[Lee Jong-woo's Economic Reading] The Approaching Space... Need to Increase Private Investment Further

Government-Led Space Development
Leadership Shifts to Private Companies like SpaceX and Blue Origin
Space Industry Expected to Expand to $1.4 Trillion by 2030

The Korean rocket Nuri will be launched on the 21st. It is the first launch vehicle that South Korea has independently designed, developed, manufactured, and launched. If Nuri's launch succeeds, South Korea will become the seventh country in the world to launch a satellite using its own launch vehicle.

Considering that our economy ranks tenth in the world, participation in space development has been somewhat delayed. This is because missile agreements with the United States restricted research and development of launch vehicles, hindering progress in that sector. As a result, while satellite manufacturing technology has already reached an advanced level, the development of rockets or space probes capable of launching satellites into space lagged far behind international standards. The Nuri launch will serve as a bridge to resolve this imbalance.

If the Nuri launch succeeds, the next step is the development of a solid engine launch vehicle. Nuri consists of a first stage engine with four 75-ton liquid engines, a second stage engine with one 75-ton liquid engine, and a third stage engine with one 7-ton liquid engine. Liquid engines require fueling with liquid propellant and oxidizer two to three days before launch, but solid engine launch vehicles use solid fuel that burns quickly, allowing immediate launch without prior fueling.

Another area garnering attention in domestic space development is satellites. Currently, the next-generation medium-sized satellite development is underway. In March, the first Korean next-generation medium-sized satellite, an earth observation satellite, was launched into orbit aboard a Russian Soyuz rocket. The second satellite is scheduled to be developed by the private company Korea Aerospace Industries using technology transferred from the Korea Aerospace Research Institute, with completion planned by January next year.

Space development, which had long been government-led, shifted to private companies in the mid-2010s. Thanks to this, the once-renowned names like NASA, the European Space Agency (ESA), and the Russian Federal Space Agency have faded, replaced by American private companies such as SpaceX, Blue Origin, and Virgin Galactic. The reason is simple. When the U.S. was heavily investing in space shuttle development, NASA's annual budget rose to 4% of the entire U.S. budget. Unable to bear these costs, the U.S. government opened the door to private space industry. Now, NASA earns revenue by selling developed technologies to the private sector or leasing launch facilities.

What kind of businesses are private companies pursuing through space development? First is 6th generation mobile communication (6G). This involves launching countless communication satellites into low Earth orbit to enable fast data communication anywhere. The term "anywhere" encompasses not only land but also maritime and aviation areas. SpaceX's Starlink project is a representative example. With faster data transmission through 6G, communication between people as well as the Internet of Things (IoT) will advance dramatically. Autonomous driving of vehicles will also become more sophisticated, leading to a significant increase in related demand.

Second is space tourism. Currently, a single space trip costs about 200 billion won for SpaceX and 250 million won per person for Virgin Galactic, but with future technological advancements, space travel may become commonplace.

Third is 3D bio-printing. In 3D bio-printing, where human tissues and organs are printed for transplantation, gravity poses a major obstacle. Most human organs are soft and have complex structures, making the manufacturing process highly constrained by gravity. Space, where gravity's influence is minimal, is an ideal environment for applying 3D bio-printing technology.

Fourth is mineral exploration. The lunar surface contains a rare resource called helium-3. One ton of helium-3 fused in nuclear fusion can produce energy equivalent to 14 million tons of oil or 40 million tons of coal. It produces almost no radioactive waste, and it is estimated that at least one million tons of helium-3 exist on the moon's surface. This is an energy source that humanity could use for 10,000 years.

Overseas investment institutions predict that through these business models, the space industry will expand to $1.4 trillion by 2030. This is a more rapid growth forecast compared to five years ago when Morgan Stanley estimated the space industry market size to be about $1 trillion by 2040.

As the market size grows, the value of companies participating in space development has also increased. SpaceX is a prime example, with a corporate valuation exceeding $100.3 billion (120 trillion won). It ranks second among all private companies worldwide after China's ByteDance, owner of the social media platform TikTok, and has a larger market capitalization than Lockheed Martin, the world's largest defense contractor. South Korea's space industry is also continuously expanding. In 2010, Korean companies' space industry sales were 796 billion won, increasing to 3.261 trillion won in 2019. The market size grew more than fourfold over nine years, recording an average annual growth rate of 17%.

The global space industry is progressing from a first stage where governments lead and a few related private companies participate, to a second stage where governments provide most of the demand for space development but private companies supply the necessary equipment. In faster-moving countries like the U.S., the industry is moving toward the New Space stage, where private companies handle everything from planning, budgeting, development, to utilization. The space industry is establishing itself as an industry with a stable revenue structure.

In 1863, French novelist Jules Verne wrote a work titled "Paris in the 20th Century." Finding it absurd after writing, he never published it and died. In 1994, 130 years later, his great-grandson discovered the manuscript and published it, and it quickly became a bestseller. The 20th century Jules Verne envisioned featured glass skyscrapers, air conditioning, TV, high-speed trains, and the internet?elements not much different from present-day Paris. What seems unfamiliar now will become familiar over time. The same applies to the space industry. What seems absurd now will become reality in 20 to 30 years, just like the stories in novels. To avoid falling behind, we must increase investment in the space industry starting now. We wish for the successful launch of Nuri.