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Speaking Feb. 4 on a NewSpace New Mexico webinar, Tory Bruno said too much investment is being poured into risky launch ventures which is fueling a bubble. He suggested that money could be better directed to new economic activities related to space such as specialty manufacturing, natural resource development and in-space transportation.
To be attractive to investors, these new space activities should be dual-use with both commercial and national security applications, Bruno said.
The launch market is becoming dangerously “overheated” for a couple of reasons. One is simply that there are too many launch companies chasing a “more or less fixed size” pool of customers, Bruno said. In the large rocket market, he said, prices are falling and the demand for satellite launches “has remained stubbornly inelastic.”
“It’s down to a third or even a fourth of the cost of what access to space was just a handful of years ago,” Bruno said. “Yet we have seen no increase in the overall size of the launch market nor have we seen a corresponding tripling or quadrupling of space activity.”
During his talk Bruno did not mention any specific companies. His own company ULA has seen its business threatened over the past several years by the industry’s increasingly dominant player SpaceX.
Bruno said too much energy and investment is going into new launch vehicles and “we’re not making the market larger, we’re investing in the same activities albeit with innovation and, in some cases, disruption which is a good thing.”
The U.S. government benefits from private investment in space and should try to re-direct the focus to new areas, said Bruno. In-space factories and mining, he said, are examples of activities that could stimulate demand for launch services and support both commercial and government goals.
The U.S. military also could fund technologies from nontraditional players that could be used to make satellites more resilient to attacks, said Bruno. The national security space environment is being disrupted by anti-satellite weapons, he said. “If unchecked they’ll be able to blind us, or shut down our economy at will because of how integrated our economy has become with space.”
The U.S. government “must harness innovation to solve these problems,” said Bruno. But to attract investment the government has to clearly communicate its national security needs and provide “real time feedback” to companies.
Bruno also suggested the Defense Department should encourage space startups that have no experience with federal contracting to team up with traditional Pentagon contractors.
This could help DoD get cutting-edge space technology but there are some caveats, said Bruno. “Traditionalists have to be confident that they’re not going to be displaced by the new entrants. And they have to be confident DoD will respect their intellectual property.”