The New Space Revolution - from the book "Satellites and the New Space"

With the publication of the book Satellites and the New Space by Haim Ashad and Doron Shterman, we bring a section from it that deals with the definition of the new space. The book was published by Efi Meltzer - Military Research and Publishing

The traditional space industry began its journey in the mid-50s of the 20th century as part of the Cold War efforts between the great powers of the time, i.e. the Soviet Union and the United States. It was developed by various government bodies and huge companies at the same time with reliance on government funding, direction and control. Most of the resources were invested in development efforts of launchers, satellites and manned systems intended, first and foremost, to produce value of national significance, either by developing defense/offensive systems to support national security needs or to contribute to strengthening national morale and the sense of victory and superiority.

The breakup of the Soviet Union in the early 90s promoted a significant turn in the space industry in the following decades by legitimizing the development of space systems in order to fulfill business and commercial goals. Although most of the trade in space technologies at that time continued to exist mainly between state entities, or through them, and also under the cover of strict regulatory rules and bureaucracy, satellite launch services, various commercial services that can be derived from satellites and even satellites themselves, gradually became tradable products. The transformation that occurred in the space industry then occurred simultaneously throughout the Western world. However, it was possible to notice the buds indicating the approaching change as early as the mid-80s of the 20th century in the United States, which chose to regulate the commercialization of technologies, assets, and services based on space systems such as communication and remote sensing systems and mocked a federal law.

The immediate beneficiaries of the development of the business space market in the 90s were, of course, the largest defense industries in the world, which at the time overwhelmingly dominated knowledge, technology, infrastructure, as well as the accumulated experience in the development of space systems. The defense industries were actually able to leverage the huge government investment in the previous decades into a line of products and services based on space technology that made it possible to establish profitable business models in the following decades. The change in the space industry did not, of course, end there. With the tremendous potential for the commercialization of space assets and technologies, the competition between the various defense industries on the one hand, as well as the capabilities to realize collaborations on the other hand, which contributed, each in their own way, to the development of new capabilities and technologies in the field of space, also opened up.

On the face of it, it seems that the space industry managed to overcome a significant growth vector, and this was indeed the case for about two decades despite the fact that the space industry was still dominated at that time by the large defense industries. The defense industries continued to benefit from huge budgets that flowed through government bodies, for the maintenance of the infrastructures and the huge investments made over the years. At the same time, the defense industries continued to serve mainly strategic and national needs and were therefore limited in the scope and form of trade in the free market. Dealing with space systems and space technologies was seen until the early 2000s as a unique occupation reserved for super industries due to the need for complex integration and testing infrastructures that simulate the space environment as well as due to the deep technological knowledge and experience accumulated over decades in those industries. The entry barrier for small and medium-sized industries, or industries that are not backed by significant government funding, seemed almost insurmountable in those years.

The next significant trend change in the global space industry occurred near the beginning of the 2000s following two new developments; One, the standardization of tiny satellites (cube satellites) which were originally intended to allow a simple and cheap entry point into space for conducting academic research by universities. The second, the establishment of private companies that began to develop launchers for commercial use in order to generate economic profit. The private launch companies established in the United States (such as SpaceX, Blue Origin and Virgin Galactic) by entrepreneurs from the private sector have engraved on their banner the accessibility of the space industry to the general public and its transformation into a distinct business and commercial value.
At first glance it seemed that these two developments were not related to each other, but in practice both together constituted a significant factor in the development of the new space age. A combination of the standardization and miniaturization of satellites and satellite subsystems with the development of private launchers, which allow for a significant reduction in launch costs, have become an obstacle to the growth of a completely new business environment (ecosystem) in the landscape of the space industry.

In the years 2000-2018, over 1,000 new companies were founded in the field of space. Most of the companies were established in the United States and Europe, with the backing of venture capital funds and extensive private investments, with the aim of generating business and economic benefit in the form of innovative space systems, advanced services, effective launch systems, etc. as part of a business model designed to generate recurring profits for investors. As described above, the "traditional" space industry in the world was dominated by a limited number of super industries and knowledge centers, which were financed extensively from the defense budgets of countries around the world, but the space period in the last two decades is characterized by a wide variety of small start-up companies and mediumships that successfully develop and demonstrate new capabilities and technologies in the space industry and this, of course, at the same time as justifying the business model.
In many ways, the new space age can be seen as a sort of renewed space race, a race that took place at the beginning of the 50s between political powers and has now become a race between companies and business ventures around the world. A race for prestige, victory and national pride, has turned over the years into a race for general social benefit to improve the quality of life on earth and generate profit for investors and entrepreneurs. The new space age is a kind of another stage in the evolution of the global space industry. On the one hand, the new industry relies on and is nourished by the achievements and capabilities developed over the years in the old industry. On the other hand, it influences back the way of conduct and ways of thinking of the old industry which is forced to look for a new path.

