Just before Christmas, the U.S. Department of Commerce (DoC) Bureau of Economic Analysis (BEA) posted a notice–a Christmas gift for the space industry?–that it is developing a Space Economy Satellite Account (SESA) in partnership with the DoC’s Office of Space Commerce.
According to the notice, the SESA is a new, collaborative effort to measure the relative importance of the space sector on the U.S. economy, with a special emphasis on the growing commercial space segment. If thoughtfully formulated, the initiative could be a positive for the space industry. After all, without a baseline, it is difficult to measure industry growth.
As noted by the BEA, even the term “commercial” is disputed by the many organizations that monitor the space industry. This disparity in defining, gathering, and measuring data has resulted in these organizations estimating vastly different size and trajectory figures for the space economy, with no apparent uniformity in either approach or measurement. For example, two leading research organizations, The Space Foundation and Bryce Space and Technology, have separately sized the 2018 space economy at $360-415 billion (with the U.S. government representing nearly 12% of global space activity).
The Bureau wants to change that, or at least throw its hat in the ring, by providing definitions for “commercial space” and “space economy.” With that first step done, the BEA can then work to establish baselines for a U.S. space economy framework. This framework would help identify the information that needs to be collected and methods for collecting it. The resulting data would be public, and hopefully, provide relevant and robust datasets with unquestioned provenance.
This account could be an analyst’s gold mine. But…it depends.
The “800-ton launch vehicle in the room” is: will the classified space spending of the DoD come to light, directly or indirectly, during these efforts? In 2018, estimates of the DoD’s overall space spending represented the largest share of space spending (nearly 51%) in the U.S. government, at $24.5 billion. A few research organizations have estimated the DoD’s classified space budget to be two-thirds of that spending. These estimates indicate that the DoD’s classified space spending is too significant to the U.S. space industry to be overlooked.
Right now, many Global Space Economy numbers that include classified DoD spending are based on estimates. Of course, the various groups are applying different methodologies to arrive at those estimates. A true measure of the U.S. space economy isn’t likely without a minimal level of transparency from the DoD.
Professionals involved in the industry, and people wanting to jump in, will get a more honest picture of what’s happening in the U.S. space economy. Lawmakers, if they do their homework, will be able to “help” with informed regulation—critical for fostering growth. The data and standardization are sorely needed, which is why we are tentatively encouraged – but withholding judgment – until we understand the BEA’s proposed framework.
Time will tell if the BEA’s recent Christmas gift is useful to the space industry.