The space industry is projected to grow to $1.8 trillion by 2035, according to a report released by the World Economic Forum in partnership with McKinsey & Company. This growth is due to three global trends: increasing worldwide connectivity leading to higher demand for satellite internet, growing mobility driving the need for GPS-enabled services, and a more informed populace with rising demand for AI-powered insights.
The report divides the space economy into two categories: “Backbone” applications like satellites, launch vehicles, and GPS which currently make up about 50% of the space economy, and “Reach” markets, non-space industries or services relying on space technology like weather services, parcel tracking, and food delivery, making up the other half. Reach markets are expected to grow at a faster rate than core space technology and will become the main driver of the space economy by 2035.
One of the largest drivers of the space economy comes from PNT (Positioning Navigation Timing) technology enabled by GPS in the US for non-space applications such as location-based services. While communications remains the largest revenue source for Backbone players, PNT technology is expected to see a 155% increase in market size by 2035. Five industries are projected to generate over 60% of the growth in the space economy by 2035, with supply chain management and transportation leading the way.
However, there are potential challenges facing the space industry that could lead to a downside forecast of $1.4 trillion by 2035. These challenges include emerging terrestrial alternatives to space-based GPS and limited accessibility due to cost curves becoming steady. Despite these challenges, experts believe that the space industry will become a trillion-dollar industry in the next decade and play a crucial role in addressing global challenges like climate risk mitigation, disaster response, and humanitarian crises.
