[Square] Infrastructure Investment Needed to Lead the Space Economy

Heo Hee-young, Professor, Department of Business Administration, Korea Aerospace University

Twenty years ago, Donald Rumsfeld, the U.S. Secretary of Defense, submitted a report to Congress. Known as the 'Rumsfeld Report,' it called for strengthening influence in space and national interest. This report contained the United States' new space development policy. The target of global hegemony competition, which repeats every era, is clear. In the 18th century, it was the sea for colonial expansion; in the 20th century, the sky; and now, in the 21st century, it is no surprise that whoever dominates space rules the world.

The race toward space began half a century ago when humanity launched the first artificial satellite. Along with this, the scope of human thought and life expanded. In space development, which involves high uncertainty, great scientific and technological gains are achieved through challenges and failures. Space, which integrates various sciences and technologies, has long been the exclusive domain of advanced countries, symbolizing national prestige. Like during President Kennedy's era, when the Apollo project secured victory over the Soviet Union, space also became a political vision. China, the world's factory, transformed its image from a developing country producing low-cost goods to a high-tech nation by successfully conducting manned spaceflight with Shenzhou 5 in 2003.

Space development, which experienced a slump after the collapse of the Cold War system in the 1990s, opened the NewSpace era in the 2000s. The space economy was established through commercial development utilizing space infrastructure built by advanced countries, including the U.S. Technological innovations such as rocket reusability and the development of microsatellites lowered the barriers to entry by reducing launch vehicle and satellite production costs.

Private companies, which now account for about 80% of development funding and lead commercialization, include the global top three operators: SpaceX of Tesla, Blue Origin of Amazon, and Virgin Galactic of the UK. Additionally, startups from various countries are entering the market due to the vast potential of satellite-based markets such as data communication, GPS, and weather observation. According to Morgan Stanley Consulting Group's 'Space Industry Report (2020),' satellite broadband internet services, driven by the enormous data provided by satellites combined with artificial intelligence and big data, will lead 50-70% of the space economy by 2040, growing from a current $100 billion annual market to $1 trillion in 20 years. SpaceX's 'Starlink' project, which plans to deploy 12,000 small satellites to build a global high-speed satellite internet network, launched 1,000 small satellites last year in line with this trend.

The challenges toward the Moon, Mars, and beyond are akin to the explorations of great powers toward new continents. At the center is China, which has replaced Russia, but developing countries are also engaging in space development. Indonesia launched a communication satellite in 1976, and the United Arab Emirates, the first Arab nation to do so, launched the Mars probe 'Hope' and announced plans for asteroid exploration.

Following the success of Naroho, our government achieved results with the independent development of launch vehicles through Nuriho last October and has embarked on the 10-year Space Pioneer Project this year. The government also announced participation in the U.S.-led lunar exploration project 'Artemis.' While it is fortunate to participate in the joint development of a manned lunar exploration spacecraft by 2024, it is regrettable that our country was not included in the joint construction of the new space station 'Lunar Gateway.'

For the full-scale entry into the space industry, international cooperation and the direction of large-scale science policies are crucial. In the roadmap of industrial policy, continuity must be maintained at each stage of development by linking ongoing projects undergoing preliminary feasibility studies with budget input, so that manpower and investment do not cease. "Every dollar invested in space business will generate 7 to 12 dollars in return." This insight was revealed by futurist Alvin Toffler in his book The Future of Wealth (2006). Space will create enormous wealth. It is time to focus on infrastructure that invites private capital participation.

Hee-Young Heo, Professor, Department of Business Administration, Korea Aerospace University