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« What Might Have Been | Main | Hunting Bambi »

The "Space Industry"

Jeff Faust has an interesting piece on what is, and isn't the space industry:

When the space industry is defined in this manner, it becomes clear why it lacks influence in Washington: it?s very small. At just $37 billion in worldwide revenues in 2002, the space industry is smaller than many corporations. For example, US automaker General Motors records more revenue in a single quarter?an average of $47.5 billion per quarter in the last year?than the entire space industry made in all of 2002. Even if satellite service revenues are added into the space industry?s total, it still comes to less than half of GM?s total revenues for the year. In Washington, money talks, and the space industry is whispering. No amount of space industry organization consolidation can solve that problem.

There's another point to be made here. In fact, though it's small, it seems generally to get what it wants, by bribing powerful congresspeople with jobs in their districts. Unfortunately, for the most part, what it wants has little to do with space, and mostly to do with rent seeking from the taxpayer.

Consider one more point that Dr. Patrick Collins makes often. We have spent hundreds of billions of taxpayers' dollars on civil space over the past four decades. Yet we've only managed to create an industry valued in the tens of billions annually (and much of that is defense contracts). Is such poor leverage typical, or are we doing something wrong?

I think you know my opinion on that subject.

[Update at 1:35 PM PDT]

Another sign of the incredible shrinking space industry. Boeing is pulling Delta IV out of the commercial market, which has a glut of launchers. They're going to stick to government contracts.

Posted by Rand Simberg at July 15, 2003 11:08 AM
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Back in 1993 (near the beginning of the Goldin era) I was working at Goddard Space Flight Center. I, along with some others, knew budget cuts were coming.

At one of those awful meetings called by management, I brought this up and somewhat gently asked if management had any plans for dealing with this situation. I hoped they would say something about seeking new markets. After all, they did have a rather talented workforce.

The manager I queried replied that we would focus even more on our core business and win contracts that way. Such a total lack of not just imagination but even sound business sense...

I've heard that company lost a large part of their contracting work after I departed. One hopes some of those managers are now working at something more suited to their skills -- like burger flipping.

Posted by Chuck Divine at July 15, 2003 01:27 PM

Boeing pulling out of comercial launches?

The better to launch OSP/OSC?

Posted by Mike Puckett at July 15, 2003 04:15 PM

That link to Jeff Faust's post actually goes back to your blog, Rand...

Posted by Troy at July 15, 2003 09:45 PM

D'oh!!!!

Thanks Troy, it's fixed now.

The fact that it took so long for someone to point that out doesn't bode well for my readership level (or at least for their propensity to actually follow and read links...)

Posted by Rand Simberg at July 15, 2003 10:15 PM

Win some, lose some... I'll bet the "Hunting Bambi" link got checked out, though!

Posted by Troy at July 16, 2003 06:11 AM

Meanwhile, in another part of town:
"At least seven launches using Proton booster rocket to be made at Baikonur
before end of this year."
http://en.rian.ru/rian/index.cfm?prd_id=160&msg_id=3326207&startrow=11&date=
2003-07-16&do_alert=0

Posted by at July 16, 2003 10:46 AM


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