About the Book
Space is not a fringe industry of terrestrial economic activity; it is also not a land of fantasy where the fundamental laws of economics don't apply. Space is simply a medium: a vast Universe full of resources to be explored, a vast ocean connecting stars and planets.
Today, space is serious business, but it’s nowhere close to its true potential. Our perception of our surroundings is undergoing a major transformation: astronomers are discovering new exoplanets almost every week. Cosmos is teeming with new destinations to explore. In this sense, space is not just an Earth-bound market or industry, it’s a host of technologies, know-how and new destinations; it’s our vessel to explore the Universe.
This book is a must read for anyone interested in the economic and business aspects of space. Topics covered include:
- The Space “Value Chain”
- The Economic Footprint of Space
- Seven Distinguishing Features of Space Business
- Socio-economic Benefits of Space Activities
- Emerging Space Markets
- Key Issues and Challenges in Space Business
- Risk Management
- Cost Management
- Top Ten Things to Know about Space Business and Economics
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Table of Contents
Chapter 1: Introduction to Space Business and Economics
- Physics Enables, Politics Dictates, Economics Sustains
- Guide to Contents
- Definition of Key Terms
- Notes
Chapter 2: Understanding the Nature of Space Business
- Review of Key Concepts
- The Fundamental Forces of Economics: Demand and Supply
- Elasticity of Launch Services
- Cost Versus Price
- The Space “Value Chain”
- The Economic Footprint of Space
- Satellite Applications: Meet the Three Musketeers
- Satellite Telecommunications
- Global Navigation Satellite Systems
- Remote Sensing
- Big Data and Satellite Applications
- Notes
Chapter 3: Seven Distinguishing Features of Space Business
- Cyclical Nature
- Linkage to Defense
- Government as the Main Customer
- The Destination Problem
- Limited Competition
- Long Investment Horizon
- The Curse of the Single Unit of Production
- Case Study: Iridium and the Lessons Learned from Terrestrial
- Competition
- Notes
Chapter 4: Socio-Economic Benefits of Space Activities
- Three Main Types of Benefits
- Direct Industrial Benefits
- Spin-offs
- Societal and Intangible Benefits
- Measuring the Economic Impacts of Space Programs
- A Deeper Look at Spin-offs
- Case Study: On Stardust and Dollars
- Notes
Chapter 5: Emerging Space Markets
- Emerging Sectors
- Space Tourism
- On-Orbit Satellite Servicing
- Private Space Exploration
- Notes
Chapter 6: Key Issues and Challenges in the Space Business
- High Cost of Access to Space
- Limited Access to Financing
- Inadequate Use of Marketing Tools
- Public Outreach
- Globalization and Consolidation
- The Changing Role of the Private Sector
- Space Debris
- Replacing Generation Apollo
- Notes
Chapter 7: Risk Management
- Defining Risk
- Risk in Space
- Types of Risks
- Modeling Risk
- Risk Matrix
- Event Tree
- Hazard Scales
- Managing Risk
- Testing and Redundancy
- Diversification: Towards a Portfolio-Based Approach
- Risk Transfer and Insurance
- Case Study: Nuts and Bolts of Risk Management
- Notes
Chapter 8: Cost Management
- Cost Analysis and Management
- A History of Cost Overruns
- Cost Estimation Methods
- Costing by Analogy
- Bottom-up Costing
- Parametric Costing
- Cost of Major Space Programs
- Contract Management: The Heritage from the Defense Industry
- Cost Management in the Private Sector
- Public-Private Partnerships (PPP) as a Cost-Sharing Mechanism
- Case Study: Does Anybody Actually Know the Cost of the ISS?
- Notes
Chapter 9: Putting It All Together: Assessing the Feasibility of a Space Venture
- Market Overview for OOS
- Defining the Business Model
- Understanding the Supply Side
- Understanding the Demand Side
- Is There a Match Between Demand and Supply?
- Risk Analysis
- Running the 5Ps of Marketing
- Pricing
- Physical Distribution
- Promotion
- Product
- Philosophy
- Notes
Chapter 10: Conclusions
- Top Ten Things to Know About Space Business and Economics