While reading Chad Anderson's "The Space Economy" this week, I've been struck by how this market, though often described as nascent, has already woven itself into the fabric of our modern economy. Here are some of my notes (raw and unstructured):
The Foundation: GEOINT and SATCOM
Two pillars of the space economy already play crucial roles in major industries on Earth: geospatial intelligence (GEOINT) and satellite communications (SATCOM). These established segments demonstrate the space economy's mature aspects, even as newer opportunities emerge.
The U.S. space sector has weathered its share of setbacks, with previous failures causing many to miss the subsequent turnaround. High costs and regulatory barriers had cooled investment enthusiasm. However, the last five years have seen remarkable growth, largely credited to SpaceX's success in reducing launch costs and navigating regulatory challenges. While Anderson acknowledges satellites as key components of next-generation digital infrastructure, he emphasizes that the space economy extends far beyond satellite deployment.
The Space Economy stack
Anderson presents a compelling three-layer model that powers the space economy:
Infrastructure: The foundation layer focused on building, launching, and operating space-based assets
Distribution: The middle layer handling the receiving, processing, storing, and delivery of data from space-based assets
Applications: The top layer where data transforms into products and services for customer use
To illustrate this stack in action, consider GPS technology: Lockheed Martin launches GPS satellites (infrastructure), companies like Trimble and Garmin create terminals that receive GPS signals (distribution), and software developers like Uber, Yelp, and Niantic build applications that leverage GPS data.
The Next Frontier: Four Emerging Industries
Beyond the established sectors of GPS, GEOINT, and SATCOM, Anderson identifies four emerging industries poised for growth (to be further defined in a later chapter):
Stations
Lunar operations
Logistics
Industrials
Drawing a fascinating parallel, Anderson compares SpaceX's Starship project to the revolutionary introduction of shipping containers. Just as standardized containers transformed global trade, the commodification of orbital payload launches creates vast new opportunities, with significant growth projected over the next decade.
The Power of Constellations
One of the most compelling shifts in space technology thinking involves moving from single-sensor to constellation-based approaches. Instead of asking "How do I solve this with one exquisite instrument?" the question becomes "How can I solve this problem with a large array of sensors that, while slightly lower in quality individually, produce much more useful data together?"
This paradigm shift has far-reaching implications, as space data finds downstream applications across almost every industry. The multiplicative effect of constellation-based systems creates opportunities that simply didn't exist with traditional single-sensor approaches.
Key factors in the Space Economy
For entrepreneurs eyeing the space economy, Anderson suggests focusing on "known unknowns" as the most direct path to breakthrough innovations—a classic blue-ocean strategy approach. However, he emphasizes a crucial point: success requires understanding the interplay between commercial market forces and government policy. The regulatory landscape can make or break space ventures, making it essential to consider the broader context when developing space-based solutions.
He also suggests that companies who begin with government customers in mind are more likely to succeed in their efforts before spinning off products and services to the broader public markets
Looking Ahead
The space economy represents a fascinating intersection of established infrastructure and emerging opportunities. While GEOINT and SATCOM have already proved their value, new industries are emerging that could reshape our relationship with space-based technologies and services. The transformation of space from a government-dominated domain to a vibrant commercial marketplace offers exciting possibilities for innovation and growth.