Figure 1: The entrepreneur Elon Musk's electric vehicle made by the Tesla company he owns, with a doll instead of the driver. Launched in 2018 into space on the private Falcon Heavy launcher. Courtesy of Space X.

Old industry versus new

The tension between the different paradigms: between an old, large and experienced industry that believes in the production of complex systems to carry out national and strategic tasks and between a new industry that tries to stabilize a sustainable economic value point, is evident in many aspects. The old space industry engraves on its banner quality and uncompromising rigor, both at the level of engineering design and at the level of production and testing of the satellite systems, when usually the cost of a venture (project) (and sometimes even the time required to complete it) was given secondary priority, while the new space industry made the creation to To produce an economic value that cannot necessarily be justified from a pure engineering point of view. It seems that the new industry managed to jump over the huge potential barrier in entering the space sector by accepting the risk of failure.

One of the main factors justifying the old way of development of the space industry stems from the very practice of space systems which, as we know, cannot be salvaged and repaired after being put into orbit around some celestial body, due to the technological complexity and the high costs involved. The demand from space systems for a particularly high level of reliability has, in any case, led to complex, rigorous, slow and horribly expensive engineering development and proof processes. The new industry, on the other hand, adopted a different method to deal with the challenge of not being able to fix faults after launch - accepting the risk. The new industry is willing to take risks. For example, by designing small, simple and cheap spacecraft systems that do not necessarily meet all the strict standards that have been formulated over the years, and launching them into space as part of a process of trial and error. In this case, if a malfunction is detected and the satellite does not function at all, or does not function exactly as designed, it is possible to simply build and launch another satellite in its place because the resources involved in building and launching a replacement satellite are equal to the risk of a single satellite failure.

The private launcher industry developed a little differently. The main engine behind this industry was the desire to develop the tourism industry in space. In order for "space tourism" to develop, it was necessary to lower the costs of the launches, but on the other hand, safety, reliability and quality cannot of course be compromised since human life is at risk. The principle approach taken by companies involved in the space tourism industry at the beginning is an approach of developing reusable launchers, in contrast to the old launchers (which were mostly conversions of intercontinental missiles) that only allow for a one-time launch. Later on, the need for the development of small launchers was also identified to support the launches of small satellites in an effective and cheap way alongside the development and institutionalization of the "hitchhikers" industry - small satellites launched in a standard launch with large satellites but as secondary passengers.

Beyond the tension that exists between the various paradigms in the old industry versus the new industry, there are usually also significant differences in the organizational culture and dimensions of each industry which also affect the conduct of each industry. The older industries are generally larger in terms of the amount of engineering manpower available to them. They usually employ experienced and seasoned professionals in the design of complex systems and are accustomed to regular and in-depth design development and proofing processes. In contrast, the new industry is often characterized by small companies that are based on young and enthusiastic professionals, but are also inexperienced and are not subject to working methods that have developed over the years. These differences are critical factors in the ability, and sometimes even the desire, of any type of industry to deal with "small" ventures such as tiny satellites. A super industry that has been producing large and sophisticated satellites for decades, is of course capable of producing tiny satellites as well, but from an economic and business point of view it will usually be an effort that is not profitable for it, but can easily generate justification and a complete business plan for a small and agile company.

It is worth noting that governments also have a disciplinary contribution in the development of the new industry. For the new industry to thrive in an open market there is, of course, a need for market feasibility for this type of industry. From the point of view of the government, this means removing bureaucratic barriers and restrictions as well as granting permits for trade in space technologies, even though some of them were initially germinated in the defense industries. In the United States, in the last decade, a distinct trend of easing the conditions for the export of space technologies and systems, as well as easing the provision of services based on space technologies, can be identified. In many places in the world, such as, for example, in Israel, governments even actively encourage small businesses and start-up companies at the beginning of their journey through partial financing or a commitment to purchase products with the understanding that this way allows the germination of new capabilities and technologies that may contribute back both to economic development and to the general political technological development. NASA, for example, as a government body entrusted with the advancement of research and science, also invests many resources in promoting startup companies, mainly within the United States, recognizing their ability to contribute to the advancement of scientific research.