The space industry has developed into a multi-billion dollar industry and has attracted considerable media attention in recent years, in part because of interest and investment from high profile billionaires like Paul Allen, Jeff Bezos, and Elon Musk, among others. These entrepreneurs have poured billions of dollars into their respective commercial space ventures and many other private sector investors have likewise turned their attention to the promising opportunities the industry presents.

It is easy to see the motivation when we examine the growth in revenues even as the commercial side was just getting rolling. Global revenues have increased from $175 billion in 2005 to almost $385 billion in 2017 – a growth rate of just under 7% per year. Moreover, despite the great recession, revenues grew unimpeded, with only one down year in 2009.

In order for the emerging space industry to realize its full market potential, an efficient and reliable regulatory regime is essential. U.S. interagency decisions across a range of fields, from space debris management to spectrum interference in low Earth orbit, will have consequential effects on the industry for years to come. For that reason, the U.S. Chamber recently announced the expansion of its Procurement and Space Industry Council to facilitate dialogue and engagement among industry and key oversight agencies.

A number of private sector forecasters predict the space economy will continue to grow dramatically. Goldman Sachs analysts predicted the sector would grow to about $1 trillion by 2040, consistent with a forecast by Morgan Stanley . On the high end, analysts at Bank of America Merrill Lynch predict the sector will surpass $3 trillion over the same period. In our estimation, this sector will increase from approximately $385 billion today to at least $1.5 trillion by 2040. That would amount to roughly 5% of U.S. GDP at that time, though the revenues would not all accrue to the U.S. This estimate is based on a growth rate of 6% per year, which is consistent with the pace of growth over the past 10 years. Can this rate of growth be sustained over such a long horizon?

Several reasons support the proposition that current growth rates can be sustained. First, total private investment is growing at a striking pace, according to research by Bryce Space and Technology . From 2000-2005, the industry received more than $1.1 billion in investment from private equity, venture capital, acquisitions, prizes and grants, and public offerings. By the 2012-2017 period, the industry had received more than $10.2 billion. The increased investment reflects the new opportunities in the commercial space sector and new startup ventures that did not exist a decade ago.

Furthermore, these investments are just the first wave. The real space revolution has yet to begin in earnest. Most of the current revenues from space activity accrue to industries, such as direct-to-home television and geolocation, navigation, and timing services. The next development phase will be decidedly different, potentially shifting into new product development, additive manufacturing in low-Earth orbit, and new activities like space mining. It is not speculation to suggest the future development will see new markets, new industries, and new sources of innovation.

This expanding operating domain will also benefit from rapidly declining costs. Some have claimed the cost of delivering a satellite could fall to only $5 million per launch. According to Morgan Stanley Equity Analyst Adam Jonas , “Just as further innovation in elevator construction was required before today's skyscrapers could dot the skyline, so too will opportunities in space mature because of access and falling launch costs.”

The space sector is currently undergoing a paradigm shift as recent innovations are creating new products and opportunities, such as small space satellites, the promise of broadband for all, and even space tourism that were the stuff of science fiction just a few years ago. As space transitions to a multi-use domain there will be just as many important regulatory as engineering challenges to solve. The U.S. Chamber will be at the forefront of these discussions, just as American businesses have been at the forefront of technological innovation.