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When it comes to privatisation of space exploration, it is more than just commercializing a vacation opportunity for the uber rich. It is about how the industry of space discovery will evolve and develop, from the fledgling form it is in today.

For a long time, The space industry was dominated by state-led companies, and used for research operations, communications and defence purposes. Space exploration emerged around World War II, to supplement the growth of the aeronautical industry – before this space related research was generally done in universities. Gradually, entrepreneurs were able to identify the scope of development that the industry possessed. SpaceX was successful in breaking the oligopoly that government space agencies had in the US, by being the first private firm to dock a spacecraft (Dragon) at the International Space Station (ISS) in 2012. SpaceX recently became the first private company to perform a manned spaceflight to the ISS in 2020, in collaboration with NASA. Gradually, American companies entered the industry and gained traction: about $19 billion of private capital is currently invested in hundreds of such companies.

With the increasing number of entrepreneurial space companies, there has been a shift in the goals and objectives of the industry. It is no longer just a means of improving communications by launching satellites. Players aim to cut costs drastically through reusable and expendable launch vehicles (fuel is a very minor component of cost; it is mainly composed of expenditure on research and development). Many private space companies are also ambitious and futuristic – they also plan to mine extra-terrestrial bodies rich in resources from outer space.

Interdependency and Support – NASA vs Private

However, private players wouldn’t have been able to succeed without support from the Government and state-backed companies, as the majority of their contracts are related to launches, followed by satellites and then research. SpaceX, for instance, without NASA’s funding, would have perished and gone bankrupt in 2008. NASA acts as a customer by contracting private companies for operations, and provides capital to them for R&D, operations and other purposes. Lockheed Martin and Boeing, two aerospace private companies, have worked under the guidance of NASA manufacturing a rocket and a capsule owned by the latter. In 2020, NASA chose Blue Origin, Dynetics and SpaceX, “the best of the industry”, for its next lunar operation.

Such public funding has been doubling each year due to large service contracts, which provide a scope for established private companies to keep thriving while also encouraging fresh entrepreneurship in the industry. The aim of this support is that in the future, private companies will provide NASA with crew and cargo transportations – this idea came up after NASA’s space shuttle program came to an end. While industries like satellites and logistics are majorly funded privately since they have prominent commercial backing and have proven to be a success, biospheres (ecological systems that demonstrate ability to support human life in outer space) and launches are dominated by public funding.

Pros and Cons of Privatisation

Privatisation of space exploration has had many benefits for the space industry in the 21st century. Private companies have a greater degree of autonomy in making decisions, which enables them to take up new projects while taxpayer-funded institutions are accountable to the Government and hence, have to often limit themselves. Moreover, there is quick decision making in private companies while the same process in a public enterprise would have to pass through a number of stages. This advantage has allowed companies like SpaceX, Blue Origin, etc. to cut their costs substantially and perform operations like launching a rocket to ISS at merely $57 million per seat as compared to $80 million per seat if aboard a Russian shuttle, and $450 million each mission before NASA ended its space shuttle program. Moreover, making reusable landing rocket launchers, improvements in assembly lines and other such operations further ensure lower costs.

Due to the well- known success of the top few private space companies, many new small companies such as Firefly systems and Vector launch have been able to raise substantial private capital as well. The growth in the space industry also provides employment to millions all over the world, and the rise in the number of private space companies promotes competition amongst them and encourages constant improvements and advancements. Lastly, the publicity of their operations, like live streaming launches, has sparked widespread interest in space exploration among the general public.

However, privatisation might result in the polarisation of space reach and formation of an oligopoly in the space industry as only the few dominating at the top would form an oligopoly. Instead of being industry-wide, growth can become lopsided and biased. Secondly, loss of government control, which provides a firm sense of accountability to space projects, might be detrimental to the process.

India – ISRO and others


In June 2020, the Indian Government made a historic move by setting up IN-SPACe, an organisation aimed at increasing the participation of private players in the Indian space industry. It is a part of ISRO’s plan to make space-related applications and services more easily available to all. In-SPACe will look into the needs and desires of private companies, and try to fulfil them, in coordination with ISRO. Not just that, IN-SPACe also aims to aid the ISRO, and act as a helping hand by looking after its day to day operations and lower priority tasks, so that ISRO can focus on research and development.

Skyroot Aerospace

The Hyderabad-based private company, founded in 2018, test-fired ‘Raman’ (engine for the top segment of their upcoming launch projects) on 12th August last year, becoming the first Indian private company to do so. A unique feature of Raman was that it was built using 3-D printing technology. Because of this, Skyroot were able to almost halve the engine mass, and reduce lead time by about 80%. The company intends to have its first rocket ‘Vikram 1’ ready by the end of 2021, and launched in December.

Bellatrix Aerospace

Established in Bangalore in 2015, Bellatrix Aerospace is designing a reusable launch vehicle called ‘Chetak’, that uses methane as fuel, and works on an electric- propulsion system. Apart from significantly reducing the cost of launching microsatellites, it will also decrease the wait time required. The company has secured more than $3 billion in funding, and was the co-winner in the Space Tech Solutions category of India’s National Startup Awards, 2020.

Future Prospects

As private companies help with operations related to satellite channels, ISS, moon and Mars, government space agencies can redirect their focus to deep space exploration and conduct more operations like the Hubble telescope, which might still be difficult to commercialise, because of their scale and complexity. Private space companies and public agencies need to work hand in hand so that the space industry can continue to expand and grow.

By Khushi Kapoor and Keshav Todi


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