The Economic Benefits of Space Exploration: Why We Should Invest More in Space
March has been a busy month for space news. NASA rolled out its first Moon-bound rocket since 1972 to a launch pad at the Kennedy Space Center in Florida in preparation for its Artemis I mission. The rocket, called the Space Launch System, is set to launch no earlier than June. The Artemis program, the successor to the Apollo program, aims to establish the first long-term human presence on the Moon and provide a foundation for future human missions to Mars (Artemis Plan: NASA’s Lunar Exploration Program Overview, 2020). Elsewhere, Axiom Space passed its flight readiness review, allowing the commercial spaceflight company to proceed with the world’s first all-private mission to the International Space Station (ISS). The mission’s crew of four will fly aboard a SpaceX rocket and capsule in April to conduct science on the orbiting station. In astronomy, the James Webb Space Telescope (JWST), the prominent instrument which will be able to view the universe’s first galaxies and search for signs of extraterrestrial life, reached a major milestone by taking its first focused image of a test star 2,000 light-years away. After years of minimal progress in space following the end of the Space Race and the Challenger and Columbia Space Shuttle disasters, there is now a growing interest and investment in space exploration and, with the increased role of the private sector, this trend is unlikely to wane.
Space exploration may be the last topic on many people’s minds given the state of the world, from Russia’s invasion of Ukraine to record inequality to climate change. Some argue that we should tackle our most pressing issues on Earth before investing in trips to the Moon and Mars. This argument, however, presents a false choice. Society can simultaneously spend resources on its problems at home while investing significantly in space activities if it cuts back on unproductive spending, such as fossil fuel subsidies and inefficient military spending. Furthermore, spending on space does not neglect or attempt to run away from humanity’s issues. It achieves the opposite through deriving technological and economic benefits that better equip society to tackle problems. While there is validity in seeing the vanity of space tourism for extremely wealthy individuals, such as the brief stunts by Blue Origin’s Jeff Bezos and Virgin Galactic’s Richard Branson, the vast majority of investments in space exploration yield important benefits for humankind.
It is fairly well known that space exploration has resulted in significant innovations, contributing to the creation of GPS, solar panels, implantable heart monitors, cancer therapy, water-purification systems, improved computing, and more (Benefits Stemming from Space Exploration, 2013, p. 1). Since 1976, NASA has recorded over 2,000 spinoff technologies as a result of its research, including a ventilator for COVID-19 patients which was developed in just 37 days (Inclán et al., 2020). These innovations not only contribute to the economy through increased productivity, but also save lives and increase living standards. Another way in which investing in space activities has led to higher productivity is through a more technically educated labor force. Investment in the Apollo program during the 1960s directly correlated with higher levels of earned PhDs in physical sciences, engineering, and mathematical science (Benefits Stemming from Space Exploration, 2013, p. 9). Increased space capabilities better equip humanity for problems at home. For example, an improved ability to observe Earth helps minimize the damage of events causing economic loss, such as natural disasters, which are becoming increasingly relevant due to climate change. Humanity would be better prepared to handle space-derived emergencies as well, such as a species-threatening collision with an asteroid or a solar storm heavily disrupting technology. Space exploration encourages greater international cooperation, strengthening the global economy. Prime examples are the ISS and the JWST, the latter being the result of a partnership between NASA, the European Space Agency, and the Canadian Space Agency. By building a better understanding of space, people in these divisive times could come together to be inspired by both the wonder and harshness of space and to appreciate the importance of preserving life on Earth.
The economic benefits of public investment in space exploration have been well documented. For instance, NASA released its first economic impact report in 2020, which found that the agency generated “more than $64.3 billion in total economic output during fiscal year 2019, supported more than 312,000 jobs nationwide, and generated an estimated $7 billion in federal, state, and local taxes throughout the United States” (Inclán et al., 2020). All fifty states economically benefit through NASA activities, with forty-three states enjoying a positive impact of over $10 million, of which eight states realize an impact of over $1 billion. The study found that the agency’s Moon to Mars initiative, which includes the Artemis program, produced over 69,000 jobs nationwide, over $14 billion in economic output, and $1.5 billion in tax revenue, accounting for nearly a quarter of NASA’s economic impact. These figures are expected to increase in subsequent years.
NASA has managed to produce these economic benefits despite having a miniscule allocation in the federal budget. Fiscal year 2019 saw the agency receive $21.5 billion from Congress, which was just 0.47 percent of the federal budget (NASA’S FY2019 Budget Request, 2019, p. 2). For comparison, The Department of Defense received $686 billion in the same year, which was roughly 13 percent of the federal budget (FY 2019 Defense Budget, n.d.; Amadeo, n.d.). This situation is a stark contrast to 1966 when NASA received over 4 percent of the federal budget, the highest portion it has received to date (SP-4012 NASA Historical Data Book: Volume IV NASA Resources 1969-1978, n.d.; “Budget of NASA,” 2022).
Figure 1. NASA Budget as a Percentage of Federal Budget (Source: “Budget of NASA,” 2022).
