Satellite market growth

[TommyJo]

The market for space services is estimated at $ 300-400 billion per year. The commercial market share is estimated at approximately $ 250 billion.
It should be noted that space tourism, the development of space production, the industrial development of asteroids, space trade, construction in space (for example, the construction of orbital stations and spaceships), the organization of funerals in space, the creation of advertising also applies to the space industry.
Of the entire mass of services, ordinary people pay attention only to the launches of rockets and satellites. Satellite launches account for only about 2% of this market.
However, now this particular segment is growing rapidly at a rate of about 20 percent per year. Therefore, we have more and more new companies that can provide services for the production and launch of satellites into orbits.
Do you see any real benefit from the emergence of private space companies in this area?

[asda fasda]

Well, I would supose the "benefit" is vague term, but for sure basic economic principle works here, like with more companies there is more diferrent aproach used at the same time which helps find new solutions and cut cost. Next one is better managing due to asymetry of information that exist between agent and principle in goverment, private moneyalso helps usualy to fund some more risky venture.

[gomipile]

Well, I would supose the "benefit" is vague term, but for sure basic economic principle works here, like with more companies there is more diferrent aproach used at the same time which helps find new solutions and cut cost. Next one is better managing due to asymetry of information that exist between agent and principle in goverment, private moneyalso helps usualy to fund some more risky venture.

Why would asymmetry of information lead to better managing? Generally, closer to perfect information helps reduce inefficiency in supply chains. Maybe you're referring to some other effect?

[asda fasda]

Why would asymmetry of information lead to better managing? Generally, closer to perfect information helps reduce inefficiency in supply chains. Maybe you're referring to some other effect?

This is from principal agent theory. The asymmetry of information is between principal (capital giver) and agent (manager) and it allows for the agent to act suboptimal. It's just hard to asses whether outcome of manager is the best of possible one, as principal only can observe indicators of outcome. For private entity where CEO is the owner he has all the incentives to be as effective as possible. Moreover in government there are many layers of principal/agent level, as ultimate principal is taxpayer and the you've got representatives; ministers and other before NASA manager.

But this give me one more benefit, with many competitors you will also have benchmark for assessing outcomes of the organizations. It's very hard, usually next to impossible, to asses whether given result shows that organization is efficient just by this result, as there is so many factors going in. For example simple achieving a given result may not mean that the organization works well as it may used unnecessary resources. With many organizations you can asses whether given organization is performing below or above the average, which helps to identify which solutions works best. Of course this has it's own traps as for example fund managers making the decision is often assessing how others will act in given circumstances as he know that in the end he will be rated in connection to market not on stand alone basis, so if he take risky opportunity and fail, just like everybody else then that's no problem, the problem is not taking the risk and then when competitors succeeds he is left behind.

The above holds also for subcontractors i.e outsourcing. For NASA having possibility to chose from bigger pool of subcontractors gives it better way to efficiently asses them (in this scenario they are principal and subcontractor is agent). Having just 1 internal department again leads to asymmetry of information between oversight and head of that department.

[TommyJo]

How interesting and broad are the answers. Thank you. But I am also interested in other aspects of this topic. Let's say something like: will student startups appear in this area?
Or maybe space companies will become more highly specialized over time?
In many areas of life, we choose specialists and not those who say that they can do everything at once.

I cannot formulate it clearly yet. I'm curious what kind of things can be predicted, maybe. And what projects can be available for the participation of an ordinary person without special training.

[asda fasda]

Well looking general monopolization that can be observed on most markets, I wouldn't bet on specialization in long term : ), as for student start ups I would say there are already bunch off, in Poland where I live we have at least few space-startups that started at universities, and Poland is not known for pioneering space exploration : )

Important thing to remember is that the first company that patents some major components needed for space exploration will have good monopoly for next 2-3 decades.

[TommyJo]

Well looking general monopolization that can be observed on most markets, I wouldn't bet on specialization in long term : ), as for student start ups I would say there are already bunch off, in Poland where I live we have at least few space-startups that started at universities, and Poland is not known for pioneering space exploration : )

Important thing to remember is that the first company that patents some major components needed for space exploration will have good monopoly for next 2-3 decades.

