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The Fast Company Executive Board is a private, fee-based network of influential leaders, experts, executives, and entrepreneurs who share their insights with our audience.

How the new space race will spark a new industrial revolution

The innovation imperative is here, and it will change everything. Strap in and enjoy the rocket-ship ride.

How the new space race will spark a new industrial revolution
[Oleg_Yakovlev/AdobeStock]

It’s been more than 50 years since Neil Armstrong joined Buzz Aldrin and Michael Collins on the famed Apollo 11 lunar landing and declared the mission “one giant leap for mankind.” That fateful day in 1969 seized the world’s attention and opened minds to galaxies of possibilities.

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The problem, however, is that the inspirational high of Apollo 11 was followed by a gradual decline toward incremental thinking in space and sky. Once the U.S. claimed the massive and important public-relations victory of beating the Soviets to the moon, the mission was basically accomplished. NASA ran a few more space missions—some ill-fated like Apollo 13, and others tragic like Challenger—but eventually, our appetite for zero boundaries gave way to an era of zero risk.

For a half-century, the world has been inching along instead of innovating in space and sky technologies. After the Cold War, we began offshoring much of the American industrial sector and focused on developing the new knowledge economy, with a heavy emphasis on software, computer devices, and the internet.

These were not wrong decisions, but now we’re feeling the forces of change once again. This time, a second space race seems to be driving unprecedented innovation pressures in the legacy aerospace and astrospace sectors as well as a massive effort toward American reindustrialization. There’s a lot at stake, and everything is about to change.

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THE AEROSPACE “INNOVATION IMPERATIVE”

In the wake of the first Space Race, the U.S. has served as a kind of global enforcer, reigning in bad actors and monitoring global hot spots with the most powerful and ubiquitous military apparatus in human history. The world operated with an understanding that despite underlying tensions, certain activities—like invading a neighboring country with the intent to annex it—were non-starters.

In recent years, various countries have tested the limits of this global social contract, most dramatically with Russia’s invasion of Ukraine in February 2022. In connection with escalating global tensions, both China and Russia have developed and tested hypersonic missiles, leaving American military leaders worrying that potentially hostile nations are now ahead of the U.S. in the technological arms race.

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At the same time, NASA has moved away from owning the space platform and toward funding R&D and mission grants for private companies like Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin. China and Russia are filling up low-earth orbit with satellites—and, on at least one occasion, blowing one up and creating dangerous space debris—creating a land grab for limited LEO real estate. To maintain their strong positions on raw materials and manufacturing, China and Russia are racing the U.S. and friendly partners to establish a permanent base on our mineral-rich moon. On the civil aviation side, private companies are driving unprecedented innovations in electric flight, supersonic commercial flight, and flying taxis.

In short, we live in a time when profound geopolitical and economic forces are pushing the sectors of defense aerospace, civil aviation, and commercial space to innovate like crazy. At my company, we call this phenomenon the “innovation imperative,” because companies that want to play in this new “space,” so to speak, literally must innovate or die.

A NEW VALUE CHAIN FOR SPACE

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The internet has come a long way in 25 years. In the early days, companies like Pizza Hut put a simple form on a basic website and we called it e-commerce 1.0. If you wanted to order a pizza “online,” you’d input your phone number and get a call back a few minutes later.

Today, you can order almost anything and have it delivered to your door in no time. This evolution didn’t happen overnight. The consumer internet we enjoy today is the cumulative product of years and years of disruption in computer hardware, data storage, cloud computing, payments technology, supply chain development, and much more.

I believe a similar evolution is going to happen to support the space economy. Banking giant Citi recently predicted that the global space sector will pull in $1 trillion in sales by 2040, which reflects an internet-level economic opportunity. Equity investors are taking notice, pumping $14.5 billion into space ventures in 2021 alone. That money is literal rocket fuel.

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But money isn’t the only ingredient in innovation. Currently, the companies driving innovation are all platform level—think SpaceX, Rocket Lab, Relativity Space, and others. The space sector is still in its infancy, so these companies are currently making do with fully in-house subsystem development or modifications of solutions from legacy aerospace suppliers. This isn’t a sustainable path, just like it wasn’t sustainable for flat forms to serve as a middleman between patrons and their pizza in the internet’s early days.

Over the next decade, I believe a new value chain will develop around the constraining physical problems posed by the increasingly advanced mechanical, environmental, and computing needs of modern air and space platforms. A new class of companies can then emerge to develop and commercialize enabling technologies such as hydrogen power, nuclear propulsion, thermal management, advanced materials, additive manufacturing (e.g., 3D printing), and more. Once this new value chain matures, the aerospace supply chain built 75 years ago will likely become obsolete.

This new value chain, built against the backdrop of rising geopolitical tensions and faltering global supply chains, could help energize a multigenerational reindustrialization in America. Manufacturing can increasingly happen on American soil or in space itself, supporting a space sector that goes far beyond PR stunts for billionaires to fundamentally change how we approach everything from global internet access to monitoring of shipping containers and even biomedical R&D.

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The innovation imperative is here, and it will change everything. Strap in and enjoy the rocket-ship ride.


Brian McCann is CEO of Intergalactic, a thermal management systems integrator serving the space and aerospace sectors.  

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