How big is 'the space economy'? Confronted with endless discussions I decided to publish a paper on linkedin to discuss the matter, from an economist perspective. Please read the full paper. The highlights are provided in the thread below. 1/7
linkedin.com/posts/eurospac… Image
The space economy in 2020 was about 300 B$ in value. This value is assessed by consolidating the revenues between the upstream and the midstream players, and only considers the measurable value of the induced markets (in the downstream). 2/7 Image
The infrastructure market originates with a demand for space systems supported by a revenue base worth 125B (50+60+15). The demand is supported by two different drives: Public demand with resources worth 110B and commercial initiative worth 15B. 3/7 Image
Public demand is driven by the requirement for a space service (in science, meteo, observation, communications... for civil and military users). An important portion (20 to 30%) of that budget funds R&D within the agencies themselves, but also within the manufacturing sector. 4/7
Commercial initiative is spurred by the existence of a commercial demand for space products, data and services, that justifies the deployment and operations of space infrastructure. This demand is in the order of 15B, of which 12B are for communications services. 5/7
The demand for space infrastructure enables a supply of spacecraft, launchers, launch services, and ground infrastructure provided by the space manufacturing sector (the upstream sector). It is worth 85B, and is unevenly split between launch, spacecraft and ground systems. 6/7 Image
The satellite services are sold by satellite operators for a market value of 15B, and are provided for free by the civil and military agencies. They induce a market for terminals that may be worth 83B worldwide and a market for value added products and services of 84B. 7/7

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More from @LionnetPierre

7 Sep
We have modelized the economic equation of @SpaceX as a launch service provider (leaving aside Dragon, Starship and Starlink) with a view to uncover its cost and profit drivers. The idea was to use Falcon 9 as a benchmark for testing the economics of launcher Reusability. 1/18
The full research paper is available at linkedin, please read it to understand the assumptions and limitations. The key findings and highlights are posted in this thread. 2/18
linkedin.com/posts/eurospac…
We find that there is a very strong correlation between gross profit and launch cadence in launcher economics, in other words: without a sufficient volume of launch the launcher cannot be profitable, reusable or not. 3/18
Read 18 tweets
25 Aug
I think that I need to discuss launch costs (again), because I keep reading the same bullshit such as: "Over the past decade, launch costs have been lowered by an order of magnitude, thus laying the foundation for the emergence of a new, expansive space economy." 1/9
This assertion from "an integrated strategic and financial services boutique" is wrong because "launch costs" have not been lowered by "an order of magnitude" - furthermore, as all economists know, the price elasticity of launch demand remains an elusive subject. 2/9
So what is launch cost? In its simplest form it is the unit price of a launcher. Once eliminating the Space Shuttle from the series, the trend looks like this. We can see that in average the launcher unit prices have decreased by a factor 2 to 3 in 30 years. 3/9
Read 9 tweets
2 Aug
I have had a look at the SEC filings for @SpireGlobal, and I tried to understand what was the unit cost of the Spire satellites. Not an easy task... a thread. 1/16
In the SEC registration documents you can find a table listing the company property value and the related D&A. There I see that 'Satellites in service' represent 26,2M$ (p. F-43) 2/16
sec.gov/Archives/edgar…
Let me assume that 'Satellites in service' are only those 3 years old or less in 2020, i.e. 62 satellites at end 2020. That is giving me a value per satellite in orbit of 420k$, launch included. But how much did @SpireGlobal pay for launch? 3/16
Read 20 tweets
27 Jul
What's going on at @RocketLab? Apart from a seemingly toxic work environment, two recently published financial reports give us a hint of @RocketLab economics and how it is losing money consistently on every launch, despite NZ government financial support. A thread. 1/14
First a look at the financials of @RocketLab USA and of @ Rocketlab NZ in USD, and in NZD (in 2020 1 NZD=0,63 USD) 2/14
The notes to the NZ financial statements explain that @Rocketlab NZ provides services at a margin cost to the USA parent company. And indeed we have 66 MUSD worth of expenditures at @RocketLab US that match the 90 MNZD worth of revenues of @RocketLab NZ (at 2020 rates). 3/14
Read 18 tweets
23 Mar
A thread: Newspace companies founding chronology is it a typical hype cycle? 1/13
Among the easiest information points to find about newspace companies is the founding date. I thought it would be interesting to create a chronological map of the upstream and midstream companies in my list, and align it with the current level of employment in the companies. 2/13
This last bit of information is of course less easy to find, to the point that it may seems that employment figures are a taboo in the start-up environment. 3/13
Read 15 tweets
18 Feb
@SeraphimCapital recently issued its intersting 2020/Q4 Space Index, seraphim.vc/wp-content/upl… highlighting "private investor’s unprecedented appetite for Spacetech". Now, looking at the data I would like to understand where Seraphim sets the boundary for "Space" 1/6
Indeed when looking a the list of Q4 'mega deals' provided by @SeraphimCapital I am surprised to see two companies whose business is not "space" at all. They are Joby Aviation (Air taxi, formerly Uber Elevate) and Percepto (autonomous robots and drones). 2/6
I do understand that these companies will make use of space based services such as GNSS and/or remote sensing data, but labelling them 'Space' is an exageration. With the same reasoning, shall we now consider that Deliveroo and Uber are part of the space sector? 3/6
Read 7 tweets

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