Space Policy Development Via Macro-Economic Analysis

Executive Summary

Many experts agree that the space industry will be important to the future economic growth and stability of the United States. However, maintaining its role as a global leader will require that the United States establish national space policies that can deliver measurable economic results in the near term while developing value-added capabilities to support future scientific and research objectives. The success of such policies will require industrial and national leaders to break away from paradigms that have driven our space policy development for the past 40 years. Traditionally, space policies of the past have suggested that the nation prioritize spending large amounts of money on exploration objectives, and that accomplishing these objectives will automatically allow a commercially independent sector of the space industry to develop. While this approach in unmanned space flight has succeeded in establishing a commercially based market, we find that the manned markets have been slow to mature. This report analyzes the space industry from macroeconomic perspectives to assess the effectiveness of the current space policy. Further, we examine other relevant industry models to reveal insights to the developmental difficulties faced by manned space flight. We finally evaluate the role of government within successful industries to determine if any deficiencies in our current space policy can be resolved. From our analysis we conclude that the space industry consists of commercial, scientific and military sectors that incorporate manned and unmanned operations. Though unmanned space flight has matured into a viable enterprise, manned space flight suffers an untenable weakness, due to the fact that there are no commercially based entities within this market that are independent of government-funded programs. To generate growth within the manned space flight industry, we must establish space policies that are developed through analytical methods based on realistic industrial models. The current space industry as a whole is functionally modeled after the airline industry. However, when we apply macroeconomic methodologies specifically to orbital, manned space flight market, we find that the airline industry model does not support orbital, manned spaced flight sufficiently to promote commercial growth. Examining the automotive and cruise line industries, however, we find a closer parallel to orbital, manned space flight, as well as government agencies that have limited responsibilities for emergency response. From a macroeconomic analysis of orbital, manned space flight costs, we find that safety and reliability are the major driving cost factors within the entire space industry; yet again, there is no capability within our current industrial model to address these issues. Without addressing these underlying factors, the cost structure across the orbital, manned space industry cannot be optimized, preventing the growth of an independent commercial sector download