identified five recent trends in the space industry: ▲ expansion of private investment ▲ spread of commercial business models ▲ technological and cost innovation ▲ expansion of satellite demand and domains ▲ intensified competition in space development among countries.

The space industry has long been led by governments, but in recent years, private companies' investment and participation have greatly expanded, spreading commercial business models such as building ultra-high-speed internet networks using satellites, utilizing spacecraft for air transportation, and space tourism.

Additionally, innovations in related technologies and cost reductions have increased the economic feasibility of the space industry. Accordingly, the demand and application areas of the satellite industry are expanding from fields like imaging and climate forecasting to communications, exploration and observation, transportation, and defense.

As the space industry ecosystem expands and large-scale projects are promoted through public-private cooperation, competition in space development among major countries is intensifying. The report predicted, "As competition among operators such as SpaceX and OneWeb in the ultra-high-speed internet market intensifies, the related market is expected to grow explosively," adding, "If rockets are used for delivery and travel, same-day product delivery and same-day (overseas) travel will become a reality."

The report explained that by utilizing the rapid orbit of low Earth orbit, the flight time between London and New York, which currently takes about 8 hours, can be reduced to 29 minutes. In fact, the United States allocated a budget of 50 million dollars for a super-speed military cargo transport project, proving the development potential in this field is sufficient.

The report also analyzed, "Although the satellite industry, which accounts for 73% of the space industry, has grown 1.6 times over the past 10 years and has shown a slight decline since 2018, this is not because the industry is declining but because technological innovation has led to cost reductions." It added, "When ultra-high-speed satellite communication (6th generation mobile communication) becomes possible, services such as autonomous driving, drones, urban airport mobility, and holograms?ultra-realistic immersive media?can be realized."

The Satellite Industry Association (SIA) of the United States forecasted that the global space industry will grow from $371 billion (approximately 423 trillion KRW) in 2020 to $1.1 trillion (approximately 1,286 trillion KRW) by 2040. On the other hand, South Korea's space industry size was about 3.8931 trillion KRW as of 2019, accounting for only around 1% of the global market, indicating the need for more active fostering policies.

Jeong Gwi-il, a research fellow at the Trade Association, said, "The space industry has long been a field where innovation was stagnant, but with the entry of global companies, productivity has improved and successful business models have emerged," adding, "Private companies should enhance competitiveness through technological and cost innovation, and the government should establish the institutional foundation necessary for growth by expanding budget support for companies' participation in space development."