However, recent growth strategies in this industry suggest that the private sector have leaned towards M&A-focused approaches4 rather than in-house research initiatives. The previous decade of the private sector was composed mainly of NewSpace companies developing end products and technologies for organic growth.The rise of space-focused investment funds and venture capital arms of traditional aerospace companies not only suggest private sector consolidation but incentives for being in a position to scale the R&D efforts for value creation. For example, AE Industrial Partners, a private equity group, launched a joint venture fund with HorizonX, Boeing’s venture arm. AE Industrial Partners also formed Redwire, a holding company that has acquired a number of high profile startups including Made in Space and Techshot, who both provide additive manufacturing solutions in micro-gravity, as well as companies with spacecraft and launch system capabilities.To support research development, a natural evolution toward fostering collaboration between the private and public sector could, if properly designed, provide a superior research and development platform to increase the probability of successful breakthroughs. Traditionally, NASA has largely acted as the sole public partner for most space-related public-private partnerships.
The next natural step from NASA contracting with private companies is the establishment of a public-private research and development partnerships with an expanded scope for the public dimension including the possible codification of major discoveries. PPRDPs provide a diversity of cultures of research,vertical tower planter which might be in some cases the key ingredient to breakthroughs. Government agencies traditionally follow “invented and built here” approaches, which cannot keep with the pace of innovation of the private sector. The private sector carefully tries to optimize between productivity and adherence to government standards they might not need. Universities has unique ways to use commercial products for fundamental science discoveries different from government and industry methodologies. The inclusion of universities and fundamental research institutions as additional public partners may increase the likelihood of discovering tipping-point technologies and other research discoveries. With the rise in space-related research grants and human capital development offered in university degree programs, universities could expand the public dimension of NASA to offer valuable intellectual property and more opportunities for agglomeration externalities. In this article, we first provide a historical evolution that demonstrates NASA’s shift towards a collaborative research and development process to accomplish their research agenda and mission operations in section 2. Relevant legislation and NASA funding has introduced a host of new entrants within the private sector along with funding for more active R&D programs.
In section 3, we outline public and private sector activities pertaining to major innovations that may occur within a 20-year horizon that will be instrumental in capturing the growth possibilities of the space economy. In section 4, we evaluate PPRDPs and the incentives of each partner using an emerging case study, as well as consider a novel form of governance to administer PPPs. The 1957 Sputnik crisis prompted the passage of the 1958 National Aeronautics and Space Act, which restructured the wartime-focused National Advisory Committee for Aeronautics to the National Aeronautics and Space Administration , absorbing four major research laboratories in the process. The 1958 Act also established “Space Act Agreements,” which allow NASA to contract with any entity to fulfill programs and projects. After finding considerable success in the Apollo program, the 1984 Commercial Space Launch Act recognized that the private sector was capable of developing and operating spacecraft and satellites. While regulatory guidelines and economic incentives were developed in later amendments, NASA was in a position to foster space entrepreneurship . Pressured by European post-war aspirations for technological independence from the US , leading to the emergence of Arianespace, a European launch company protected by the European Union from unlimited liability, the 1988 Commercial Space Launch Amendments Act was the first federal law to provide indemnification and financial support for commercial space companies.
The act also directed the Administrator of NASA to design a program to support research into launch systems component technologies to develop higher performance and lower costs for commercial and government launches. Following the 1998 Commercial Space Act, a critical turning point for the engagement of U.S. private industry came with the passage of the 2004 Commercial Space Launch Amendments Act. The Federal Aviation Administration ’s Office of Commercial Space Transportation issued experimental permits that allows private companies to test new types of reusable suborbital rockets. This was an initiative to allocate opportunities to other private companies other than United Launch Alliance composed of the Boeing and Lockheed Martin, which dominated the NASA private sector contracting, whose value exceeded over $12 billion . Not only were indemnification extended to 2015 but the 2004 Act created a “learning period” for commercial spaceflights, prohibiting the US Department of Transportation from issuing safety regulations beyond the informed consent regime, in which safety requirements for commercial human spaceflights were limited to informed and written consent to undertake the risk of space travel. This meant private companies could generate revenue by taking on passengers without having to deal with liability issues, allowing for the rise of space tourism companies . With the rise of newly engaged commercial space companies with technologies capable of launch and spaceflight operations, NASA fostered private entities with its Commercial Orbital Transportation Services program , which provided contracts for space companies to demonstrate cargo delivery to the International Space Station , with a possible contract option for crew transport. Otherwise, NASA would not be forced to purchase orbital transportation services on foreign spacecraft since NASA’s own Crew Exploration Vehicle would not have been ready until 2014.