Now the most talked-about company in this area is the company of Elon Musk.
Back in 2014, he announced all Tesla developments open for use. Since then, only Xiaopeng Motors has taken advantage of these developments. And still, nothing has been heard about them. But, if we assume that there are one or two of the same madmen in the space industry who declare their new developments open for use, then I think a different situation is possible.
Although much of this area is already available for use - just dig in the old blueprints

[TommyJo]

I see that you are predicting the globalization of everything. And it definitely makes sense. If you think about it, it's pretty easy to see this trend.
But this is not happening as globally as you are trying to imagine. Especially in the space sector, which is a relatively new area for private business.
To launch microsatellites into orbit, a micro rocket is enough. For such purposes, a global corporation is not needed.

[asda fasda]

Well you don't need big corporation to serve chicken, yet they dominate poultry market. Big corporation just can optimize better their supply chains and resources, as well have better access to financing etc.
And I agree that at this point we are not yet global society and thus the markets are not homogenous, but we have only this one planet and and share problems of world together so at some point total globalization will happen. (or humans stop happening : )

Ohh, and the of course with all the money in private-equity hedge funds, anyone who will be able to prove profits will quickly acquire funds to scale business fast and acquire competition etc.

[TommyJo]

Hmm) Cool chicken comparison. Are you a teacher? In this way, you can explain difficult things to anyone.
Now only one company can claim the role of a large corporation in the space sector, as far as I understand. But still not in the same sense as typical global companies.
There still seems to be a prospect for (relatively) small companies to launch small satellites.
P.S. You have a great way to explain

[asda fasda]

Thank you : ) But no I'm not a teacher, but economics is a topic I think a lot and read a little about, and this chicken example is something that I've learned few years back and still when this comes it's quite shocking that something so basic is monopolized so much.

[Rakaydos]

RocketLab, a New Zealand company, has a smallsat launcher, (the most successful one on the market in fact) but is transitioning almost entirely to a satellite platform manufacturer and operator (the Photon satellite buss), due to the pricing pressure SpaceX's rideshares are putting on launch services, while at the same time SpaceX's ridestares are opening up smallsat opportunities to people who could never have afforded older prices.

[TommyJo]

RocketLab, a New Zealand company, has a smallsat launcher, (the most successful one on the market in fact) but is transitioning almost entirely to a satellite platform manufacturer and operator (the Photon satellite buss), due to the pricing pressure SpaceX's rideshares are putting on launch services, while at the same time SpaceX's ridestares are opening up smallsat opportunities to people who could never have afforded older prices.

I've heard that small private companies are using 3D printing techniques to reduce costs. And RocketLab seemed to be on the list of these companies. Like RelativitySpace, Skyrora and others. Of course, RocketLab is a bit older than the rest of the companies on this list. But, perhaps among these companies, there will be one that will be able to offer something more relevant, at least for their country.

[TommyJo]

I would also like to know your opinion on whether we need new ways to clean or maintain satellites.
The amount that humanity sends into space is really growing every month.
We receive a lot of useful and interesting information about what is happening or is just about to happen. We are also getting better quality services.
But all this has its own service life. Are there many developments like space tugs?
Well, for example, Skyrora developed the reusable space tug

[Tarmor]

But all this has its own service life. Are there many developments like space tugs?
Well, for example, Skyrora developed the reusable space tug

I note that their tug has only been tested (on earth) in the last few months. It hasn't been launched yet. I agree its a good idea (that's been around since the late 60's) and Skyrora is only one of many vehicles proposed in the last decade. (For example, SHERPA launched 2018)

Something that simply collects our space junk would be a great idea!

[Rakaydos]

I would also like to know your opinion on whether we need new ways to clean or maintain satellites.
The amount that humanity sends into space is really growing every month.
We receive a lot of useful and interesting information about what is happening or is just about to happen. We are also getting better quality services.
But all this has its own service life. Are there many developments like space tugs?
Well, for example, Skyrora developed the reusable space tug

The biggest problem with space junk is Sovereignty. It doesnt matter if a satelite has been dead a decade, touch it without permission (and they have no reason to give permission) and you're violating the OST.