Anyone who enjoys science fiction novels and movies has most likely fantasized about the possibility of space travel. While most people’s images of space travel have largely been inspired by franchises like “Star Trek” and “Star Wars,” companies like SpaceX and Arianspace are working to make commercial space travel a reality.
While space travel has always been a fascination for humanity, it was not until the space race in the 1960s that humankind began to make meaningful advances toward space exploration. At the time, the Soviet Union and the United Sates went head to head in the race to explore what was beyond Earth and ultimately put a man on the moon.
Although this race was inextricably linked to the Cold War and the ideological divide between capitalism and communism, this competition led to the advent of breakthrough technology and scientific discovery that first allowed space exploration to become a tangible reality. What is important to notice about the space race is that it was completely driven and subsidized by national governments. In other words, it was a matter of national pride, rather than monetary profit, that lead to Neil Armstrong’s giant leap for mankind.
In the 1960s, the American people closely followed the advancements that NASA made. Each Apollo mission launch was met with anticipation, and many people distinctly remember where they were and who they were with when they heard of the missions’ successes and failures. Today, however, the race to explore space has taken a very different form.
While the Soviet and American governments loudly paved the way to explore space, today, private companies are quietly making advancements to control the commercial “space market.” Much of the contemporary innovation and advancement of space travel have largely gone unnoticed by the public.
When space travel and exploration are examined from an industry perspective, two companies control roughly 90 percent of the market. In other words, SpaceX and Arianspace essentially have positioned themselves to have approximately the same level of influence in the industry that Standard Oil had in the 19th century. Much like the oil barons in America, SpaceX and Arianspace are currently positioned to monopolize the commercial space industry as it comes to maturity.
Although commercial space travel has not yet come to fruition, it is no less concerning to see such a large potential market dominated by two monopolistic players. Competition in any industry spurs innovation and lowers prices for consumers. Conversely, the absence of competition allows lesser products and services to enjoy higher prices. If space travel is accepted as an infant industry, having only two competing firms control 90 percent of the market is not in consumers’ best interests.
Space has long been dubbed the “final frontier” in terms of exploration, but it can also be viewed as the final economic frontier. Space travel truly represents an entirely untapped market that has virtually endless potential. Currently, however, this market is only being pursued by two companies. As science and technology allow commercial space travel to be a reality, the monopolistic structure of this industry will undoubtedly be called into question.
As humanity inches closer to achieving Hollywood’s illustrious depiction of space travel, the economic structure of this industry cannot be ignored. If commercial space travel is to be a reality, consumers ought to demand a more competitive market structure that will push innovation further, faster.
If not, space may remain an untapped frontier.
Bianca DiSanto is a senior in the McDonough School of Business. This is the final appearance of Think Tech.