Space and the Pursuit of Profit

The modern space age began a good fifty years ago, and from its first moments promised a bold era in exploration, science, and commerce. Government programs led the way with visionary national programs, and many private companies jockeyed for advantageous and profitable positions supporting these government programs, anticipating the eventual expansion into emerging commercial markets meeting the public demand.

For us, we started looking at the possibilities in the early 1990s. As with many, we saw the growing success of satellites, and we believed that opportunities within manned spaceflight were soon to emerge. As such, we began to consider where to invest money within the space industry, either in an established company or starting one of our own. Seeking to understand the industry, we attempted to produce a viable business plan for a satellite launch and maintenance company.

We examined the publicly-available data from credible sources, including:

Despite the fact that all these reports were considering the same industry, there was too much variance in the data to be able to make a solid business case (in some cases up to 50%). Because there was no industry standard for classifying launch information, different sources were free to use their own, undefined, system differentiating between commercial, civil, or military launches. One source might classify a military satellite launched on a commercial rocket as a commercial launch, but another would classify it as a military one, and a third would classify it as both (in effect counting the launch twice).

Unable to fully and credibly reconcile all the variance, we could not develop a business plan that we felt was honestly justifiable. This seemed odd to us, since clearly satellite companies were on the rise and making a profit. At the time, we chalked it up to inadequacies in the information that was available to the general public, and continued to look for new (and hopefully better) information.

In 2002 a report entitled, “Space Economic Data” was published by Henry R. Hertzfield of George Washington University’s Space Policy Institute. This report independently confirmed the issues we found within the reporting of industrial launch and manufacturing data in 1995 through 1998, and more importantly, exposed the issue that it wasn't just a question of the data available to the general public, it was a problem with the data itself. Since the specific data couldn’t be effectively utilized, we then changed our perspective to again look for opportunities within manned orbital space flight.

Applying Manufacturing Tools at an Industrial Level

Under this new perspective, we sought to apply alternative tools from our industry background. Specifically, we chose to apply a KJ Method Analysis, a standard tool that gathers large amounts of qualitative data (such as ideas, issues or recommendations) and organizes them into groupings based on their natural relationships. Once grouped, this method can then be used to prioritize the basic themes within the data to help give focused direction to resolving issues.

Rather than focusing on launch numbers and detailed manufacturing costs, we applied the KJ framework instead to national space policies, internal reports, and the current incentive and regulation systems used to promote the industry. The KJ analysis revealed the interrelationships affecting the industry as a whole, and the results surprised us. It appeared that all the necessary aspects of the industry were accounted for, but not all segments of the industry seemed to be responding and growing.

We could see a clear response from the unmanned space flight industry, as there existed a vibrant satellite industry. We could see the beginnings of a manned suborbital space flight industry. However, after decades of incentives and policies, manned orbital space flight still remained solely under government subsidy. This raised an interesting question, one that ultimately consumed our attention:

If all aspects of the space industry are apparently accounted for, why has human space flight been unable to attain sustainability?