U.S. foreign policy is being built around a fundamental assumption that the...
2020-08-10 1 ENGLISH REPORTS
The US may forfeit its leadership in commercial space. The new space economy is a product of US ingenuity and entrepreneurship. Since 2009, the US has led the commercialization of geospatial imaging via small satellites using advanced analytics to derive information from satellite data autonomously, and reusable rockets that have significantly reduced the cost of placing mass in orbit. More than 500 companies fueled by nearly $26 billion define today’s new global space economy. At the outset of the COVID-19 crisis, the US controlled 55% of this market with $14 billion of private investment over the past decade. Should the commercial space sector collapse domestically, it will likely be supplanted by foreign entities who benefit from more direct government subsidies and foreign national strategies such as China’s civil-military fusion. The cost required to stabilize the US commercial space industry now may be significantly less than the cost of replacing it.
US investors will respond favorably to a ‘strong signal’ conveyed by focused DoD procurements of commercial space products and services. Despite the economic downturn, there is still capital available and new investment deals underway. According to PitchBook, sixty-six venture capital deals were recorded in China for the week ending 28 March 2020, the most of any week this year and nearly the same number recorded at this time last year. PitchBook also reported that venture 79 capitalists held $188.7 billion globally equating to 2.5 years of capital on hand as of mid-2019. Investors are looking to reduce risk and increase protection of their assets during the post-COVID-19 recovery. DIU has spent five years developing trusted relationships with venture capital and private equity investors located in Silicon Valley and elsewhere. Over much of this time, one sentiment has remained steadfast: it is better to issue fewer but more meaningful contracts in order to elicit a response from quality US investors.
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