10 Key Factors Powering the Space Economy’s Next Expansion

In the near future humans will be living and working in space habitats such as this one, designed by Teague.
Image credit: Teague

A commercial look at how space-tech, policy, and capital are creating new markets across Earth and orbit

There are ten forces now shaping the space economy—from reusable launch and mass-produced constellations to direct-to-device connectivity, space data + AI, ISAM, and cloud-native ground systems—and each creates revenue, lowers risk, or opens entirely new markets. For every factor there is a commercial mechanism, which industries are affected (telecoms, finance, energy, logistics, pharma and more), and whether value comes from serving existing demand or unlocking new categories. It matters now because falling access costs, open standards and outcome-based procurement are compounding, turning bespoke missions into interoperable platforms that will underpin growth on Earth and in orbit.

1. Reusable launch, space habitats, and collapsing access costs

Cheaper, more frequent access to orbit turns one-off “projects” into repeatable “products.” As $/kg falls and cadence rises, operators compress time-to-revenue and de-risk new concepts (rideshare, hosted payloads). Fixed-price, milestone-based public procurement—pioneered in NASA’s COTS/CRS and Commercial Crew eras—shifted risk to suppliers and catalysed private capacity, with formal evaluations documenting the model’s mechanics. For lunar work, CLPS extends the same service-buying approach to the Moon. Together these frameworks underpin scalable commercial pipelines rather than bespoke vehicles.

As flight cadence grows, habitable infrastructure becomes a hard requirement: crews need safe, psychologically supportive places to live and work if missions are to scale beyond sprints. Design leaders such as Teague—working with NASA under a Space Act Agreement—are applying human-centred habitat layouts that balance efficiency with wellbeing (privacy, comfort, long-stay routines), signalling how space habitats will mature from concepts to standard kit alongside reusable launch.

Commercial impact: cheaper service for existing GEO/LEO comms; faster iteration for EO and on-orbit logistics; and a path to sustained presence as habitats turn workforce stays from exceptions into normal operations.

2. Constellations and SmallSats as a scalable architecture

Standardised buses, off-the-shelf components and agile production turned satellites into a portfolio business: fleets refresh often, iterate quickly and price like subscriptions. Independent market and trade analyses show constellations now dominate SmallSat manifests, with CubeSat heritage lowering build and integration costs and enabling daily-revisit imaging and global IoT.

Commercial impact: serves legacy EO/comms with higher revisit; creates persistent global sensing, on-demand tasking and mass-market IoT.

3. Ubiquitous connectivity (direct-to-device and 5G-NTN)

Non-terrestrial networks bring satellites into the 3GPP standard stack so ordinary phones can message or receive SOS beyond tower reach. Release-17 introduced the first normative NTN requirements, unlocking carrier–satellite partnerships and device-level features that expand ARPU while improving resilience during disasters.

Commercial impact: serves rural backhaul and mobility; creates direct-to-device messaging, asset tracking and ubiquitous IoT.

4. Space data + AI as critical infrastructure

Earth-observation, RF sensing and PNT now feed risk models in finance/insurance, crop intelligence in agri-food, and ETA engines in logistics. The World Economic Forum–McKinsey outlook frames the space economy as “backbone + reach”: core infrastructure plus cross-sector applications that could take the market from ~$630B (2023) to $1.8T by 2035. That framing matches the reality: data and timing are inputs to almost every modern workflow, so space quietly raises productivity across the stack.

Commercial impact: serves mapping/monitoring with richer cadence; creates predictive logistics, climate-risk services, and carbon-MRV products.

5. Government demand shifting to commercial services

Agencies increasingly buy outcomes—cargo, crew, lunar payload delivery—instead of owning hardware. That gives suppliers revenue visibility and accelerates scaling while preserving competition. NASA’s histories and audits document how performance-based, fixed-price milestones worked in COTS/CRS and Commercial Crew; CLPS applies a similar pattern for frequent, affordable lunar deliveries, even as recent OIG reports note schedule/cost realities to manage.

Commercial impact: serves civil missions efficiently; creates lunar delivery, science-as-a-service and, over time, cislunar logistics.

