It has been 60 years since Yuri Gagarin became the first human to transcend the boundary of Earth’s atmosphere, and in that time, our collective fascination with space has not subsided. Yet, unlike other pioneering ventures, mankind’s quest into space hasn’t brought about manifold global rewards. Instead, near-Earth space remains almost as vacuous and under-utilized as it has ever been, a celestial parking lot for a scattering of satellites and space debris. Thankfully, that may be about to change with the rapid development of Low Earth Orbit (LEO)—a region of planetary orbit convenient for transportation, communication, and observation—that may prove to be the catalyst for a transformation of economic activity in space.
New Highs, New Lows
LEO encompasses Earth-centered orbits within 2,000km of the planet’s surface—just a fraction of the band of space currently occupied by man-made satellites. Despite its relatively small volume, LEO contains a disproportionate share of the activity taking place in Earth’s orbit; for instance, the International Space Station (ISS), Hubble telescope, and Iridium network are all nestled just beyond our planet’s atmosphere.
LEO’s popularity with man-made satellites shouldn’t come as a surprise—it is, after all, basic economics. The cost of launching a satellite into space is astronomically high. Once there, the amount of energy needed to broadcast to Earth increases with the distance from its surface. LEO’s relative proximity to the surface then makes it the ideal destination for commercial space activity, especially when that activity is centered on the planet below. Even so, costs remain prohibitively high for most commercial ventures. Almost all activity in LEO has, therefore, been driven by public-sector funds rather than the profit motive of the private sector. This has meant that much activity in LEO has been narrowly focused on public goods, such as research onboard the ISS and military satellite technology, which, although important, will not sustain a flourishing Space Economy. NASA itself has acknowledged the need to develop a robust commercial human spaceflight economy to which it may outsource its services. At the earliest, services currently offered by the ISS may be performed by private partners in LEO by the mid to late 2020s.
Public-sector infrastructure has, however, opened the door to the large-scale commercialization of LEO. Access to NASA launchpads and other launch facilities has enabled the development of commercial launch systems, such as SpaceX’s Falcon 9 and Heavy—the latter can put a kilo into orbit for less than the price of a new MacBook Pro. This has reduced the cost of travel to LEO by a factor of 20. Costs are falling more rapidly on the margin thanks to reusable launch assets, modular vehicle designs, and payload ride sharing. Put simply, massive efficiencies are changing the approach to space from the historic paradigm of exploration to one of future commercialization.
Voyages of Human Enterprise
With the barriers to economic activity falling away, cheap and ready access to LEO will make previously unworkable ventures in space, such as manufacturing and life-science research, seem not only feasible but also practical. For instance, the microgravity environment in LEO will allow for the efficient manufacturing of goods, like delicate ZBLAN fiber optic cables, that are expensive and difficult to make back on Earth. Bioengineering will flourish in LEO: printing gossamer-thin tissues to build organs is a lot easier without having to deal with cells collapsing under their own weight.
LEO provides a unique physical vantage point. The miniaturization of satellites, cloud connectivity, and differential GPS are revolutionizing Earth observation. Already, the application of satellite technology is helping to tackle climate change, track urban development, and improve crop yields. Soon, satellites in LEO may help billions access basic public services, such as healthcare and education, through internet beamed from space. In fact, SpaceX’s Starlink plans to do exactly that.
As the cost of exiting the atmosphere falls, the physics of orbit become much more useful. Transporting cargo (and eventually private passengers) from one side of the Earth to the other may take less time than a train from London to Paris. LEO also offers one of the best views off Earth, and that is something that many people would be willing to pay for. As the safety of spaceflight improves, spending a night in space may become the next must-have experience—providing you have enough MacBook Pros to spare, that is.
No Free Launch
The promise of LEO is undeniably tantalizing. It is, however, important to recognize that there are several challenges to overcome. Transportation costs remain high and the economic cost of a trip to Earth orbit is in the many millions, despite progress. Although getting off the ground is cheaper now than ever, commercial spaceflight has not reduced the cost to provide cargo to orbital infrastructure like the ISS. The infrequency and antiquated structure of spaceflight carries opportunity cost that slows private-sector plans for space. The risk to cargo and crew is also uncomfortably high. Space travel is still expensive and dangerous.
For commerce to flourish in LEO, well-defined property rights and the protection of intellectual property are necessary to ensure that cutting-edge companies have incentives to take on the massive risks and costs associated with space enterprise. This may be achieved with something akin to maritime law, with rights being allocated on a first-come, first-served basis. Alternatively, mechanisms may be designed to allocate the space. Both approaches raise concerns around the equity of monopolizing regions of LEO according to current ability to pay. There is also the question of how to arbitrate in disputes over space, as regions like LEO become more and more lucrative. If economic activity on Earth is any guide, such disputes will likely become a lightning rod for international squabbles over the support of domestic space industries.
Preserving the health of LEO is also an important consideration. Space junk from human activity is a classic negative externality. Journeying into space is difficult enough without having to avoid debris that increases the risk of failure and reduces the return to investment by making it more difficult to return high-value items for terrestrial use or to insure against catastrophic losses.
Down to Earth
The history of developing frontiers, such as the American West via the railroads, illustrates the importance of the public sector in overcoming the initial barriers to successful pioneering ventures. Infrastructure, legislation, and property rights are all essential for the development of LEO.
Government agencies, such as NASA and the ESA, have been pivotal in laying the foundations for space commerce by leveraging huge budgets and decades of experience to drive down costs and promote and regulate more diverse space activity. In the coming decades, the role of these agencies will evolve to provide greater incentives for private enterprise to develop space-based industries, such as advance purchase contracts on vehicles and orbital facilities or procurement auctions to outsource services such as data collection and exploration. In doing so, government agencies will encourage existing space infrastructure to be harnessed to capacity and spur on cost-saving innovations.
The success of public sector endeavors is, however, not guaranteed. It remains dependent on the continued support of government, which, in turn, depends on public appetite for space activity. Many people are captivated by space—think Bowie, Kubrick, and Cox—yet the relatively unromantic process of developing LEO and kickstarting the Space Economy may prove less beguiling to some. Voters may consider developing space wasteful: why create problems in space when we are yet to solve some of the most pressing on Earth? The use of public funds to subsidize “space barons” in the face of rising inequality may be a political non-starter. Consequently, it may be challenges right here on Earth that forestall economic activity in space.
To LEO and Beyond!
Elon Musk, the visionary behind SpaceX, has his sights set well beyond LEO, as have Jeff Bezos and Richard Branson. To these stargazing billionaires, LEO is the launchpad for much more ambitious endeavors: mining asteroids, colonizing other planets, and perhaps next-day delivery in space.
All that remains to be seen.
What is clear is that LEO offers huge commercial potential but not without bearing substantial risk and cost. Also clear is that it will take a sustained public-private effort to realize that potential. In the coming decades, LEO will undoubtedly be the proving ground for a space-faring economy and society.
Humanity has long had its head in the clouds; perhaps soon it will prosper above them.
Oliver Ryder-Green 