Room to grow: A leader’s guide to the space economy

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Share this email Share this email on LinkedIn   Share this email on Twitter   Share this email on Facebook   ESSENTIALS FOR LEADERS AND THOSE THEY LEAD   Edited by Rama Ramaswami   Senior Editor, New York Most of us are unlikely to travel to space any time soon. But with the space economy lifting off in spectacular fashion—estimates are that the market will exceed $1 trillion by 2030—it's possible to participate in the adventure without ever leaving our desks. New space technologies are already pervading our daily lives, and by the end of the century, people may be "working and living on the moon and living on Mars as well, because we're building up that infrastructure," as this McKinsey podcast suggests. In the meantime, your mission, should you choose to accept it, is to ensure that you and your organization benefit from the journey. AN IDEA Stay grounded The space economy's potential to transform people and organizations on Earth is just beginning to be realized, according to McKinsey's Mina Alaghband, Ryan Brukardt, and Jesse Klempner in this McKinsey Technology Council podcast. "For more than 50 years, space has been the domain of governments, and that's largely been due to the excessive cost of actually getting into space," says Brukardt. But recent technological advances have cut the costs of travel and enabled greater access to space, along with producing practical applications: for example, satellite-based imaging technologies such as remote sensing could enable people to see the exact number of cars in a parking lot. "We're really at the precipice of a monumental shift," Brukardt says. "Think about aviation in the '20s or the internet in the early '90s and compare it with where we are today. I think we're at that inflection point now with space." To participate in this growing "space for Earth" economy, leaders across industries may need to consider ramping up the speed of innovations, bringing on suitable talent to work in the space sector, and educating themselves about the needs of potential private- and public-sector customers. A BIG NUMBER $10 billion That's the approximate amount of private-sector funding that went into space-related companies in 2021—and it represents an all-time high as well as a tenfold increase over the past decade. Along with this surge comes a small but significant shift in investment from low-Earth-orbit satellites to missions in lunar and beyond orbits, which are more distant from Earth. These ventures may provide a pathway for innovative start-up industries, such as mining rare materials in space. A QUOTE "We are in a critical window for ensuring [that] space is a safe, sustainable, and accessible domain for all; without quick and decisive action, positive outcomes may not be realized." That's the authors of a joint report by McKinsey and the World Economic Forum on the crucial role of the space industry in enhancing life on Earth. As the sector becomes more crowded and competitive, and new operating models emerge, existing frameworks for governance may no longer be effective. Many leaders believe that five critical actions are essential for a healthy and self-sustaining space economy; these include investment in advanced technologies and global collaboration among nations and industries to support the growth of a private space sector. A SPOTLIGHT INTERVIEW "I love the fact that young people are still excited about space and want to come into our industry," says Debra Facktor, head of U.S. Space Systems for Airbus U.S. Space & Defense, in this discussion with McKinsey. She underscores the importance of nurturing talent specifically for the burgeoning space sector, noting that women and underrepresented minorities in particular need encouragement to go into fields like aerospace. While expertise in math, science, and technical fields is essential, other types of skills are also needed: "People who know how to communicate, people who know how to draw up contracts, experts in political science, experts in the arts—these are all important parts of our space ecosystem," Facktor says. CLOSE ENCOUNTERS Afraid of running into aliens in space? You're more likely to collide with space debris, which is rapidly shaping up to be a major threat to space missions. Tens of thousands of defunct objects—including nonoperational satellites, old rocket bodies, and even paint chips—are currently in orbit and pose serious hazards to objects on a crossing trajectory; several high-profile collisions have been reported. Cleaning up space junk isn't an easy task, but governments and private organizations could consider some actions to mitigate risk, such as tracking satellite movements and collaborating with satellite operators on physical debris removal. Lead with gravity. Follow our thinking Share these insights Did you enjoy this newsletter? Forward it to colleagues and friends so they can subscribe too. Was this issue forwarded to you? Sign up for it and sample our 40+ other free email subscriptions here. This email contains information about McKinsey's research, insights, services, or events. By opening our emails or clicking on links, you agree to our use of cookies and web tracking technology. For more information on how we use and protect your information, please review our privacy policy. You received this email because you subscribed to the Leading Off newsletter. 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