Space: the next investment frontier?
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No. Yes. SAP Concur helps your business move forward faster. Learn more at Concur.com. Hello and welcome to Business Daily from the BBC World Service. I'm Ru Abbas and on today's program, I'll be exploring how business and investment are fueling groundbreaking innovations in space. If you want to build a rocket, that's on your very high end. If you're looking to develop your technology to fly it in space, to learn more about it,

That can be in the tens of 20s of millions of dollars. I'll be exploring the thrilling innovations driving the space industry forward. For example, when to do the irrigation, what kind of crop to use, how is the moisture of the soil, all these type of elements and innovations

and data and information are basically provided thanks to the Earth observation and satellite imagery and data. And I'll be finding out why private investors are so keen to get a piece of the space action. But what you're seeing with Elon Musk and others are the recognition of that benefit that comes in, the risk up front, but then the reward and the benefit that comes in the end. The business of space. That's all coming up on today's Business Daily.

Of course, to chart the future, we must first revisit the past. For centuries, space has ignited our curiosity and pushed the boundaries of human understanding. Neil Armstrong's immortal words marked the moment humanity first set foot on the moon.

But the giant leap he spoke of launched a multi-trillion dollar drive for power and commercial success.

With countries like the US, China, India and Russia vying for lunar resources, the growing lunar economy is reshaping geopolitics. And with commercial space revenues topping $445 billion in 2023, the future of space holds incredible potential for industries, international cooperation and progress.

Today, nearly 80 countries have space programs and the space economy is booming. Six, four, three, two, zero, and liftoff. To try and find out what sort of innovation we can expect going forward, I've come to the Italian city of Milan.

Ciao, Milano. We're so happy to be here. Excellencies, heads of space agencies, the space community, distinguished guests, good morning and welcome for what is going to be the largest gathering of space professionals in history. Come to attend the International Astronautical Congress. There are around 11,000 people here from 120 countries, and it's here that all of us are

Entrepreneurs and senior executives meet to strike deals and showcase their latest and greatest gadgets. And there are plenty of investors milling around. There's a lot of opportunities in the tech side. Without gravity, pharmaceuticals are learning wonderful things. On Space Station, they grew a meniscus last year.

Great application in the medical field. That's Sean Fuller, NASA's international partner manager for the agency's Gateway program. NASA is one of the flagship agencies renowned for pushing the boundaries of space exploration. The agency has been teaming up with private companies to create what is known as a sustainable low-Earth orbit economy.

expanding space access for research and commercial activities. We can produce fibers in space for telecommunication without gravity that are much, much better, much purer, provide better results. All that can be done in space with great benefits on Earth for a lot cheaper a lot of times because that capability is so much more. If I wanted to invest in space, how much money would I start with up front? That's a good question, and I would answer that with how big do you want to go?

Because there are different aspects to it. Like I said, if you want to build a rocket, that's on your very high end. If you're looking to develop your technology to fly it in space, to learn more about it, that can be in the tens of 20s of millions of dollars. Some of it is flown up under different grants and research projects, government-sponsored.

but we also see it on the private side as well. And as there's more of it, you see easier access to it and a cost of access to space going down. We've seen a tremendous decrease in a cost of access to space over the last 10 years because of that.

Since I spoke to Sean, the future of the Gateway program could be under threat. Under President Trump's administration, NASA's 2026 budget is facing major cuts, with proposals to cut funding by $6 billion. It's thought this could affect programs such as Earth observation and deep space research.

Meanwhile, many other countries are ramping up investment in exploration, research and related industries, hoping to tap into the growing potential of space-based technologies.

The space economy has two aspects, the upstream and the downstream sectors. Upstream involves the development, manufacturing and launch of space systems, including rockets like SpaceX's Falcon 9. While downstream focuses on services that use data and technology from the upstream sector. And this is where investors come in.

