The Space Productivity Dividend: Measuring the Hidden TFP from GPS, Copernicus and Next-Gen Constellations
Space services quietly raise productivity across nearly every sector on Earth
A lot of space’s value shows up as somebody else’s efficiency. Positioning, navigation and timing (PNT) keep networks synchronised; Earth-observation (EO) de-risks farming, energy and insurance; satellite communications glue together remote operations. Because those gains land in agriculture, logistics, finance and utilities, national accounts often miss them. To invest wisely—and to avoid hype cycles—we need to measure this “space TFP” properly and make it easier for firms to plug in.
The anchors are solid. RTI International’s study for the U.S. Department of Commerce estimates GPS has generated roughly $1.4 trillion in private-sector benefits since the 1980s, and warns that a prolonged outage would cost around $1 billion per day; the Commerce Department and NIST highlight the same order of magnitude. On EO, a growing body of evidence—European Commission and ESA summaries; the EARSC “Sentinel Benefits Study” series—links Copernicus data to higher yields, lower input use, faster disaster response and more efficient siting for energy assets. On statistics, the U.S. Bureau of Economic Analysis has created a Space Economy Satellite Account precisely to separate space inputs from the rest of the economy and make them comparable to GDP—an approach analysts urge others to emulate.
But we still under-count the dividend. A farmer who trims fertiliser use thanks to Sentinel-2 vegetation indices books lower costs; the “space” contribution is invisible. An insurer that resolves flood claims in days using SAR imagery from Copernicus and weather reanalysis (ERA5) shows a lower combined ratio; the satellite value sits in a footnote. A grid operator that dispatches more efficiently with better wind forecasts saves fuel; again, the productivity sits elsewhere. The outcome is real; the attribution is fuzzy.
Three moves would fix that. First, expand satellite accounting. BEA’s work shows how: define a consistent list of space goods and services; track their prices, outputs and inputs; and integrate them with national accounts so the “space layer” is no longer hidden. If Europe followed suit, cross-country comparisons would finally have a common base. Second, standardise interfaces. When EO tasking, data delivery and metadata are exposed through open APIs with provenance and uncertainty flags, SMEs and regulated industries can adopt space inputs without bespoke integration projects; ESA and EARSC material already points to this as a diffusion bottleneck. Third, reform procurement. Governments should buy outcomes—forecast-error reductions, service-level times to claims triage, verified yield gains—rather than pet instruments. That forces providers to commoditise the plumbing and compete on measurable performance.
Commercial adoption follows naturally when incentives align. Logistics networks that embed PNT synchronisation and EO-driven routing move goods with fewer idle miles; banks that use near-real-time hazard data price risk more accurately; utilities that co-optimise generation and demand with satellite weather cut balancing costs. In each case, the “productivity bump” accrues outside the space sector—but the recurring revenue accrues to it.
This lens also helps us judge the next wave—microgravity manufacturing and cislunar logistics—without wishful thinking. The bar is simple: do space-made fibres, biologics or components deliver a measurable, priced advantage at the point of use? If yes, they belong in the productivity account; if not, they stay in the lab until they do. Meanwhile, we can bank what already works—GPS, Copernicus, satcom—and make it easier for markets and statisticians to see.
Treat space as the quiet layer that upgrades everything else, count it correctly, and capital will flow to the parts that really move the needle. That’s how a frontier becomes a durable productivity engine rather than a headline cycle.
