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Report by analysts peg revenue of space industry at $1 trillion by 2040

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Credit: ESA/CNES/Arianespace

Citigroup analysts predict in their recently published report that the space industry will reach $1 trillion in annual revenue by 2040.

According to the report, the cost of accessing space will decline and will lead to more opportunities for innovation. The industry’s advancement will also enhance services related to satellite broadband as well as its manufacturing.

The space industry has been booming in recent years. Citigroup’s report comes in congruence with forecasts by Bank of America, and Morgan Stanley, among others. Back in 2020, the global space economy was worth $424 billion.

“Revenue from manufacturing, launch services and ground equipment will make up the majority of the revenue growth in the satellite sector,” Citi said. “However, the fastest growth rate is expected to come from new space applications and industries, with revenue forecast to rise from zero to $101 billion over the period.”

Private investment in the space industry reached new heights in 2021, accounting for $14.5 billion worth of private capital being funneled into 1,700 companies tracked by Space Capital.

While the industry is booming, companies should also work with other concepts like  space-based solar power, moon/asteroid mining, space logistics/cargo, space tourism, intercity rocket travel, and microgravity R&D and construction.”

According to the analysts, “A similar analogy would be attempting to forecast the value of the internet today versus nearly 20 years ago when the term ‘smartphone’ was relatively unknown and before broadband replaced dial-up internet connections,” the analysts said.

“Lower launch costs were pioneered by SpaceX with the launch of Falcon 9 in 2010,” Citi said.

“Fundamentally, with the new generation of space being driven by the commercial sector, the launch industry is seeing a secular shift from being largely cost-plus pricing-based to being value-based in order to open up new markets and maximize profitability,” Citi further explained. “Previously, the launch market had a limited number of government-supported companies that were concerned more with military capability and creating revenue and jobs than with increasing operational efficiency.”

As launches become more commonplace, the cost of a space shot has declined dramatically. Reuse of boosters is an essential part of bringing down these costs, according to Citi.

Citi admits that the expansion isn’t easy. According to their analysts, there are other things to consider like space environment, capital costs, and returns.

More importantly, Citi says that public perception of space exploration should change – from an industry exclusive to the billionaires to an essential factor that can guarantee our survival as a human race. To Citi, the space industry “needs to gain public acceptance before it can be adopted across various industries.”

Based in LA, Donna Barts is a senior repoter for Kivo Daily. She primarily covers entrepreneurs.

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