These services include telecommunications, the internet, weather forecasting, agriculture, environmental monitoring and GPS technology that drives services like ride-sharing apps. An exciting aspect of innovation in the downstream sector is pharmaceuticals. Research in microgravity is leading to higher purity and effectiveness, with scientists discovering that cancer cells behave differently in microgravity. A.

aiding in the prediction of mutations and improving treatments. In fact, scientists have already found insights and breakthroughs in drug development, particularly for diseases like HIV, opening the doors to cheaper and more effective medication.

One such downstream company is the South Korean pharmaceutical firm Boirong. We are kind of known for making investment in Axiom Space, which is trying to build its first commercial space station. Jae Kim is the company's CEO and chairman. He told me why his company entered the space industry.

the space domain. I personally believe that there's no non-space businesses, I mean fundamentally. We began our humans in space program three years ago and the main objective for that program is to enable humans to live in different places.

in space. That includes Earth. And we partner with NASA Human Resource Program, ESA, DLR, which is the German space agency. And we also have a large group of universities around the world who are tackling the human health risks in space and Earth. He also shared insights about experiments involving the human eye in microgravity at the International Space Station.

There's almost no gravity in that environment, which affects how the blood flows in your body. And the problem with your eyes is kind of one of the results out from that because the blood doesn't really flow into your eyes, it swallows.

So there's problems like that. And companies and researchers who are trying to solve those problems come through our challenge and gain the networks through us to space agencies like NASA, ESA, JAXA, CASA.

and universities and investors. What sort of money are we talking about? Is it more a case of a few thousand, a few million? How much are we talking? So we provide around $50,000 of equity when it comes to the equity investment part. And we also offer Orbital Launch Fund, which provides the companies and researchers with opportunity to send their research up to ISS

That will cost about $250. And depending on the process of each project we're making, we can also make a link to the venture capitals. The size of the investment could go up to millions. You're listening to Business Daily from the BBC World Service.

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These are my future expenses? Yes, and self-defense classes are out of policy. I'll need self-defense classes? You will. For what? It's a big dog. SAP Concur helps your business move forward faster. Learn more at Concur.com. I'm Roo Abbas, and today I'm looking at the money being invested into space exploration and research.

Scientists and governments are using orbiting Earth observation satellites as a tool in the fight against climate change, largely due to the data they provide.

Not only is the data freely available, but it also has the potential to be monetized for further research and innovation. And financial institutions are paying attention. Fanny Caliano de Jong is from the European Bank for Reconstruction and Development, the EBRD. We're trying to make sure all the companies, all the businesses, all the projects we invest in are sustainable and are aligned to the Paris Agreement objectives.

So it's very much part of our DNA, I would say. So basically we invest in the private sector mainly, in our countries of operation. And now we're going sub-Saharan Africa, which also would bring a different element, which is connectivity, connectivity to remote areas. Along with identifying areas vulnerable to climate change, satellite imagery is also transforming industries like insurance in predicting and valuing properties.

In India, a company called Satchel is using space images to help farmers secure loans. By giving accurate data on crop health and land use, it's making it easier for farmers to get financial support, boosting growth and resilience in rural communities. Fanny Caliano de Jong told me how her bank was involved. The EBRD is very much focusing on agriculture.

amongst other industries, but I would say, for example, the use of precision farming, which is again, imagery from space and using satellite data to inform the farmers, for example,

When to do the irrigation, what kind of crop to use, how is the moisture of the soil. All these type of elements and data and information are basically provided thanks to the Earth observation and satellite imagery and data. Meanwhile, other companies have already set their sights beyond Earth.

The International Space Station is due to be dismantled by 2030, mainly due to its ageing infrastructure and the extortionate costs of maintaining and operating it.

So what's next to take its place? Well, VAST describes itself as a pioneering space habitation technology company, which has already announced a partnership with Elon Musk's company SpaceX. It is building Haven 1, which is expected to become the world's first commercial space station. Its CEO, Max Hayot, told me they believe that in the future, there should be more people living in space than on Earth.

