Industry Can't Pay for Space

In most media portrayals of NASA, rocket ships are built by government rocket scientists. Government astronauts build government space laboratories and government bases on other planets. Government crews on government starships explore distant galaxies.
In reality, private business is involved in virtually every piece of equipment and software of every NASA space mission. The space agency does the design and acts as a general contractor, soliciting bids, structuring, integrating, and guiding the mission. Private industry does much of the heavy lifting—literally. The fuel in booster rockets comes from private chemical companies. The rocket engines themselves are built by the likes of Pratt & Whitney, AeroJet Rocketdyne, Blue Origin, and Orbital, as well as the nations of Russia and Ukraine. Federal employees comprise just a fraction of the total NASA mission workforce.

So why have government involved in the first place? Two primary reasons: initial investment and risk. NASA opens frontiers deemed too risky for private investors and too distant in time for profitable operations. Take, for example, the new companies springing up to create space rockets. They are leveraging and innovating with decades worth of government developed technology. Plus, the government indemnifies these companies, providing a critical insurance policy against lawsuits in the event of failure.

Or consider the prospect of mining a nearby asteroid filled with platinum (a definite possibility). Several startups have worked up business plans to exploit the vast riches. But only NASA has the wherewithal and technical prowess, and can take on the risk, of technological development and exploration. In every aspect of space discovery and exploration, the government, through NASA, fronts the money necessary to prove a concept before it can be believably profitable, in much the way the National Institutes of Health sponsor research on diseases that eventually result in profitable drugs. Government is a catalyst for the creation of new markets and industry that most people cannot imagine at the time. Through government, society spreads the risk of failure through an entire nation rather than one company, with the confidence that the nation as a whole will profit.

What’s more, the intellectual property created by the space program is public property. Its public nature allows an unimaginably broad range of industries to tap into it. No one company or industry owns it. That’s why space docking software can be employed in docking with patients’ arteries. The intellectual space resource is a broad, richly diverse vein of ore. Creative minds will discover wildly different ways of using it. The most entrepreneurial among them will benefit directly. But so does the nation as a whole. If you ask serious economists, they will tell you that every region and a host of industries—from medical to energy to sports to household appliances—benefit directly from the intellectual discoveries of the space program.

Without a bold public space program, that resource will age and eventually become useless. Without the government spreading the risk throughout society, new discoveries will not arrive, less knowledge will get created, and new markets and industries will fail to emerge. Space attempts will become more modest. What once was a rich resource will become sparse. Intellectual property will lie in the domain of private companies guarded by fierce lawyers.

We’re already going down this path. The economy will plod along, no doubt. But it will be a more static, flat economy; much like other nations, those that are past their prime and receding in influence globally. America will be that much less rich, and there will be fewer entrepreneurs getting wealthy from one of the nation’s greatest resources.