The New Economy of Aerospace: Privatization and Future Opportunities

Innovative eyes on aerospace

With the emergence of robotics and nanotechnologies, we entered a Golden Age in the aerospace industry. International cooperation soared beyond Earth, with governments venturing into space with joint teams and missions.

And more recently, the unexpected has happened – private sector partners have joined the game and begun paving the way for an independent aerospace market.

As seen with the AgTech industry, there is a strong push for the privatization of aerospace, coming from governments and private companies alike. Why? Because privatization has the power to create a true win-win. It allows governments to reduce bureaucratic hurdles and budgets, and lets contracted companies provide private-sector efficiency, commercial discipline and a higher standard of service.

Privatization of the aerospace industry creates a win-win for governments and the private sector. Click To Tweet

With this huge shift, jaw-dropping innovations are emerging, thanks to non-traditional partnerships, rapid go-to-market and collaboration with new ideation partners.

Join us as we explore changes the aerospace industry is undergoing, all over and out of this world.

Who’s Doing What? The International Privatization Scene

Since 2009, the U.S. Department of Defense in-house aerospace innovation spending has declined by 21.1%. 2011 saw President Barack Obama retire the U.S. Space Shuttle Program, a game-changing decision, that has led NASA to solely rely on the private sector to send American astronauts into space.

NASA’s future goals, which include deep space exploration, sending astronauts to an asteroid and then to Mars, will have to be supported and serviced by private space companies.

In another hemisphere, in India, 2010 saw the launch of Make in India, a full-swing aerospace privatization initiative unveiled by Prime Minister Modi, announced at the Aero-India show attended by delegates from 33 countries and 326 private companies.

While the goal is to provide private foreign companies with opportunities and favorable conditions to manufacture their space-related products in India, the problem remains that Indian companies import most related parts – a fact Modi hopes to change.

Space is, by all means, a giant untapped market. Click To Tweet

In Israel, the government announced plans to privatize Israel Aerospace Industries (IAI), whose satellites, weapons and drone systems are sold to many countries around the world. The move aims to boost the industry and to bring the government a revenue of five billion shekels ($1.4 billion).

In 2024, the International Space Station (ISS) will be decommissioned, as its technology is becoming obsolete. So far, the U.S. has not announced any governmental plans to replace it.

After the US and EU imposed sanctions on Russia in connection with the conflict in Ukraine, Russia decided to detach its part of the ISS and create its own station, which it now views as a stepping stone toward achieving a manned lunar landing in 2030.

What’s In It for the Private Sector?

Space is, by all means, a giant untapped market. From new tourism opportunities to infinite amounts of natural resources, everyone wants to see what the next frontier can bring and how it can improve their specific sector.

Considering the fact that a half-kilometer-big S-type asteroid is valued at upwards of $20 trillion, it’s no wonder that powerful businesspeople such as Elon Musk, Jeff Bezos and Richard Branson have taken an active interest in commercializing space.

Orbital Technologies, a private Russian company, has unveiled plans for a space hotel. While they originally planned to host its first guests in 2016, they now believe they will make their dream a reality by 2020. Who will be able to visit the out-of-this-world hotel? Anyone who can afford it and agrees to go through a three-month long training before takeoff!

Other big names in the space-hotel game include Robert Bigelow, who built his first hotel in Las Vegas and now has his eyes on the stars.

Many other business visionaries and their companies are developing never-before-seen projects, poised to forever change the way we communicate, collaborate, do business and live our lives.

Agile, independent, entrepreneurial initiatives are becoming the name of aerospace game. Click To Tweet

From nano-satellites that create a global communication network of voice, data, and instant messaging to spacecraft with multi-planetary travel capacity – a space-metro, if you will – countless new technologies are bound to gain more ground in the years to come.

The Future: Embracing a Startup Mentality

The aerospace industry, as a whole, is adopting a robust startup mentality. Agile, independent, entrepreneurial initiatives are becoming the name of the game.

The industry is increasingly providing governments with better service at lower costs, and offering the general public new innovations and nearly unbelievable life changes.

But make no mistake – when national interests are at stake, governments can act like startups, too. National governments across the globe are taking creative and swift action on their own, like Russia building its own space station, Chile is promoting innovation and other countries driving innovation forward.

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