Submission from Space Future Consulting
Over the past half-century the space industry
has received very large public subsidiesseveral billion
pounds in Britain, one trillion dollars in the OECD, and more
elsewhere. However, it has not achieved commensurate economic
benefits. Notably, the commercial space industry has a turnover
of just a few percent of governments' cumulative expenditure,
and the "return on investment", if measured conventionally,
would be very low.
The reason for this failure is not a mystery,
although it is not often stated. It is because investment has
been used to develop space systems for which there is little commercial
demand, and it has not been used to develop services which the
general public most wish to buy.
The service which is today widely recognised
to have the greatest economic potential is passenger space travel,
or "space tourism". Market research has revealed potentially
very large demand, and engineers have plans for vehicles to cut
the cost of space travel to a small fraction of the cost of the
expendable and partly-expendable rockets used for space activities
For a number of reasons government space agencies
remain extremely reluctant to even consider the subject of passenger
travel. This reluctance has been particularly clear in the case
of the BNSC since July 2000 when the parliamentary Trade and Industry
Committee published its Tenth Report, which criticised the failure
of the BNSC's efforts at commercialisation and urged HMG to study
the feasibility of passenger space travel.
However, the BNSC has continued to ignore the
subject, including in a series of commissioned reports, and to
refuse any funding, without explanationwhile spending a
further 900 million pounds on space activities with little commercial
benefit. Yet with a budget of just a few percent of this, British
industry could already be leading the new industry of passenger
Correcting this policy error would have many
economic benefits and create new opportunities for space researchers
by sharply reducing the cost of space flight, which has not fallen
at all in 45 years, due to existing space policy. It could also
stimulate children to study a wide range of science and engineering
subjects, reversing the trend of recent years.
The costly failure of the current system of
policy-making in this matter should be recognised. Such failure
is a predictable result of decision making by a monopoly agency
without an effective external review mechanism.
WHICH SFC WOULD
1. Poor economic performance of space industry
From the economic point of view, the space industry's
performance has been very poor: despite approximately $1 trillion
of investment over 45 years, the turnover of commercial space
activities is just a few percent of this investment to date. In
recent years competition from low-cost countries has been growing,
and the industry has been consolidating and reducing employment:
Table 1, from a 2003 report by the US Federal Aviation Administration,
shows the weak condition of the US space industry:
US SPACE ENGINEERING EMPLOYMENT 
|Launch vehicle manufacturing and services
Recent European data tell a similar story: European space
industry employment reportedly fell by 20% from 1995 to 2005;
the major space engineering company Astrium has cut 3,300 staff
since 2003; and in 2005 alone, prime contractors cut 2,400 staff
or 13.5% of their total .
2. Reason for space industry's poor economic performance
The major reason for the failure of space commercialisation
to date is because government investment has not been used to
develop services which the public wish to buy on a large scale.
Despite spending $1 trillion on civil space activities, OECD governments
have not reduced the cost of space travel at allit is the
same in 2006 as it was for the first space flight 45 years ago.
That is, the cheapest and safest means of reaching orbit is to
use the "Soyuz" rocket which carried Yuri Gagarin, and
which was designed during the 1950s. Such stagnation in cost for
half a century may be unique in the history of transportation.
3. Promise of passenger space travel industry increasingly
The most promising market for space activities is passenger
travelas the author first argued publicly 20 years ago
; as Nasa acknowledged in 1998 (extensively referencing the
author's work) ; and as Space Future Consulting submitted to
the Trade and Industry Select Committee in 2000 , along with
four other Submissions recommending the subject [6, 7, 8, 9].
Since then, much further evidence has accumulated that developing
passenger space travel is both feasible and economically promising.
In 2001 Dennis Tito became the first person to pay to fly to space,
to world-wide acclaim; in 2002 the US Department of Commerce published
a report strongly supporting the importance of sub-orbital passenger
vehicles ; in 2003 Nasa published a report estimating that
sub-orbital passenger travel might reach a turnover of $4 billion/year
(about 5 times the turnover of commercial satellite launch) ;
in 2004 SpaceShipOne's successful space flights appeared on the
front pages of nearly every newspaper in the world; and in 2006
an Esa staff-member has stated "...space tourism has a great
potential to become a very successful business and a major driver
for space technology development" and Esa has offered study
contracts to teams developing passenger space vehicles .
