Context: A recent report released by the World Economic Forum (WEF) and McKinsey & Co projects the global space economy to reach a value of $1.8 trillion by 2035, showcasing significant growth potential and diverse applications across industries.

Key Findings

Ubiquity of Space Technologies

• Space technologies are increasingly becoming integral to various industries, including food and beverage, retail, transportation, and climate disaster mitigation.

• Reduction in costs and enhanced accessibility are driving the adoption of space technologies, potentially reshaping entire industries akin to the impact of smartphones or cloud computing.

Diversification of Investments

• The report highlights the growing commercial innovation in space technologies, leading to diversification of investments and applications across different sectors.

• Earth observation satellites and data derived from them are anticipated to revolutionize numerous industries, contributing to economic growth.

Impact on Existing and Emerging Industries

• Space-enabled technologies have facilitated the emergence of new industries and services, such as telecommunications and ride-hailing apps.

• Over 60% of the projected increase in the space economy will stem from industries reliant on space technologies, including consumer goods, defense, and lifestyle sectors.

Addressing Global Challenges

• Beyond revenue generation, space-enabled technologies are poised to play a crucial role in tackling global challenges such as climate change.

• Applications like disaster warning systems, climate monitoring, and resource management through Earth observation satellites are highlighted as key contributions to mitigating global issues.

Drivers of Space Economy

Cost Reduction in Launches

• Significant reductions in satellite and rocket launch costs have occurred over the past two decades, fostering increased accessibility to space technologies.

• The launch costs of satellites and rockets has fallen 10-fold over the past 20 years.

• The price of data and connectivity is also expected to drop by at least 10% as demand increases by 60% by 2035.

Commercial Innovations

• Ongoing commercial innovations, such as enhancements in Earth-observation technology, are driving down costs and expanding accessibility to space-based applications.

Growing Investor Interest

• The burgeoning interest from investors in the space sector is spurring diversification in space-based technologies and activities, including space tourism.

Cultural Awareness and Enthusiasm

• Rising cultural awareness and enthusiasm for space exploration are fostering interest among future generations, driving continued growth and innovation in the sector.

Key Recommendations

• Non-space industry leaders should collaborate and invest in technology innovators to leverage their expertise and accelerate advancements.

• Space industry leaders should consider adopting a "space for non-space" strategy, exploring ways to apply their expertise and technologies to non-space sectors.

• Co-create protocols and standards to ensure interoperability and efficiency across industries, facilitating seamless integration of technologies and solutions.

• State-sponsored leaders should enact legislation, standardization, and policies to support the growth of emerging industries and ensure regulatory clarity.

• Foster partnerships across state-sponsored agencies to leverage resources, expertise, and networks, driving collective progress and innovation.

India’s Space economy

• India's space economy is valued at around $8.4 billion, which is 2-3% of the global space economy.

• The sector is projected to reach $13 billion by 2025, and $44 billion by 2033, driven by the implementation of the Indian Space Policy 2023.

• The amended Foreign Direct Investment (FDI) policy permits 100% FDI in the space sector.

• The policy's liberalized entry routes are designed to attract potential investors to invest in Indian companies operating within the space industry.

Recent initiatives to promote space economy

• Indian Space Policy 2023: Allows non-governmental entities (NGEs) to participate throughout the space industry

• Foreign direct investment policy for space startups: Allows 100% automatic investments in space component manufacturers, and 49% in rockets and space launch service providers

• The Indian National Space Promotion and Authorization Centre (IN-SPACe) was established as an independent nodal agency under the Department of Space.

• New Space India Limited was created to facilitate private sector participation in the space industry.