THE BLOG
12/30/2015 05:07 pm ET Updated Dec 06, 2017

2016's Big Growth Industry

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It has been my thinking lately that one of the big growth industries for 2016 will be the Private Space Industry. This thinking of mine has been driven by two key events which have occurred in the last couple months of 2015. The first was the successful landing of Blue Origin's New Shepherd rocket booster on November the 23rd. The second was the landing of Space X's Falcon 9 rocket one month later. In this article I will write about why these two events were so important to private space flight, and how much having re-usable rockets will disrupt the Space Industry.

The New Shepherd Rocket Booster launched off at 11.21am on November the 23rd. It launched the New Shepherd space vehicle into space and started it's descent from 62 miles above the Earth's service. Normally when rocket boosters travel back down to Earth, they gradually break up in the atmosphere, before smashing on the ground below. This time though, for the first time ever, the rocket descended back towards a landing pad in a controlled manner. Worth mentioning is that this could be done much easier than the Space X Falcon 9 rocket, which is harder to land, because the New Shepherd is thicker and much shorter.

The next month Space X successfully landed it's Falcon 9 rocket after a few previous failed attempts. While Space X did not achieve the first successful rocket landing, that title obviously is now owned by Blue Origin, the Falcon 9's achievement is in many ways greater, because the aim's of the two vehicles are very different. The New Shepherd will operate for the purposes of Space Tourism, the Falcon 9 will not be engaged in doing space tourism at all; instead it will be utilized for supplying the International Space Station and for helping to launch satellite's. This will be done through the launch release of the Dragon capsule from the Falcon 9 rocket, which will be done in outer space orbit. The ability of the rocket to launch the capsule in space 'proper' means that the uses for the vehicle are a lot greater.

Space X's stated aim is the rather absurd goal to expand human life to other planets. On the other hand, Blue Origin's goal is to lower the cost of spaceflight in order to make space more accessible to private human's. These vastly different goals of the two companies make their achievements in successfully landing their rockets to be very different. But along with that, the different design of the rockets also makes their achievements radically different. The Falcon 9 is much taller and thinner than the New Shepherd, 229 feet vs. 60 feet. It is designed in this way so that it can cut through the Earth's atmosphere and reach outer orbit quickly. The New Shepherd meanwhile is only designed to reach sub-orbit.

Regarding re-usability, Elon Musk has said, "If one can figure out how to effectively reuse rockets just like airplanes, the cost of access to space will be reduced by as much as a factor of a hundred. A fully reusable vehicle has never been done before. That really is the fundamental breakthrough needed to revolutionize access to space". The possibility of lowering Space Travel by the factor of a hundred is the real reason why the landing of the two rockets was so significant. Having the ability to lower fixed costs by the factor of one hundred really is a disruptive force. Just think of the way that the music industry was disrupted by the likes of Apple and Napster? They were able to lower costs by such a dramatic extent that the adoption of their services became exponential. The same thing will happen now with Space Travel.

Space X in particular has set itself up as the company that holds the 'gateway' to space. Chairman Elon Musk has previously discussed launching 4000 satellites to bring internet access to the most remote parts of Earth. There is no doubt that we will see within the Private Space Industry an enormous disruption due to the enormous cost saving of having multiple-launch rockets. This will create a big investment opportunity, but while it may seem very exciting to invest directly into the Space Industry at this point in time, it is pretty impossible to do for someone without very deep pockets; like Jeff Bezos or Elon Musk. The smarter area to be investing in if one wants to capitalize from the 'Space Travel Boom', is to look to invest in the manufacturers that are supplying parts to these companies (including NASA), and have solid contracts in place to continue doing so for many years.