Home Investments #SpaceWatchGL Opinion: What is the real annual generated revenue of the space industry? PART 1

#SpaceWatchGL Opinion: What is the real annual generated revenue of the space industry? PART 1

by Ozva Admin
Photo Credit: WEME Global

By Sabine Pongruber

Being part of a growing economy is where you want to be these days. And Space promises to be among one of the fastest growing sectors, with huge potential for contagion to other industries.

Currently, the space economy has been estimated to have around $386 billion in revenue, with expectations predicting it to be $1 trillion by 2040. The prospects are attractive, and by moving within the space sector, one could have booming space business impression. . But are those numbers legitimate?

According to various financial reports published in 2022 and market analysis on the space industry (Bryce technology, CITI-GPS, Deloitte, just to name a few), the space sector will continue to grow. The European Space Policy Institute (ESPI) publishes investment capital figures for new spaces in 2021 showing that capital inflows are supporting assumed growth predictions.

However, as an economist, I am used to looking at the big picture. And as a management consultant, I know the devil is in the details. So let’s get to the bottom of financial estimates: where do these numbers come from? What specific subfields are drivers? Will it be possible to reach the projected trillion dollars in revenue in less than 20 years?

Who dropped the $1 trillion figure first?

Morgan Stanley, there for your 2017 report “Space: investment implications of the last frontier”, was one of the first to predict a $1.1 trillion market by 2040 with an annual growth rate of 5%. These data are supported by figures established by the Satellite Industry Association (SIA). The United States Chamber of Commerce established a similar range. UBS bank remained a bit conservative in its approach and came in just below 1 trillion ($926 billion to be precise) by 2040. At the same time, Goldman Sachs Equity Research predicted a multi-billion dollar marketand just a year later, in 2018, Bank of America Meryl Lynch launched a Press release predicting a market of 2.7 billion within 30 years. In 2020, the US Institute for Defense Analysis in its “Projections for the future size of the space economy” provided an overview of the space economy by summarizing all published numbers. The numbers have changed only slightly since then, with 1 trillion prevailing as the widely accepted achievable but challenging target for 2040.

Interestingly, the starting point and baseline for all of these predictions were figures from the 2016 Space Economy dataset, compiled and analyzed by these same institutions and published in 2017. Remarkably, the figures showed that back then (2016) the space economy was estimated to be at $340 billion (USB, Morgan Stanley, Goldman Sachs, Bank of America), just shy of the total market value of Apple or Aramco today.

If our starting point in 2017 was $340 billion, and with the projected 5% annual growth rate to get to $1 trillion, we should have been at $434 billion by 2021 and $456 billion by the end of 2022. Yet today the space domain is valued at roughly $386 billion in global revenue. So what happened?

Here is a catch. When Morgan Stanley published and talked about the “space economy”, what they meant was the “Satellite Industry Revenue”, and this becomes clearer once you delve into the details of the report. I assume that all other reports were based on this revenue figure of 340 billion.

The numbers showed that back then (2016) the space economy was estimated at $340 billion… today the space domain is valued at roughly $386 billion in global revenue.

In 2020, Morgan Stanley changed its initial predictions, hinting that the space economy may be greater than 1 trillion by 2040. This suggests that they probably added all other space-related fields to the satellite business as well.

Where are the revenues?

Photo Credit: Unsplash

The answer is: we don’t know exactly. To understand where we are today, we would need to recalculate the 2017 baseline of $340 billion and all subsequent accompanying numbers, and this proved to be a challenging task. Due to a lack of references and limited knowledge of how the numbers were initially calculated, it is difficult to compare the 2017 predictions with the actual performance of 2022. Not many space companies are publicly traded, which means that knowledge of the revenue generated are limited, and drawing some broad conclusions about the overall performance of the space economy becomes challenging. Also, which companies qualify to be used as an index for the measurements? What is the definition of a space company? Does it include someone like Uber, who applies downstream satellite data to run their business, or is it just the satellite manufacturer, launcher, or operators? These are questions and limitations that unfortunately the various reports did not specify, or we, as a space economy, have ultimately not answered.

Not many space companies are publicly traded, which means that insights into the revenue generated are limited, and drawing some broad conclusions about the overall performance of the space economy becomes challenging.

One source for determining the industry’s overall growth rate is venture capitalists, who publicly share their investment deals. The flow of capital is also transparent for institutions such as the European Fund for Strategic Investments (EFSI) and the European Investment Bank (EIB). However, these are investments and not income, and revenue is the only data that matters at the end of the day to measure business and economic performance.

Tracking income becomes even more complicated if we try to follow the military sector. The civil sector does not know how much money governments invest in space technology and how much money they make selling it to other nations. These numbers will remain an estimate and it is highly unlikely that the public will ever get transparency.

Therefore, the question remains: what is the real annual revenue generated by the space industry? And will we hit $1 trillion by 2040?


Bank of America Merrill Lynch: Space Industry Will Be Worth Nearly $3 Trillion in 30 Years, Predicts Bank of America, October 2017, https://www.cnbc.com/2017/10/31/the-space-industry-will-be-worth-almost-3-trillion-in-30-years-bank-of-america-predicts.html
Bryce Tech:Start-Up Space UPDATE ON INVESTMENT IN COMMERCIAL SPACE ENTERPRISES, April 2022, https://brycetech.com/reports/report-documents/Bryce_Start_Up_Space_2022.pdf
CITI GPS: SPACE: Dawn of a new era, May 2022, https://icg.citi.com/icghome/what-we-think/citigps/insights/space_20220509
Deloitte: The Commercialization of Low Earth Orbit, Volume 1: Now is the Time, Spring 2022, https://www2.deloitte.com/content/dam/Deloitte/us/Documents/public-sector/us-gps-the-commercialization-of-leo-vol-1-the-time-is-now.pdf
European Space Policy Institute (ESPI): Space Venture Europe 2021, June 2022, https://www.espi.or.at/reports/space-venture-europe-2021/
Goldman Sachs: Space: The Next Investment Frontier, May 2017, https://www.goldmansachs.com/insights/podcasts/episodes/05-22-2017-noah-poponak.html
Morgan Stanley: Space: Investment Implications of the Final Frontier, November 2017, http://commercialspace.pbworks.com/w/file/fetch/128577051/2017-11-01%20Morgan%20Stanley%20Space_%20Investment%20Implications%20of%20the%20Final%20Frontier.pdf
UBS Long-Term Investment: Space, November 2018, https://www.ubs.com/content/dam/WealthManagementAmericas/documents/space-p.pdf
US Institute for Defense Analysis: Projections of the Future Size of the Space Economy, 2020 https://www.jstor.org/stable/pdf/resrep25331.7.pdf


The opinions expressed in this article are the sole responsibility of the author. The author or his affiliated companies have no commercial or financial relationship of any kind with the companies or institutions mentioned above.

Sabine Pongruber; Photo courtesy of WEME Global

Sabine Pongruber is a manufacturing and energy industry veteran, having spent 16 years in global leadership roles at General Electric. In 2019 he founded WEME Global, a management consulting company to drive client growth by expanding operations and elevating operational excellence through agile and efficient processes. Since 2022 he is venturing into the space industry, building bridges between established industries and new space. He lives in Salzburg and spends most of his free time in the mountains. That’s the closest you can get to space for yourself, she says.

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