To make that happen, somebody needs to create an artificial gravity space station, which by spinning can simulate the gravity on Earth. And that will allow people to stay in space long term. Right now, if you go to space in a normal space station, you will basically have...

bone loss and muscle loss and other ailments that means even professional astronaut cannot last much longer than a year and even after that they come back on earth and they need a long rehabilitation so that's our long-term vision it will take a few decades and we also need stepping stones to get there so as a also a very realistic business oriented commercial company

Our first stepping stone is to build the world's first commercial space station, HAVEN-1. And so our number one target customers are actually government professional astronauts that work for sovereign governments and that are going there to do important science, outreach, manufacturing and research. So HAVEN-1 and HAVEN-2 are future stations of microgravity laboratory in space aimed at international government.

Of course, we will also have, we expect, some self-funded private individual. And again, as with everything in the space industry, it doesn't come cheap.

In terms of the price, it's still a very expensive endeavor that a government can afford, obviously a very wealthy individual. The biggest part of the cost is actually the transportation, the going to orbit with SpaceX. We can't disclose a specific price, but we are really looking forward to the work that SpaceX is doing with Starship, to when Starship will be able, the new SpaceX rocket, to be able to take space.

I think they expect up to 100 crew in one capsule. Right now we can only put four people. When they do that with the rapid reusability, we really expect to see a dramatic reduction in the cost of transportation. And obviously by then the destinations, which is what we do, the space station, will also have become more and more affordable.

Investment, of course, is easier to come by when you're working with SpaceX and the world's richest man, Elon Musk. Musk has single-handedly revolutionized space exploration, advancing reusable rocket technology, and championing interplanetary colonization as a long-term solution for humanity's survival. So I asked Sean Fuller from NASA, how has Elon Musk invested in space exploration?

influenced investors? Yeah, that's a great question. And it really varies over time. But what you're seeing with Elon Musk and others are the recognition of that benefit that comes in, the risk up front, but then the reward and the benefit that comes in the end. Space projects, they range depending on complexity and magnitude of it from a couple of years to decades to get it to fully developed and operational to get that return. But what we're really seeing is from the private market,

that interest in investing in it, taking that risk because that benefit is recognized. If I go look at it in 2023, the global space economy was $570 billion worth. 78% of that came private outside of government. I think that really reflects that growth. And that's a 20% growth from the previous year. So we're seeing that. We're seeing a lot of opportunity, commercial space stations in the future. When I look at the moon, it is a broad landscape of possibilities out there.

We've had several public-private partnerships with NASA. I see a lot of that growing, as well as public alone opportunities in space. Many of the world's space agencies are actively investing in exploration, research and related industries, hoping to benefit from the potential of space technology. Low- and middle-income economies are also increasing their investments, with African nations collectively making significant progress over the past year.

While the U.S. is the largest investor in space, China is quickly closing the gap, ranking second. By investing heavily in satellites and infrastructure, China is gaining allies and expanding its influence in space, especially as the U.S. reduces its support for lower-income countries.

Here's Fanny Caliano de Jong from the European Bank for Reconstruction and Development. The link between what we think is not space and space actually is very much getting narrower and narrower. And I think this is very much in the interest of many companies. So if they want to remain competitive or if they want to build something that is sustainable and innovative, they would need to look at space, what space can do for their business.

The space sector is making a huge mark on the global economy, driven by thousands of active satellites tackling major challenges, everything from transition to a low-carbon economy to digitising industries, combating food insecurity and advancing future transportation solutions.

With both governments and private sectors ramping up investment, space technology is not only enabling exploration, but also delivering tangible benefits for humanity's most urgent needs. But as President Trump proposes deep cuts to NASA's science budget, questions are growing over the future of US leadership in space, just as other nations are racing to stake their claim in the new geopolitical frontier.

That's all from this episode of Business Daily, produced and presented by me, Roo Abbas. Thanks for listening. And to hear more programmes, just search for Business Daily wherever you get your BBC podcasts.