FEASIBLE SPACE TRAVEL INDUSTRY WITHIN 30 YEARS 
4. Potentially large scale of passenger space travel industry
Although it is often suggested that space tourism will remain
a small-scale business for the very rich, there are no technical
or economic reasons to prevent it growing into a major global
industry. Figure 1, published by Space Future Consulting (SFC)
in 1999, is based on the scenario developed in the 10-year "Space
Tourism Study Programme" carried out by the Japanese Rocket
Society from 1993 to 2002 . It shows a turnover of some $100
billion/year, many times larger than estimates of the sub-orbital
passenger travel market.
5. Passenger space travel could have started 30 years ago
It is very important to understand that the performance of
SpaceShipOne was exceeded by the US X15 rocketplane in the 1960s,
and nearly matched by the British SR53 rocketplane in 1957. Consequently
commercial sub-orbital passenger flights could have started in
the early 1970s if space policy had been economically motivated.
In that case, orbital passenger travel could have started during
the 1980s, and the situation shown in Figure 1 would be more-or-less
realised by now.
6. Great economic value of growth of passenger space travel
To realise the situation in Figure 1 would require a subsidy
equal to 10% of space agencies' budgets; most of the investment
required would be commercial, as in the air travel and hotel industries.
If work to develop this industry had started during the 1960s,
it would have been very beneficial for economic growth and employment
world-wide. Today, unemployment is a very serious global problem:
in the USA it is 10 million higher than in past economic recoveries;
in Europe 10% unemployment is almost chronic in Germany, France
and Italy, leading to riots, racism and neo-nazism; and it is
much higher in many poor countries. This ominous level of unemployment
is largely due to the lack of new industries that are urgently
needed to create new jobs to replace those lost as "globalisation"
7. Low launch costs also beneficical for the environment
By greatly lowering the cost of launch, passenger space travel
would make many other space activities commercially feasiblenotably
the supply of CO2-free solar-generated power from space .
Consequently it is potentially very important for protecting the
global environment. If the situation in Figure 1 had been realised
already, the world economy would be in a far healthier state,
with much lower unemployment and far lower dependence on polluting
fossil fuels. From a wider perspective, there would also be no
need for the ominous discussion and planning for "resource
wars" that is so prevalent today [16, 17, 18], since access
to space resources would already be routine. Indeed, it is worth
noting that unemployment and poverty are the source of many of
the problems in the world today, and it is recognised that the
approach towards resource wars will lead to loss of civil libertiesa
process that has already begun .
8. Wide educational benefits of developing passenger space
In view of childrens' spontaneous interest in space, the
development of space travel services for the general public and
their utilisation in education are likely to stimulate children's
and young people's interest in a range of related science and
engineering topics. This effect is likely to be much greater than
current efforts by space agencies, which involve indirect activities
such as watching videos of astronauts and playing with water-rockets.
This subject is discussed further in Annex 1.
9. Failure of space policy-making process
Space agencies have responsibility for commercial space development:
for example, Nasa is required by law "...to encourage, to
the maximum extent possible, the fullest commercial use of space",
and the BNSC is required to "...help industry maximise profitable
space based business opportunities" . However, space
agencies have not done this, despite using very large amounts
of taxpayers' funding. Although UK space policy was revised in
the 1980s, nominally to achieve greater economic benefits, it
has largely failed. The Trade and Industry Select Committee's
2000 report stated this, and quoted SFC in urging the BNSC to
consider passenger space travel  (see Annex 2, paragraph A2.3).
In view of the potentially large benefits described above in contrast
to the poor economic performance of actual space activities, HMG's
refusal to support work in this field for 15 years has unnecessarily
continued the industry's commercial failure and burden on taxpayers.
10. Parliamentary criticism of space policy failure unheeded
Despite the comments in the Trade and Industry Select Committee's
2000 report, the BNSC and British space policy makers have continued
to ignore their advice, as described in Annex 2. Moreover, since
2000 the BNSC has spent a further 900 million pounds with little
economic benefit, in the sense of creating few new commercially
profitable activities. (Recent claims of the "success"
of British space policy due to the growth of sales of satellite
television decoder boxes and programmes reflect the "watering
down" of objectives, as discussed in Annex 2.)
11. Minimal investment cost of starting space travel industry
If even 5% of the 900 million pounds spent via the BNSC just
since 2000 had been used to develop a vehicle and facilities suitable
for certification for sub-orbital passenger space travel, British
industry could already be leading the world in this field. 15
years of unjustified refusal to fund passenger space travel research
has imposed heavy costs in lost opportunities.
