Bill Nelson, the head of NASA, has stated that the United States and China are “in a space race to go back to the moon.”
Mr. Nelson expressed his desire to guarantee that “we get there first” in an interview with the BBC.
His remarks bring to mind the years between the 1960s and the 1970s, when NASA was competing with the Soviet Union in the space race. However, after fifty years of operation, NASA has turned to private corporations to carry out the majority of the task.
According to Mr. Nelson, they are essential because partnerships enable NASA to draw on “the creativity of entrepreneurs in the private sector” while also allowing the enormous expenditures to be shared.
He gives the example of Elon Musk’s SpaceX, which in 2021 was given a contract worth $3 billion (£2.4 billion) to build a lunar lander and has also designed the most powerful rocket ever constructed.
A number of different commercial companies are also profiting from the current space race. The agreement with Jeff Bezos’ Blue Origin, which was struck earlier this year and is worth $3.4 billion, is also to construct a lander, but it is for future moon landings.
These are just two of the many businesses that stand to gain from the billions of dollars in funding provided by the government. In the context of far greater tensions between the world’s two largest economies, this money is being spent, at the very least in part, to try to maintain a competitive advantage over China.
Late in the month of August, India became the fourth nation in the world to successfully do a soft landing on the Moon. They were also the first nation to reach the lunar south pole region.
Despite this success, China’s space program is the one that NASA is paying the most attention to right now.
China is the only country in the world that has its own space station; it has also successfully brought samples of the moon back to earth, and it has future intentions to explore the polar parts of the moon’s surface.
Mr. Nelson expresses his concern over this matter as follows: “What I’m concerned about is that we find water on the south pole of the moon, China gets there, and China says this is our area.” You are not allowed to enter this area because it is privately owned by us.
Mr. Nelson contends that the fact that China is constructing artificial islands in an effort to assert its control over some portions of the South China Sea lends credence to his worry.
Mr. Nelson also brings up the fact that China has not joined the Artemis Accords, which are being led by the United States and are meant to serve as a guide for best practices in space and on the Moon.
In the past, China has responded to US worries about its space program by calling them “a smear campaign against China’s normal and reasonable outer space endeavors.” China maintains that it is dedicated to the peaceful exploration of space.
The competition is driving significant new investment at NASA. According to the agency, its spending contributed $71.2 billion to the GDP of the United States in the year ending in September 2021, which is a 10.7% rise from the previous year’s total.
The effects of NASA’s spending are felt throughout the economy to a much greater extent than those of even the largest companies, such as SpaceX.
“A quarter of our spending is going to be done with small businesses,” Mr. Nelson says.
According to Sinead O’Sullivan, a former NASA engineer who is now a space economist at Harvard Business School, that kind of money has the potential to hasten the expansion of small businesses, particularly new businesses.
She explains that the government will frequently act as a start-up company’s first customer, and that the contracts that result from this relationship can enable the company to approach private investors and obtain even more capital.
However, governments are equally vital, if not more so, than venture money and private equity, according to Ms. O’Sullivan. “A lot of the time we talk about venture capital and private equity,” she says.
Although the race to return to the moon has received a lot of media attention, it has also contributed to the explosion of other space activities that could be much more lucrative.
Russia was the first nation to successfully place a satellite into orbit in 1957, and it did so while competing with the United States in the first space race. According to the European Space Agency, there are just a little bit more than 10,500 satellites now orbiting the globe.
Chad Andersen, founder of the investment firm Space Capital, attributes SpaceX’s role in driving industry growth over the past decade to the company’s efforts.
“The only reason that we are speaking about space as an investment category today is because of SpaceX,” he says. “SpaceX is the only reason that we are even talking about space.” Before they made their first commercial flight a little more than ten years ago, the whole market was controlled almost entirely by the government.
According to the analytics firm BryceTech, almost one-half of the satellites that are now in orbit were put there during the last three years.
The majority of the credit for this goes to just two companies: One Web and Starlink, which is owned by Elon Musk.
“Rockets and satellite hardware are simply the tip of the iceberg when it comes to the space industry. According to Mr. Anderson’s explanation, it is the unseen pillar that supports and propels our global economy.
According to him, as the number of satellites in orbit continues to rise, an increasing number of businesses are discovering new applications for the data that these satellites give. Some of these new uses have been implemented in the fields of agriculture, insurance, and maritime transportation.
Originating from New Zealand A significant actor in the space economy is the company known as RocketLab.
It is a competitor to SpaceX and has already carried out forty launches for various clients, including NASA and other government agencies in the United States.
It was founded by Peter Beck, who began his career as an engineer for a dishwasher company before moving on to launch rockets into space. He believes that this is just the tip of the iceberg when it comes to the potential income prospects that exist beyond earth.
“The Launch opportunity is about worth $10 billion. Then there is infrastructure, such as building the satellites; this presents an opportunity of approximately $30 billion. And then there are apps, which represents an opportunity of around $830 billion.”
He is hardly the only one who makes bold assertions. Morgan Stanley, an investment firm based in the United States, predicted that by the year 2040, the global space business might be valued more than one trillion dollars annually.
What could be the next step for commercial companies that operate in space?
Mr. Beck approaches the potential on the moon, particularly those in the mining industry, with caution.
“At the present time, it is not feasible from a financial standpoint to travel to the moon, mine there, and bring the ore back to Earth.”
Bill Nelson, who works for NASA, believes that there is potential in medical research. He makes reference to the fruitful research into crystal growth that the pharmaceutical company Merck carried out in 2019 on the International Space Station. This research aided in the development of a therapy for cancer.
He also suggests that the production of fiber optics might be more efficient in the absence of gravity.
What you will observe in the long run is a significant amount of commercial activity in low Earth orbit.