This significant decline in space spending represents an inefficient allocation of resources given the extensive returns of public investment in space exploration. Many estimates for this return on investment range from $2 to over $8 for every dollar spent (Stakkestad, 2016; Amadeo, n.d.). Policymakers should internalize this return and increase funding for NASA and other space activities. While the US does spend the most on space as a share of GDP compared to other countries and despite the fact that NASA funding has slightly increased in recent years, the US and the world at large could still be spending more given the public benefits (Measuring the Economic Impact of the Space Sector: Key Indicators and Options to Improve Data, 2020, p. 4).
With low public spending, the private sector has stepped up its investments in space exploration. Private funding in space related companies surpassed $10 billion in 2021, representing a record high and a roughly tenfold increase over the previous decade (Brukardt et al., 2022). The private sector’s increasing involvement adds important value to the public gains from space exploration. Public-private partnerships and private innovation, as seen with SpaceX’s reusable rockets, are crucial for making space travel less costly and more accessible. These goals can be achieved through a faster timeline because firms are better able to take on greater risk than government space agencies (Weinzierl & Sarang, 2021). NASA demonstrated the private sector’s importance through its designation of SpaceX’s Starship to be the first Moon lander for the Artemis program, taking astronauts between lunar orbit and the lunar surface. However, companies in this industry are heavily reliant on public entities like NASA through partnerships, subsidies, and contracts, which underscores the need to increase public investment in space exploration. Moreover, when the government invests, the resulting scientific and technological progress can be shared as a public good. By contrast, the private sector is incentivized to keep information proprietary. The good news is that the Biden administration has requested an 8 percent increase in NASA’s budget for 2023, most of which will go towards the Artemis program, but it remains to be seen how much Congress will actually allocate (Strickland, 2022). What is clear is that humanity will reap the rewards of more investment in space exploration through spurring innovation, strengthening economies, and taking the first steps towards being a multiplanetary species.
Edited by Lola Cleaveland
Works Cited
Amadeo, K. (n.d.). NASA Budget, Current Funding, History, and Economic Impact. The Balance. Retrieved March 29, 2022, from https://www.thebalance.com/nasa-budget-current-funding-and-history-3306321
Amos, J. (2022, March 16). James Webb: “Fully focused” telescope beats expectations. BBC News. https://www.bbc.com/news/science-environment-60771210
Artemis Plan: NASA’s Lunar Exploration Program Overview (p. 74). (2020). National Aeronautics and Space Administration. https://www.nasa.gov/sites/default/files/atoms/files/artemis_plan-20200921.pdf
Astronomy Picture of the Day. (2022, March 19). NASA. https://apod.nasa.gov/apod/ap220319.html
Benefits Stemming from Space Exploration (p. 26). (2013). International Space Exploration Coordination Group. https://www.nasa.gov/sites/default/files/files/Benefits-Stemming-from-Space-Exploration-2013-TAGGED.pdf
Brukardt, R., Klempner, J., & Stokes, B. (2022, January 27). Space: Investment shifts from GEO to LEO and now beyond. McKinsey & Company. https://www.mckinsey.com/industries/aerospace-and-defense/our-insights/space-investment-shifts-from-geo-to-leo-and-now-beyond
Budget of NASA. (2022). In Wikipedia. https://en.wikipedia.org/w/index.php?title=Budget_of_NASA&oldid=1079068475
FY 2019 Defense Budget. (n.d.). U.S. Department of Defense. Retrieved March 29, 2022, from https://dod.defense.gov/News/SpecialReports/Budget2019.aspx
Inclán, B., Rydin, M., & Northon, K. (2020, September 24). NASA Report Details How Agency Significantly Benefits US Economy [Text]. NASA. http://www.nasa.gov/press-release/nasa-report-details-how-agency-significantly-benefits-us-economy
Measuring the Economic Impact of the Space Sector: Key Indicators and Options to Improve Data (p. 10). (2020). OECD. https://www.oecd.org/sti/inno/space-forum/measuring-economic-impact-space-sector.pdf
NASA: Artemis. (n.d.). NASA. Retrieved March 27, 2022, from https://www.nasa.gov/specials/artemis/index.html
NASA’S FY2019 Budget Request (p. 25). (2019). Space and Technology Policy Group. https://spacepolicyonline.com/wp-content/uploads/2018/02/FY2019-nasa-budget-fact-sheet-Feb-25.pdf
SP-4012 NASA Historical Data Book: Volume IV NASA Resources 1969-1978. (n.d.). NASA. Retrieved March 29, 2022, from https://history.nasa.gov/SP-4012/vol4/ch1.htm
Stakkestad, K. (2016, January 7). What space exploration means for the growth of our economy. Phoenix Business Journal. https://www.bizjournals.com/phoenix/blog/techflash/2016/01/what-space-exploration-means-for-the-growth-of-our.html
Strickland, A. (2022, March 29). Biden’s $26 billion proposal for NASA paves path for 1st human exploration on Mars. CNN. https://www.cnn.com/2022/03/28/politics/nasa-2023-biden-budget-scn/index.html
Weinzierl, M., & Sarang, M. (2021, February 12). The Commercial Space Age Is Here. Harvard Business Review. https://hbr.org/2021/02/the-commercial-space-age-is-here
Witt, M., & Rowe, J. (2021, April 16). As Artemis Moves Forward, NASA Picks SpaceX to Land Next Americans on Moon [Text]. NASA. http://www.nasa.gov/press-release/as-artemis-moves-forward-nasa-picks-spacex-to-land-next-americans-on-moon
