Space Possibilities for Our Grandchildren: Current and Future Economic Uses of Space

This paper serves as a primer on the space economy, which will expand significantly in size and importance over the coming years. It is high time for economists to devote more attention to it.

Highlights

• A new economic domain is rapidly unfolding in space, with momentous (geo-)political, security and economic implications.
• Our estimates indicated that launching a kilogram of mass in space today costs 95% less than it did when space exploration first began, 60 years ago.
• We exploit Wright’s Law to forecast that space launch costs will drop to less than a third of their 2015 value by the end of this decade. Under bullish scenarios, they could be as low as 1000$/kg by 2040.
• Looking at it through a trade economics framework, we are entering a period where (space) trade frictions are dropping, and new markets will be created as a result.
• We provide a new analytical framework to think about the economic uses of space, shedding light on the ways its unique properties can be harnessed for economic benefit.

Information and identifiers

Discussion Paper 211. September 2024. Brussels. PDF. 34pp. Tab. Graph. Bibliogr. Free.

KC-BD-23-028-EN-N (online)  
ISBN 978-92-68-01829-3 (online)  
ISSN 2443-8022 (online) 
doi:10.2765/392340 (online)

JEL classification: B27; D23; F10; F50; H54.

Disclaimer

European Economy Discussion Papers are written by the staff of the European Commission’s Directorate-General for Economic and Financial Affairs, or by experts working in association with them, to inform discussion on economic policy and to stimulate debate. The views expressed in this document are solely those of the author(s) and do not necessarily represent the official views of the European Commission.