By 2035, the space economy is projected to reach $1.8 trillion.

Space technology could revolutionize the global economy.‍‍‍‍

Image source:Unsplash/NASA

Nikolai Khlystov

Head of Space Technology at the World Economic Forum's Center on the Fourth Industrial Revolution

Gayle Markovitz

Executive Editor for Text and Audio Content at the World Economic Forum

With the rapid advancement of space technology, the space economy is projected to reach $1.8 trillion by 2035.
The new report, "Space: A Key Opportunity to Drive Global Economic Growth by $1.8 Trillion," outlines the significant advancements made in the space economy.
The space economy not only creates business opportunities but also holds the potential to help tackle some of the world's most pressing challenges, such as climate change.

The space economy is entering a new era. A new report reveals that, thanks to the growing accessibility of satellite and rocket technologies, the space economy is projected to reach $1.8 trillion by 2035.

From weather forecasting to the ever-popular smart devices—like smartwatches—space technology powers a wide range of innovations. At the same time, space technology is benefiting an expanding array of stakeholders, including sectors such as retail, consumer goods and lifestyle industries, food and beverage, supply chains and transportation, as well as disaster risk reduction—and these fields are all reaping the rewards of space-based innovation.

Sebastian Buckup, a member of the World Economic Forum's Executive Committee, stated: "Space technology is now delivering unprecedented benefits to a growing number of stakeholders. As costs continue to decline and accessibility improves, these technologies could reshape entire industries—much like smartphones or cloud computing—and ultimately drive significant economic and societal impact."

The World Economic Forum and McKinsey & Company have jointly released a new report titled "Space: A Key Opportunity to Drive $1.8 Trillion in Global Economic Growth," outlining the pivotal advancements over the next decade that could shape the space industry and related sectors.

The report brings together insights from experts in the space industry and beyond, detailing the future trajectory of space technology—and highlighting how rapidly advancing and expanding space-tech capabilities are directly impacting other sectors.

Here's some information about the future of space development up to 2035.

1. Space's share of the global economy will increase.

The space economy is projected to grow from $630 billion in 2023 to $1.8 trillion by 2035, representing an average annual growth rate of 9%—a pace significantly faster than global GDP growth. Key drivers of this expansion will include space technologies such as communications, positioning, navigation, timing, and Earth observation (EO) services.

2. The influence of space will gradually extend beyond space itself.

Traditional hardware and service providers will see their share of the overall space economy gradually shrink, creating opportunities for the growth of other satellite- and space technology–dependent services, such as ride-hailing apps.

3. Space will strengthen the connection between people and goods.

By 2035, the five major industries—supply chain and transportation, food and beverage, defense, digital communications, as well as retail, consumer goods, and lifestyle sectors—are expected to account for 60% of the global space economy, with other industries also playing a significant role.

4. The returns on space investments will extend beyond the economic realm.

Space will play an increasingly vital role in addressing global challenges, such as disaster early warning, climate monitoring, strengthening humanitarian response capabilities, and fostering broader prosperity.

The development of the space economy

With declining launch costs and ongoing commercial innovation, the space sector is poised for even greater growth than ever before.

For instance, the number of satellites launched has been growing at a rate of 50% annually, while launch costs have dropped by a factor of 10 over the past two decades—making it increasingly affordable to send more satellites into space. Data is critical for connectivity, and as data prices continue to decline, this trend is poised to expand across various industries. Moreover, by the early or mid-2030s, mega-rocket technology is expected to become more widespread, further lowering both the cost and the types of objects that can be launched.

Additionally, a broader range of investors—including both state and non-state actors—are now getting involved in space investments. In 2021 and 2022, investment levels reached an all-time high, surpassing $70 billion.

Meanwhile, applications like space tourism are no longer straight out of science fiction. By 2035, the market is expected to reach $4 to $6 billion, with most of the revenue coming from short-term trips to space stations by ultra-wealthy individuals.

Michael Suffredini, CEO of Axiom Space, stated: "A key driver of civilizational progress lies in the synergistic interplay of supportive space policy frameworks, innovative business models, and the thriving growth of the space economy. In the future, space will not only be our destination—it will also give rise to a vibrant, interconnected economic ecosystem."

The report also notes that by 2035, the impact of space technology will expand significantly, potentially revolutionizing the global economy. For instance, industries like supply chains and transportation will benefit from more efficient, cost-effective logistics, while the food and beverage sector will see improved efficiency in delivering fresh products during the final-mile delivery phase.

Additionally, according to the report, sectors such as agriculture, information technology, insurance, and construction are all expected to benefit from the multi-billion-dollar gains, cost efficiencies, and environmental advantages brought about by space technology.

Agnieszka Lukaszczyk, Vice President of Government Affairs for Europe, the Middle East, and Africa at Planet Labs, stated: "For decades, Earth observation satellites have been an important yet limited-purpose tool. Now, the cloud computing, data, and AI revolutions are enabling Earth observation data to power countless everyday decisions—ranging from agriculture to ESG reporting."

How space is changing the world

Space holds the promise of helping address some of the world's most pressing challenges, such as the impacts of the climate crisis and economic inequality.

Space technology is already playing a critical role in disaster early warning and management. By enhancing monitoring of climate-related hazards, enabling broader access to resilient communication networks, and leveraging satellite-based positioning data for more precise tracking, space technology will continue to grow in significance in the years ahead.

Space technology can also enable innovative measures to monitor methane leaks in aging industrial infrastructure, supporting efforts to mitigate climate change.

Space technology also delivers significant socio-economic benefits. By enabling greater participation in education and economic activities, space plays a crucial role in addressing inequalities—such as bridging the digital divide, expanding access to education and healthcare, and providing precise monitoring of agriculture, natural resources, and environmental changes.

Embracing the potential of space

Looking ahead, the report highlights that every industry could become a driving force behind the space economy.

Ryan Brukardt, a Senior Partner at McKinsey & Company, noted: "Increasingly diverse industries—such as agriculture, construction, insurance, and climate change mitigation—are poised to drive and significantly contribute to the rapidly evolving emerging space economy. By recognizing and embracing the full potential of space, players in both the public and private sectors can spearhead the growth of the space economy, unlocking long-term benefits for years to come."

The report predicts that the global space economy will reach $1.8 trillion by 2035. However, thanks to increased access to data and lower costs of entering space, the space economy could potentially soar as high as $2.3 trillion.

Conversely, if access to space diminishes and it becomes harder to acquire key advancements in Earth-based technologies, the space economy could bottom out at as low as $1.4 trillion.

In any case, by understanding and embracing the potential of space, participants from both the public and private sectors will help unlock the countless transformative applications of space technology—benefiting everyone in the process.

The above content solely represents the author's personal views.This article is translated from the World Economic Forum's Agenda blog; the Chinese version is for reference only.Feel free to share this in your WeChat Moments; please leave a comment below the post if you'd like to republish.

Translated by: Di Chenjing | Edited by: Wang Can

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