12. Necessary condition for economic success of space industry
So long as the space industry refuses to supply services
which large numbers of the general public wish to buy, it cannot
grow, but will remain a burden on taxpayers. Although this may
seem obvious it has been ignored by space agencies for decades,
with impunity. It is high time that this extremely costly policy
failure is corrected, and taxpayers receive a return commensurate
to the large costs they have borne to date. This could make a
major contribution to achieving a brighter future for humanity.
13. British space science excellent
The above comments are not criticisms of British space science.
This is of the highest quality, and should be encouraged, along
with scientific research in many other fields. However, HMG expenditure
on space is not solely for scientific research; it is explicitly
intended to also achieve economic benefit. Failure to do so must
be recognised as failure to achieve stated policy objectives,
as noted in 2000 by the Trade and Industry Select Committee .
SFC WOULD LIKE
14. Recognise the importance of low-cost passenger space
A major change needs to be made in British space policy:
the government must recognise Passenger Space Travel as a new
category of activity with potentially great economic value, and
should initiate relevant activities to exploit the major commercial
opportunities that it offers. In doing so it should give high
priority to achieving commercial value from government space investment.
15. Provide support to achieve passenger space travel as
soon as possible
Implementing policies to catch up with the missed opportunities
of the past few decades as soon as possible would be extremely
beneficialeconomically, educationally, environmentally
16. Start with sub-orbital travel
Britain is home to the longest-standing proposal for a sub-orbital
passenger vehicle, which has received no support at all for 15
years, during which HMG has spent nearly 3,000 million pounds
on civil space activities, with no commensurate commercial benefit.
This failure should be corrected, and this project should be supported
generously; just 10% of current space expenditure over a few years
would enable rapid success, and start progress towards orbital
17. Fund primarily via civil aviation
The business model of passenger space travel is similar to
passenger air travel, and space agencies have little experience
or know-how relevant to developing passenger travel services.
Consequently it will be most effective for HMG to fund this work
primarily via civil aviation organisations. The growth of space
travel will lead to growth in a wide range of related business
activities: spacelines and spaceports; manufacturing, maintenance
and repair of spacecraft, engines and components; training and
certification for a wide range of new jobs; space travel companies,
hotels and marketing; and financial services including insurance,
banking and leasing. Britain has enormous expertise relevant to
all of these activities but currently lacks commercial growth
opportunities, and it could and should be leading this field.
The inability to help this development which the BNSC has demonstrated
over the past 15 years is itself a good reason to give the responsibility
to civil aviation organisations. This is even clearer when one
considers that the CAA has such relevant experience as having
certificated rocket-assisted Comet airliners for passenger carrying
as long ago as 1952, and the supersonic airliner Concorde which
required major innovation in many engineering and regulatory aspects,
including wide international collaboration.
18. Widen scope of space research funding
The scope of space research funding should be widened to
include many new activities, including particularly activities
with potential arising with the use of low-cost reusable launch
vehicles. Among other subjects, space science funding should also
include relevant social sciences.
19. Recognise the value of correct research, and support
If the funding of engineering and science research is to
achieve its objectives, successful researchers must be recognised
honestly and supported correspondingly, whether in the physical
or social sciences. Not to do so is contrary to the most basic
principles of science and technology policy, whereby those who
first understand and explain some significant phenomenon are given
due recognition for doing so, and support to extend their work.
In addition, they must be supported even where their results are
"inconvenient" for government organisations, for example
by criticising existing funding allocation; in the field of policy
science such considerations are routine. As advocates of space
tourism, Bristol Spaceplanes' and Space Future Consulting's work
has been criticised as being "speculative". However,
they have researched and argued logically and consistently for
20 years; no one has published any reasoned criticism in the research
literature; and recent developments show that they have been correct
so farfor 20 years before space agencies . Moreover,
no alternative proposal for space activities of anywhere near
similar economic value has resulted from the nearly 4,000 million
pounds spent by the BNSC, nor from the $400,000 million spent
by OECD space agencies during these 20 years! To continue to refuse
to recognise and support the work of such successful innovative
researchers would make a travesty of science and technology policy.
20. Recognise the failure of the space policy making process
in this key area
The failure of the monopoly-dominated space policy making
process, as noted by the Trade and Industry Select Committee in
2000, must be acknowledged. The question of how best to avoid
such policy failures in future is important, and deserves consideration
under the appropriate auspices. Clearly the process must become
more independent from space agencies, and must be opened to input
from outside and to independent scrutiny .
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|16.||M Klare, "Resource Wars: The New Landscape of Global Conflict", Owl Books, 2002.
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