In May 2020, the company SpaceX became the first private company to carry astronauts to the International Space Station, in what was also the first manned orbital flight launched from the United States since the retirement of the space shuttles in 2011. This was possibly the biggest milestone so far achieved by the engineer and technology magnate Elon Musk, founder of SpaceX and one of the most visible heads of the phenomenon known as NewSpace.
Musk is not alone in this endeavour. Alongside him are Amazon founder Jeff Bezos, with his company Blue Origin, and Sir Richard Branson with Virgin Galactic, along with many other companies that have not attracted as much media and public attention, but which are also actively involved in the aspirations of this burgeoning private sector. However, not all of these companies share the same vision: while some focus on offering exclusive experiences to affluent customers, others are intent on pursuing goals beyond Earth, from building hotels in space to reconquering the Moon and colonising Mars.
The involvement of private companies in aerospace is nothing new: the space race of the 1950s and 1960s would not have existed without the participation of numerous contractors. But NewSpace is different. Industry analyst Matthew Weinzierl, a professor at Harvard Business School, defined it as a group of startups poised to “disrupt the US space sector with new technologies, management approaches and competitive pressure.” However, Weinzierl admits to OpenMind that “NewSpace is a controversial term,” even within the industry itself. “The distinction is not really public versus private, or even young versus established,” he notes. “I would say the key differences are in mentality and business model.”
Space, the new target for startups
The re-named Old Space has traditionally been a highly centralised universe; the USA, with NASA in the centre, has forged long-term relationships with private companies. And although some industry observers have accused it of being slow, bureaucratic and hesitant, it is a model that has enjoyed great success, “a fact often overlooked by NewSpace enthusiasts,“ remarks Weinzierl. This new trend emerged when the US retired its manned space shuttles from service without yet having an alternative. “A group of entrepreneurs sensed an opportunity to try a new approach,“ says the economist.
This is where a different business culture comes into play, born in the spirit of Silicon Valley: startup companies convinced that new ideas and competition will drastically reduce costs in the achievement of lofty goals such as trips to the Moon or Mars. As Michael Smart, professor of hypersonic propulsion at the University of Queensland (Australia) and former NASA scientist, summarises for OpenMind: “They have a vision, and they have shown themselves able to take risks to fulfil that vision.“
Among these new ideas is that NASA need not be the main customer, but only one of several. In fact, a common feature of several NewSpace companies is the desire to make their businesses profitable by focusing their services on the individual customer. Virgin Galactic and Blue Origin will offer spaceflight to the public, and both have already broken new ground with their first manned test flights. On 11 July 2021, Branson and three other employees of his company, along with two pilots, successfully completed the first private suborbital flight with civilians on board, using the carrier mothership VMS Eve to launch the suborbital spaceplane VSS Unity. Branson’s journey exceeded the 50-mile (80-kilometre) altitude defined by NASA as the frontier of space. The British tycoon moved up his original launch date to beat his closest competitor, Jeff Bezos. The Amazon founder also completed his first suborbital flight on 20 July aboard the spacecraft RSS First Step powered by the New Shepard booster rocket NS4. Although Bezos arrived later than Branson, he surpassed him in altitude by crossing the Kármán line, the 100km mark that is widely accepted as the limit of space. Virgin Galactic plans to commence offering flights in 2022 at $250,000 per ticket, while Blue Origin has yet to specify a specific date.
But while Virgin Galactic focuses its operations on so-called space tourism, a name that some judge too pompous for what is merely a suborbital flight, Blue Origin shares much more ambitious goals with SpaceX. Both have a place on a list of companies contracted by NASA to develop technologies to enable new manned missions to the Moon and beyond. Musk’s company has been selected to carry the next astronauts to the Earth’s satellite as part of NASA’s new Artemis programme, prompting protests from Bezos. A trump card in SpaceX’s favour has been the development of its reusable Starship spacecraft, with which Musk also aims to reach Mars. Reusable spacecraft and propulsion technology, which lowers costs, has been one of the great achievements of the NewSpace companies.
NASA supports Old and NewSpace
These new developments have meant that the entry of private operators has not resulted in a new space race, this time between Old Space and NewSpace, but in collaborative contracts. According to Weinzierl, NASA initially reacted cautiously to NewSpace, but later adapted its regulatory framework to establish commercial ties with these new companies, provided that they bear some of the development costs and thus help to reduce the public bill for the space programme. On the other hand, the Old Space companies have also joined these new endeavours. The result, analysts say, should benefit all the parties and human activities in space.
However, despite their undoubted progress, NewSpace companies have also been characterised by their systematically broken promises. In 2017, SpaceX announced that the following year it would launch an orbital spacecraft to the Moon with two paying passengers. Musk also claimed in 2016 that he would found a colony on Mars in the 2020s, highly unlikely considering that the 2024 date for the first Artemis lunar mission is considered overly optimistic. Virgin Galactic and Blue Origin have also successively pushed back their target dates.
“Setting lofty goals is part of their mantra; it is investors who will decide if the hype is real,” says Smart. According to industry experts, it is difficult to know to what extent NewSpace will live up to its expectations, as these are private companies and some business models may not be viable. In March 2020, Bigelow Aerospace, founded by hotelier Robert Bigelow with the aim of building modular space stations, laid off its entire staff, allegedly because of the COVID-19 pandemic, but there is still no news of new plans. Nevertheless, Weinzierl is optimistic: “I’d like to be able to stay in a space hotel in my lifetime!”