Thoughts from The Inc. Tank | Space Is Already a Business Frontier

May 18, 2021

The Inc. Tank logoby Christina Elson

Dennis Woodfork, a project manager and systems engineer with The Johns Hopkins University’s Applied Physics Laboratory, is one of the world’s leading authorities on what he calls the “emerging space ecosystem.” A former NASA and Air Force engineer and a graduate of the U.S. Naval Academy, he also has a sense of humor about his exotic passion, chuckling along with inevitable jokes about Star Trek, Star Wars, and sci-fi aliens from a far-off universe.

Dennis and I met in the Executive MBA program at the Robert H. Smith School of Business. He’s one of my favorite people and has become a recurring guest on The Inc. Tank because he has a unique perspective on space: he sees it as a collective human ideal and a burgeoning industry.

Woodfork is an evangelist, quick to point out that modern infrastructure already is dependent on space technology. Satellites are a vital part of the global economy and the Internet of Things. If tomorrow all the devices that rely on space-enabled GPS – telecommunications, financial services, agricultural, and others – were somehow cut off from their satellite signals, the results would be “catastrophic,” Woodfork told listeners in a recent episode of The Inc. Tank.

Brazilian analysts estimate that – right now – some 30 to 100 billion devices and machines worldwide are linked in some capacity via geostationary satellite-generated communications. Moreover, “smart cities” and other tech-driven enterprises of the future will be wholly dependent on high-speed broadband that can only be transmitted from space, Woodfork points out.

The global business community hasn’t begun to scratch the surface of space’s business promise, he says. Morgan Stanley estimates that, all told, space currently accounts for $350-$400 billion in annual revenue, a figure likely to at least quintuple over the next 20 years. By the year 2040, space will represent a trillion-dollar-a-year economy – hardly a niche business. So, the “last frontier” isn’t just for nerds and geeks anymore, Woodfork laughs.

The next years will bring a flood of space business, thanks to Virgin Galactic and Astra Space going public through IPOs and SPACS. To make space ventures consistently profitable, he believes, the private and public sectors, working together, must create cost-effective systems, especially launch systems to build infrastructure. In the 19th and 20th centuries, the railroads made it cheap and easy for people and resources to move across the country. In the wake of railroads, telegraphs and then telephones followed, and industry sprang up along the routes.

The cost of getting satellites and other technology into space has been prohibitive for many business consortiums – but it’s beginning to come down, he notes. What used to cost several hundred million dollars may soon cost a fraction of that. Musk and other visionaries believe that if the proper reusable technology can be perfected, individual launches will be reduced to the $60 million range, which could bring a lot more players into the space business. This is the key to building a space infrastructure that supports longer periods of habitation for research, resources extraction, and even tourism. We have to shift from launching things built on the earth to launching equipment to build what we need in space.

Just as railroads needed security in the days of the Wild West, our fledgling space industry in short order will need security, too. Which is why the much-misunderstood Space Force is so integral to the future of our space ventures. Woodfork worries that “pirates” or hostile agents or adversarial forces of some kind will seek to undercut the U.S. investment in space. The U.S. Marines came into being in the early days of our Republic to take on the Barbary Pirates, who were imperiling our ships at sea. The Space Force may well provide that same layer of protection for our space ventures. For any business to operate successfully, it needs to have a sense that the government will de-risk the ventures through the basic things we expect governments do: support property rights and provide security.

One of the aspects of space exploration that intrigues him the most is that government is not the exclusive driver. Indeed, Woodfork sees NASA as a customer and partner of private space consortiums.

Woodfork is bullish on “asteroid mining,” the prospect of sending excavation crafts into space to mine the precious metals contained in far-off asteroid belts. An unformed planet asteroid field between Mars and Jupiter is believed to contain so much nickel and iron that its worth far exceeds the value, in toto, of the current global economy! The people who figure out how to make asteroid mining viable may become trillionaires, he predicts.

Such fantastic conjecture doesn’t intimidate Woodfork. Just as the industrialists of the 19th century foresaw a future that few others could see, so Musk and today’s visionaries can picture a space frontier that can yield incredible results for mankind. Vision is one thing, but you can be certain that this emerging industry is going to have much disruption; we don’t know whose ideas, technologies, or products will succeed. The Vanderbilt’s family created immense fortunes in shipping and railroads, but for every Vanderbilt success there were literally hundreds of railroad companies that went bankrupt.

Elon Musk is wise to spread his risk in between investment in launching (Space X) and communications (Starlink). He might just achieve in a few decades what it took Alexander Graham Bell and Cornelius Vanderbilt almost 150 years to accomplish.

Woodfork highlighted several companies that are well positioned to become integral parts of the space ecosystem – and make a lot of money while doing it. But to get their names, you’ll have to listen to the podcast.

Beam us up, Dennis.

# # #

Listen to the podcast here or on your favorite platform.

Read more “Thoughts from The Inc. Tank” by Dr. Christina Elson on Linked In.

Christina Elson is the Executive Director of the Wake Forest University Center for the Study of Capitalism and the cohost of The Inc. Tank.