27 October 2016
Elon Musk (left) and Jeff Bezos are pioneers in advancing rocket and space technologies that leave NASA and other state agencies far behind. Photos: BriteBits, SpaceX, Amazon
Elon Musk (left) and Jeff Bezos are pioneers in advancing rocket and space technologies that leave NASA and other state agencies far behind. Photos: BriteBits, SpaceX, Amazon

How state agencies are losing out to private firms in space race

Dennis Tito, an American engineer-turned-multimillionaire, became the first space tourist in human history when he undertook a voyage in April 2001. He spent nearly eight days in low orbit, circling the earth 128 times, courtesy of the cash-strapped Russian Federal Space Agency (FKA) which charged him US$20 million for the ride.

Tito famously predicted that future travelers to space may only need to spend 5 percent of the amount that he had splurged on the trip. That would mean around a million dollars, which would still be out of reach of most people. But just like how international phone call charges have come down sharply over the past decades, there exists the possibility that space travel may indeed be affordable one day.

Only the government can spearhead and foot the bill for risky, expensive programs that entail fundamental economic implications, as private businesses won’t take the plunge or simply don’t have the resources to drive key initiatives. That’s one principal theory of economics.

But nowadays we are seeing new trends in leading innovation powerhouses in the West. And one example is space technology, which has already become a new frontier for private entities to break new ground.

Wikipedia has compiled a list of private spaceflight companies, around 80 entities in total, with detailed information about their research and development investments and progress.

Last week SpaceX, founded by Tesla chief Elon Musk, made global headlines with its groundbreaking orbital rocket landing – the firm recovered the first stage of its Falcon 9 v1.1 rocket together with the most expensive components like propellers – less than a month after its arch competitor Blue Origin, founded by Amazon chairman Jeff Bezos, accomplished the same feat with its reusable suborbital launch vehicles.

The payload of SpaceX’s Falcon 9 v1.1 rocket is 13,150 kilograms, higher than that of China’s Long March 3B (12,000 kg), currently the most powerful member of the nation’s rocket family.

Being used to re-supply the International Space Station under a contract with the US National Aeronautics and Space Administration (NASA), Falcon 9 v1.1 has already been SpaceX’s cash cow. The firm is also working towards the first launch of Falcon Heavy designed with a payload of up to 53,000 kg.

Blue Origin, on the other hand, is more focused on the commercialization of suborbital tourism.

The two private firms are now leading technological innovation as other state-run space agencies have all failed, throughout the past decades, to have an orbital class booster travel to space and return intact.

Both firms have developed similar technologies: when a rocket climbs to a certain altitude – the Kármán line for instance, the 100 kilometer boundary between the Earth’s atmosphere and outer space – having separated from the payload fairing, the first stage turns itself over by 180 degrees for an upside down position, and then starts the other set of engines installed at the top for reverse thrust to reduce speed and thus frictional heating when the first stage reenters the atmosphere for landing.

Bezos once noted that when New Shepard, Blue Origin’s reusable rocket, reaches the ground, its speed is no more than 4.4 miles per hour, no faster than a car creeping into a parking lot.

A prime reason for stalled rocket technology innovation and even manned space exploration since the 1960s has been the exorbitant costs, in particular when re-supplying the International Space Station.

NASA did give a shot with its Space Shuttle program, a low Earth orbital spacecraft system designed to be partially reusable. Still, since spacecrafts of this type rely on friction with the atmosphere to reduce speed for landing, expansive heat shielding materials are vital, and a Space Shuttle must undergo maintenance each time before its next mission. All the budget-busting Space Shuttles were decommissioned in 2011.

On top of costs, NASA officials have to consider political risks before pouring resources into new technologies like reusable rockets, but private entities like SpaceX and Blue Origin enjoy more autonomy as long as their superrich owners are willing to splash cash to pursue their own curiosity and dreams.

Higher risks mean fat mark-ups. Musk once revealed that the overall fuel costs for one single launch is around US$300,000, almost negligible compared with the US$60 million price tag of one rocket. Future launches can be dramatically cheaper – even one hundredth of the prevailing price levels – if the rockets can be reused after simple maintenance.

Only a free market can best nurture scientific advancement, as already shown in the technological rivalry between western and communist powers. And SpaceX and Blue Origin’s remarkable feat over NASA, FKA and other state-run agencies is another convincing proof of the might of a free economy.

This article appeared in the Hong Kong Economic Journal on Dec. 29.

Translation by Frank Chen

[Chinese version 中文版]

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Former full-time member of the Hong Kong Government’s Central Policy Unit, former editor-in-chief of the Hong Kong Economic Journal

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