The Growing Space Economy: Examining New Business Opportunities in Low Earth Orbit

For decades, space has been dominated by government agencies focused on exploration and scientific research. But in recent years, plummeting launch costs and new technologies have opened up possibilities for a wide range of private business activity in space. This has given rise to an emerging commercial space economy, with many of the most promising near-term opportunities centered in low Earth orbit (LEO).

LEO covers the altitude up to about 1,200 miles above the Earth’s surface. With dropping launch prices from companies like SpaceX, placing payloads into LEO is now remarkably affordable compared to past decades. This lower barrier to access is enabling ambitious new commercial ventures. As launch costs continue to fall, the LEO economy looks primed for major growth.

On-Orbit Manufacturing

Microgravity conditions in LEO lend themselves well to certain types of manufacturing and materials science research. Producing optical fibers, protein crystals, exotic alloys, and other products in space often yields higher quality than Earth-based methods. As launch and payload return costs decrease, setting up small manufacturing facilities in LEO to produce limited quantities of high-value products starts becoming economically viable.

Several startup companies are planning to provide these on-orbit manufacturing services. For example, Varda Space Industries intends to use robotic spacecraft to construct fiber optic cables in LEO by the mid 2020s. Such products could sell for high margins given the uniqueness and superior quality enabled by microgravity manufacturing.

As experience is gained and processes refined, expanding the scope of orbital manufacturing into new types of niche, high-performance products will become more affordable.

Satellite Networks

Another major business opportunity involves placing constellations of thousands of satellites in LEO to provide global communications and internet access. SpaceX is leading this push with its Starlink network, which already has over 1,700 satellites launched. Other companies like OneWeb and Amazon’s Project Kuiper have similar mega-constellation plans.

Offering broadband internet access worldwide could be highly lucrative, especially for remote and rural areas lacking connectivity infrastructure. The sheer scale of these satellite networks is unprecedented and highlights the massive commercial potential now feasible in LEO due to low-cost access.

The growing volume of satellites does raise challenges, including potential overcrowding, space debris, and light pollution. But mitigation solutions like deorbiting requirements, reflectivity regulations, and traffic management schemes are being developed.

Orbital Services

A sizable service industry catering to the needs of LEO is also emerging. This includes orbital transportation of satellites between altitudes or orbits using tug vehicles. Other services include inspecting, servicing, repairing, upgrading, and refueling satellites already on orbit.

New spacecraft are being designed specifically to enable these on-orbit services. Northrop Grumman’s MEV spacecraft recently demonstrated rendezvousing with an aging Intelsat satellite in LEO and docking to extend its usable lifetime. As activity in LEO ramps up, so will demand for various orbital support services from satellite operators.

Space Tourism

Suborbital and orbital space tourism represents an emerging LEO industry with high potential. Companies like Blue Origin, Virgin Galactic, and SpaceX are actively developing designs and infrastructure to allow private citizens to experience space as passengers. While initially expensive, costs are expected to gradually decline as reusable launch vehicles scale up operations.

LEO tourism offers unforgettable views of Earth and weightlessness from above the atmosphere. As more people start valuing and pursuing these once-in-a-lifetime experiences, space tourism looks set to become a steady, viable business. Orbital hotels could follow later to accommodate longer stays in space.

Space Habitats

Further in the future, LEO could be home to full-scale space habitats with artificial gravity housing communities of civilians and scientists. Affordable reusable rockets make constructing these large structures easier to envision. On-orbit assembly using pre-fabricated modules is one option. Later space elevators could drastically reduce launch costs.

A bold vision held by many space advocates is that of “O’Neill” cylinders – enormous rotating LEO habitats holding over 10,000 people inside park-like, Earth-like environments complete with trees and small artificial clouds. While not feasible yet, breakthroughs in space construction and launch economics could one day make space habitats a reality.

LEO Infrastructure Needs

To support this growing space economy, investments into infrastructure are needed both on orbit and on the ground. This includes communications networks, weather monitoring, space traffic control, docking ports, refueling depots, cargo and people transports, heavy assembly platforms, space tugs, and more.

Both national space agencies and private players have roles in developing the necessary infrastructure backbone. NASA is partnering with commercial companies on multiple programs to help build up LEO capabilities. With the right infrastructure in place, companies can focus more on operating profitable LEO businesses.

A Compelling New Frontier

The emergence of a thriving commercial space economy in LEO has the potential to provide benefits back on Earth and advance humanity’s reach into the cosmos. Cost reductions from companies like SpaceX have put this vision within reach. With so many promising business concepts now feasible, LEO represents the next compelling frontier of activity in humanity’s expansion into space.