The Race to Space
How to achieve profitable growth in an accelerating space economy
Dr. Georg Heinecke | Joachim Kirsch
Mar 2023
| White Paper
| English
The Race to Space
How to achieve profitable growth in an accelerating space economy
For decades, spaceflight was dominated by a conservative, government-sponsored industry, rarely making the headlines. Today, space industry is experiencing its biggest disruption since the 1960s: With new business models, unprecedented technologies, smart manufacturing and calculated risk-taking, the ecosystem is gradually changing its market conditions. The industry is at a crossroads: either it takes off or it returns to its niche existence. In short: "Boom or bust"?
The Strategy Paper takes a look at current market dynamics and explores new business opportunities created by global connectivity and Earth observation. It presents success factors for building a space service as well as possible business strategies how to successfully position a company along the value chain and differentiate from competitors.
Management Summary
- The space economy offers enormous potential for incumbents and newcomers alike, as it will grow from $400 billion in 2020 to over $1 trillion by 2030 on the back of megatrends like connectivity, sustainability, and climate protection.
- The hype around the space industry is justified, as industry culture and economics have changed dramatically – including lower system costs, more capable technology, and a well-funded start-up ecosystem to build new services.
- On the revenue side, the service must be positioned in a relevant market, designed to be “sticky,” and employ a smart go-to-market strategy to quickly monetize.
- On the cost side, the service needs to employ an end-to-end approach along the space value chain to optimize top cost positions: hardware, launch, ground segment, and service operation.
- However, companies should be careful to follow this strategy by default, as it might jeopardize the current market positioning and perception as well as overstretch internal resources and budgets.
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