Read the newspaper headlines and you may be forgiven for thinking that the commercialisation of space is all about extra-terrestrial tourism (and the boosting of billionaires’ egos). After Elon Musk’s Space X and Richard Branson’s Virgin Galactic, Jeff Bezos – founder of Amazon – announced on Monday that July 20 will mark the inaugural flight of his Blue Origin venture. In a further publicity boost, he and his brother will both be on board. There’s one spare seat going spare, currently available for $3.5m…
While news of this sort naturally captures the imagination – your author wanted to be an astronaut aged five – the reality of space is both more mundane but also more critical to how the future will evolve. Forget tourism; space is all about big data. Think of it like this: in 1985 it apparently cost close to $85,000 to send a kilogram of payload into space. Now, the cost of sending the equivalent weight has come down by a factor of at least 100. It is continuing to fall further. This insight was shared with us in a recent conversation we had with Mark Boggett, the Chief Executive of the Seraphim Capital, a leading venture capital player in the field.
If this view is correct, then it logically follows that the number of satellites in space will grow. Their presence will allow for the creation of “a digital infrastructure in the sky”, in the words of Boggett. Space currently contains fewer than 10,000 satellites, per Seraphim, but this figure could reach 100,000 by the end of the decade. Many of the future trends about which we have written elsewhere – the data deluge, automated vehicles, smart factories and an increasingly large internet of things – will see the production and consumption of huge quantities of data. A satellite infrastructure provides one (part of the) solution. Seraphim estimates that the amount of data generated in space currently is equivalent to 25% of that produced by Facebook. By the end of this decade – if the infrastructure is built – it could be 50 times the size of Facebook.
The good news for investors is that it seems as if governments are outsourcing much of the commercialisation of space to the private sector. The reasons for this are multiple: bureaucracy, complex procurement processes and other priorities (note, for example, NASA’s recent announcement about Venus missions for the first time in two decades – presumably to demonstrate leadership relative to other nations) mean that private businesses can often bring projects to market more quickly. No pun intended but watch this space for further developments.
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