SpaceX’s Historic Manned Launch Points To Bigger Opportunities For American “New Space” Companies

It is nothing short of a banner week for the renascent U.S. space community, coronavirus complications notwithstanding. On Memorial Day, a team from Richard Branson’s Virgin Orbit flew a modified 747 nicknamed “Cosmic Girl” out over the California coast, attempting to send a payload to orbit with its all-liquid fueled LauncherOne. While this first launch did not succeed, Virgin’s Dan Hart observed that the company would learn from the failure and try again in short order: “Our next rocket is waiting.”

On May 27th, a crewed American spacecraft is expected to launch from Kennedy Space Center’s Launch Complex 39A. It will be the first since NASA terminated its Space Shuttle program in 2011, forcing U.S. astronauts to rely on Russia’s Soyuz capsules to reach the International Space Station. Fortunately, this era is coming to a close. The occasionally awkward but nevertheless successful collaboration between a government agency (NASA) and a go-for-broke private space firm (SpaceX) will stand as a lasting tribute to the vision and energy of both partners.

Making a bet on a commercial firm like SpaceX required NASA to take a step well outside its comfort zone – trading in its traditional developer/designer role for something more akin to a purchaser of certified “crew transport services.” As a result, SpaceX and its competitor, Boeing, are very much in the driver’s seat: They make their own design decisions, conduct their own operations, execute appropriate capital expenditures, and ensure compliance with all regulatory requirements before launch.

This demanded a rather significant cultural shift from NASA’s rank and file, but the potential benefits are enormous. Crew Dragon will transport astronauts to low earth orbit at a cost of just $55 million per “seat.” While that’s comparable to the prices Russia has historically charged NASA for rides to ISS, it’s probably an order of magnitude cheaper than Shuttle, which was somewhere between $450 million (by NASA’s own estimate) and $1.5B per flight, in 2010 dollars. The higher figure is notable because it accounts for all of the infrastructure support and “standing army” costs that permit a Shuttle to fly, which NASA was obliged to cover even when it was grounded (e.g., following the 2003 Columbia disaster). Offloading that infrastructure to a commercial entity equates to a huge opportunity for NASA to fund other innovative work – whether this means Artemis missions, Earth monitoring, or voyages to the outer planets.

This idea is hardly original, nor is it confined to space. Relying on commercially-owned and managed infrastructure has lowered the barrier to entry for uncounted numbers of software startups and fueled an Internet boom – Microsoft’s Azure, Google Cloud, and Amazon Web Services all invested in data centers and cloud capabilities that, just a decade earlier, would have had to be replicated on a small scale by every new company. Such a big-ticket capital expenditure could spell the difference between profitability and bankruptcy. Jeff Bezos has remarked that the wholesale migration to the cloud bears a strong resemblance to 18^th-century factory owners making the switch from their own electrical plants to public utilities – it was far cheaper to purchase electricity off the grid, and freed up capital to solve other problems.         

Today, the U.S. is preoccupied with overcoming COVID-19, a threat first and foremost to public health but also to our domestic economy. Prior to the emergence of the coronavirus, America’s economy was on a tear: Record-low unemployment across the board, record-high stock market valuations, and an annual gross domestic product growth rate of 2-4%.  The pandemic slammed on the proverbial brakes, and a government-industry plan for how we recover from the resulting downturn is, at best, neither fully formed nor articulated. 

Past crises – the Civil War, the Great Depression, World Wars I and II, even Sputnik – have ignited an incredible combination of innovation, invention and entrepreneurial energy in American government and industry. Logistical problems encountered during World War II led to President Eisenhower’s proposal for a comprehensive interstate highway system, intended to transport military equipment from coast to coast (and, as a side effect, vastly improving commercial shipping and spawning a massive domestic tourism industry).  Sputnik – and the Soviet threat it embodied – led to the standup of DARPA, NASA, and the once-secret National Reconnaissance Office. These agencies and others partnered with industrial leaders, placing us firmly on the road to space.

COVID-19 presents our community with both an immense challenge and an opportunity. With an economy on hold, we find ourselves stuck halfway between an aging, legacy architecture characterized by high cost and long development timelines, and an emerging, entrepreneurial “New Space” community looking to capitalize on lessons learned from the personal computer, smartphone, and cloud computing revolutions.   

It’s time for us to take the next step. By combining the resources and planning of civil, defense, and private sector space, the U.S. can collectively invest in the next wave of offloaded critical infrastructure – and this time, we’ll be sending much of it straight to orbit. Ubiquitous, broadband Internet will be made possible by the deployment of multiple, interoperable satellite networks such as Starlink, Kuiper, Telesat, and – if it survives – OneWeb. Hyper-accurate positioning, navigation, and timing services – capable of telling you where you are to less than a fraction of a centimeter – will enable safe operation of autonomous cars, trucks, marine vessels, aircraft and spacecraft as far away as lunar orbit, while ensuring that the military has a much-needed suite of “backups” for GPS.  Cloud computing will migrate to space, so that large quantities of data collected by an increasingly sophisticated array of orbital sensors can be processed onboard, with results delivered immediately to users worldwide. The benefits of this new ecosystem will be felt in every sector – with the infrastructural elements becoming the scaffolding upon which new economies will be constructed.

We can lead this revolution, or we can opt out. All the pieces are in place – mass-producible smartphone and personal computer technologies, advanced satellite and launch vehicle manufacturing techniques, precedent-setting partnerships between federal agencies such as NASA and commercial trailblazers like SpaceX, and perhaps most importantly, a willingness to embrace risk. While it may appear prudent to some in government to let “New Space” actors find their footing before committing to long-term cooperation (especially in the middle of an economic crisis), “opting out” would be both an abdication of responsibility and a signal that the risk aversion that has permeated our community culture for so long is not abating. The opportunity to bootstrap ourselves into the next era of communications and transportation is here, now, and only collective action will seal the deal. 

Our predecessors possessed uncommon wisdom. They recognized key opportunities to collaborate during the formative days of the Internet, space exploration, and aviation – and while they may not have always understood the full import of what they were creating, their choices, and their unflinching acceptance of risk, have accorded the U.S. unprecedented economic, social, and military influence.

Their example is instructive – we are frankly obliged to rise to the occasion.