6. Deepening capital stacks

Space is no longer venture-only. Corporate strategics, sovereign funds, export credit and debt now co-finance capex-heavy plays, while public markets and infrastructure investors eye recurring-revenue models (bandwidth, data, services). Global outlooks from WEF/McKinsey echo this maturing finance mix as a precondition for reaching the 2035 opportunity—particularly in connectivity, PNT, EO and downstream analytics.

Commercial impact: serves scaling needs of established operators; creates financing routes for in-space servicing, orbital factories and data platforms.

7. Security, traffic management and debris mitigation

As orbits crowd, conjunction warnings, manoeuvre planning and debris removal become must-have line items. The U.S. Office of Space Commerce’s TraCSS aims to provide baseline SSA data/services as a public good that commercial players can build upon; industry coverage and policy briefs argue that a government-led safety layer reduces systemic risk and keeps markets contestable.

Commercial impact: serves secure satcom/ISR; creates SSA/STM software, debris remediation and new orbital insurance products.

8. In-space operations and manufacturing (ISAM)

Microgravity enables premium materials and bioprocesses that can command high margins on Earth. In 2024–25, the ISS National Lab reported more than 11 km of ZBLAN fibre produced on orbit, including a kilometre-plus single pull—evidence that process control is moving beyond lab novelty. That, combined with maturing re-entry and logistics, sets the stage for orbital “manufacturing-as-a-service” in fibres, biologics and advanced components.

Commercial impact: serves R&D and prototyping; creates orbital factories, on-orbit assembly and servicing depots.

9. National strategies and internationalisation

More countries are adopting space strategies and raising civil budgets, creating local demand and thicker supply chains. European and OECD reporting shows steady increases in public outlays and broader participation, which spreads risk, anchors regional clusters and grows the buyer base for commercial services without over-reliance on a single sovereign.

Commercial impact: serves sovereign EO/telecom needs; creates regional launch, public-private hubs and export corridors.

10. Digitalisation of the space stack (cloud + software-defined space)

Cloud ground stations turn antenna time into on-demand minutes, stream downlinks straight into storage/compute, and shrink latency from acquisition to analytics. Paired with software-defined payloads, operators can re-task satellites post-launch and ship features like software, turning lumpy capex into recurring opex. Major cloud providers now offer managed ground services with seconds-to-bucket data paths for rapid processing.

Commercial impact: serves traditional ground ops more cheaply; creates “space-data platforms,” app ecosystems and faster feature cycles.

Commercial through-line

Across these ten factors, three mechanisms repeat. Standardisation (3GPP NTN, SSA interfaces, beam-safety norms) opens participation and cuts integration cost. Outcome-based procurement (milestone payments, service-level agreements) accelerates private investment and widens the supplier base. And productisation (constellations, cloud ground, software-defined payloads) converts bespoke hardware into recurring services. Together they explain why the fastest growth in the 2035 outlook sits in applications and data-rich services layered atop the backbone.

Who’s impacted—and where new value appears

Telecom operators and device makers can fold satellite connectivity into their bundles, opening new revenue from remote and IoT customers through non-terrestrial networks and direct-to-device messaging. Financial services, insurance and commodities firms can replace lagging reports with live Earth-observation and positioning/navigation/timing feeds, pricing risk with less uncertainty and packaging the result as subscription data and model-as-a-service. Agriculture, energy and logistics gain from precision inputs and smarter routing and dispatch; further out, they could tap firm baseload power if space-based solar moves from demonstrations to concession agreements. Pharmaceutical, optics and advanced-manufacturing companies can source premium materials made in microgravity as processes mature from experiments to repeatable production runs. The public sector and regulators benefit from safer orbits via space-traffic coordination initiatives such as TraCSS, while broader supplier pools and services-first procurement improve fiscal multipliers.

Conclusion

These factors show a sector crossing from bespoke missions to interoperable platforms. Reusable launch and productised spacecraft shrink time-to-market; standardised connectivity and cloudified ground segments turn missions into ongoing services; policy shifts and deeper capital stacks convert technical progress into bankable demand. The effects compound: cheaper access unlocks constellations; constellations generate data; data powers AI products that cut risk and cost across agriculture, finance, energy and logistics; and early in-space manufacturing adds premium SKUs Earth struggles to make. If governments keep buying outcomes, standards stay open, and finance targets services with measurable performance, the space economy moves from niche to necessary—lowering costs in today’s markets while opening entirely new ones in orbit and, soon enough, on the Moon.