With the successes of SpaceX9 and Orbital Sciences’10 cargo delivery missions, in 2012, NASA was no longer purchasing any cargo resupply services from Russia and would rely mainly on the SpaceX Dragon and Orbital Sciences’ Cygnus.The success of the COTS program allowed the 2008 Commercial Resupply Services program to contract more commercial entities to make deliveries to the ISS. The first phase of the CRS program awarded SpaceX $1.6 billion for 12 cargo flights and Northrup Grumman $1.9 billion for 8 cargo flights. The second phase of the CRS program has contracted 15 missions with SpaceX, 14 missions with Northrup Grumman, and three missions with Sierra Nevada. The most recent commercially operated space transportation program,lettuce vertical farming the 2011 Commercial Crew program, has awarded numerous companies, including Blue Origin, Boeing, Paragon Space Development Corporation, Sierra Nevada, and United Launch Alliance in its first development phase. In its second phase, Blue Origin, Sierra Nevada, SpaceX, and Boeing were awarded contracts for various enhancements to its respective spacecraft. In its third phase, NASA requested proposals to have complete, end-to-end concepts of operation, including spacecraft, launch vehicles, launch services, ground and mission operations, and recovery. Sierra Nevada’s Dream Chaser/Atlas V, SpaceX’s Dragon 2/Falcon 9 and Boeing’s CST-100 Starliner/Atlas V were awarded contracts. The Commercial Space Launch Competitiveness Act of 2015 solidified NASA’s reliance on the private sector by extended indemnification to 2025 and the learning period to 2023. The act also delegated property rights to private companies that mine resources from celestial objects , providing another incentive for private space expansion. NASA’s most recent endeavor, the 2017 Artemis Program, aims to construct the Lunar Gateway, a space station in lunar orbit. Blue Origin, Dynetics , Lockheed Martin, Northrup Grumman, and SpaceX were awarded contracts. Space venture capital activities have skyrocketed following NASA’s commercial dependency; in 2021, $17 billion were globally invested into 328 startup companies, close to doubling the previous record of $9.1 billion in 2020. In total, space-related companies have attracted over $264 billion in 1,727 unique companies since 2013 . The available evidence makes it clear that NASA has created much in the way of incentives for the private sector to actively engage in R&D, helping to solve many of the obstacles that arise in such efforts to expand the knowledge base for space exploration. A significant barrier to the full development of a space economy is the capacity to support space mobility. In the last two decades on earth, the convergence of electrification, computation, communication, control and sensing on mobile devices and vehicles has enabled the self-driving industry to emerge and the shared economy to become a reality. In a similar manner, the space economy cannot function without propulsion, launch systems and space logistics, which are all part of a new space mobility ecosystem to be created. The development of such a mobility ecosystem relies both on advances of specific technologies and new network paradigms . High barriers to entry into the space industry stemming from high transportation costs and extreme risk management currently remain. Technological advancements in the launch system industry, however, have shown great potential to scale such costs: a payload from SpaceX’s reusable Falcon 9 rocket costs approximately $2,700/kilogram, compared to a conventional nonreusable rocket and the 1981 Challenger space shuttle.
SpaceX’s Falcon Heavy rocket, in which a payload will cost ~$950/kg, is projected to save NASA an estimated $548 million for their 2024 Europa Clipper mission . Another entrant in the launch industry, Relativity Space, produces autonomous and additive manufactured reusable rockets that are projected to decrease costs even more; they have already presold more launches than any other company since SpaceX. While launch costs are already 40x lower than in 1981, some preliminary estimates price launch costs to approximately $100/kg by 2040 . Such potential to reduce barriers to entry can effectively unlock a stream for economic growth by creating more opportunities for technological innovations within the space industry’s value-added chain. Because this ecosystem is still nascent, some companies like Qosmosys are currently building ZeusX vehicles to be launched in 2026, with capabilities to mine Helium 3 on the moon for missions spanning 10 years each. There is currently no way to bring this precious cargo back, but the companies are working under the assumption that this ecosystem will exist by 2038 after the first mining mission is completed. In this nascent ecosystem, ZeusX moon spacecraft is compatible for a launch with Falcon Heavy, New Glenn, Vulcan or Ariane 64, as an illustration of the start of a logistics chain to be incrementally developed in the decades to come. While launch and other transaction costs are declining, the most efficient mode of production of goods for in-space consumption is in space production. There also exists an exigency for building an in-space manufacturing infrastructure to circumvent wait times and reducing risk for vital equipment during missions.This may have future significance in making long-distance explorations as well as long-term visits feasible . ISM requires manufacturing techniques that with more control over the drastically different environmental factors of outer space . Subsequently, novel processes have emerged to acclimate to such conditions. Companies such as Made in Space have used fused deposition modeling and injection modeling to 3D print complex parts, such as finger splints and ventilator regulator valve. Faraday Technologies and Moon Fibre produces covetic materials, or carbon nano-alloys that can be used for spacecraft and satellite components due to its efficient thermal conductivity . Within public and university research, through a grant awarded by the U.S. Department of Commerce, University of New Hampshire, in partnership with Purdue University, the University of Alabama and NASA, will focus on developing equitable industrialization of ISM by analyzing technical and commercial gaps . The greatest challenge, however, is shipping the actual 3D printing machines, the resupply of feed stock and other input resources; because such equipment consumes considerable space and weight on cargo resupply missions, the high-cost factor inhibits scalability. Tethers Unlimited also focuses on ISM with their Trusselator, but also has invented the Refabricator to reduce resupply needs by recycling plastic waste into feed stock for 3D printers. Made in Space is also attempting to bypass the “tyranny of the fairing,”in which payloads are limited in size by the nose cone of a rocket, with the invention of the Archinaut, a satellite capable of 3D-printing itself. After successful launch and orbit in space, the Archinaut will autonomously manufacture and assemble its solar panels; if successful, future payloads will not be limited by size.