The state is stepping back into space

Horizons article
·
June 4, 2024

Recent events show a shift in the development of space. While initial expectations leaned heavily towards a commercial-driven era, international conflicts have pushed governments to redirect their attention towards space. Historically, such government intervention is likely to lead to more, not less, technological innovation.

Throughout history, periods of international conflict have propelled rapid advancements in technology. World War II, for instance, catalyzed developments in radar, jet engines, and nuclear weaponry, while the Cold War era fueled advancements in space exploration, computing, and the internet.

Until recently, most experts anticipated that the "Third Space Age" would be dominated by commercial enterprises, driven by the rapid growth of private firms like SpaceX. This surge has resulted in lower costs, more countries joining the space race, and a greater variety of objects being launched into space. See the graph below:

Source: Our World in Data

However, amidst escalating international conflicts, space technology such as satellites and rockets are drawing increased government attention, likely resulting in greater government intervention. In recent years, from the United States to Europe, the state has re-entered the space sector. The war in Ukraine is likely to accelerate this trend:

  • In 2019, the US established Space Force, its first new independent military service since the U.S. Air Force in 1947. Since then, Space Force has been tasked with collaborating with private firms. For example, an exercise called Victus Nox showed that Space Force could mount and launch a new satellite within about a day, down from a typical 6-12 months, enabled by tapping into commercial technology.
  • In May 2024, the European Space Agency launched an initiative to develop a European counterpart to SpaceX, selecting two companies to pioneer commercial cargo services to the International Space Station.
  • In the Ukraine war, satellite technology has assumed a crucial role. Russia has successfully jammed Starlink, reduced the hit rate of advanced US precision guided missiles (which are connected to satellite) to less than 10% (leading the Ukrainian army to stop using these expensive ammunitions) and Russia is rumored to have developed a nuclear-powered anti-satellite weapon that could be launched into orbit.

As the state re-engages with space, technologies like satellites and rockets are likely to see increased government intervention, primarily through fiscal support. This shift would make space technology part of the broader push towards autarky, similar to recent developments in the energy and semiconductor industries. Coupled with a thriving commercial sector—exemplified by SpaceX's new vehicles that could reduce the cost per kilogram to low Earth orbit by 50–80 times—significant technological advancements are likely in the coming years. This progress could be further accelerated by industry consolidation, such as SES's recent acquisition of Intelsat.

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