The global space economy is projected to nearly triple to $1.8 trillion by 2035, transforming from a niche sector into a backbone of global commerce, security, and climate resilience and reshaping industries from supply chains to defense. This growth is not just technical — it is financial, as capital strategies evolve and private investors accelerate innovation.

Why This Matters

Two insightful reports from McKinsey & Company highlight the following vital implications for the near-term future of space going into 2035:

• Strategic Inflection Point: Like the internet in the 1990s, space is moving from niche to ubiquitous.
• Economic Scale: Space’s $1.8T trajectory outpaces global GDP growth, underpinned by communications, positioning/navigation/timing (PNT), and Earth observation.
• Capital Innovation: The financing models that drove startups in AI and biotech are now transforming space. Venture capital, SPACs, spin-offs, and partnerships are fueling rapid entry and growth.
• Geopolitical Stakes: Space is simultaneously a growth market and a contested domain, with defense, sovereignty, and national strategies shaping outcomes.

Key Points

• Massive Growth Potential:
  • Space economy: $630B (2023) → $1.8T (2035).
  • Upside scenario: $2.3T with lower costs and wider data access; downside: $1.4T if terrestrial alternatives dominate.
• Industry Impact:
  • Five sectors (supply chain, food & beverage, defense, retail/lifestyle, digital communications) will capture >60% of space-enabled revenue growth.
  • Reach applications (apps & services using space data) will outpace backbone (hardware & infrastructure).
• Investment Trends:
  • VC in space soared from $300M (2012) to $10B+ (2021).
  • High-profile raises: SpaceX ($1.5B for Starlink), Relativity ($650M for 3D-printed rockets), Astranis ($250M for GEO satellites).
  • SPACs brought Planet, Spire, and Momentus public, though the market has cooled.
• Capital Strategies:
  • VC & Private Equity: Target large TAMs, unique IP, fast commercialization.
  • Spin-offs: Virgin Orbit, Sierra Space — agile, backed by parent resources.
  • Partnerships: Boeing & AE Industrial’s HorizonX VC fund; U.S. Space Force + Embedded Ventures.
  • Internal R&D: Northrop’s SpaceLogistics, Raytheon’s smallsat expansion.
• Strategic Returns Beyond Finance:
  • Disaster mitigation, climate monitoring, and humanitarian response.
  • Space-based broadband bridging digital divides.
  • Security, intelligence, and defense integration.

For the full reports see:

World Economic Forum & McKinsey: Space: The $1.8 Trillion Opportunity for Global Economic Growth
Projects the space economy will nearly triple by 2035, with reach applications outpacing backbone hardware, and emphasizes collaboration, innovation, and sustainability to maximize societal benefits.

McKinsey: A Different Space Race: Raising Capital and Accelerating Growth
Analyzes how venture capital, spin-offs, partnerships, SPACs, and corporate R&D have fueled rapid innovation in the space sector, and argues companies must adopt a disruptor’s mindset to compete.

What Next?

• Space Data Becomes Mainstream: Ubiquitous, user-friendly datasets integrated into AI tools will drive adoption across non-space industries.
• Capital Selectivity: With rising interest rates and investor caution, space ventures must prove faster traction, strong IP, and scalable markets.
• Risk Landscape: Orbital debris, geopolitical escalation, and regulatory fragmentation could constrain growth if not addressed.
• Beyond 2035: Space-based solar power, in-orbit manufacturing, and cis-lunar operations may push the economy beyond $3T.

Recommendations from the Reports

For Non-Space Industry Leaders:

• Integrate space data into core operations (supply chains, climate risk, logistics).
• Partner with space players to extend reach into underserved regions.

For Space Industry Leaders:

• Build “space-for-non-space” products with clear ROI.
• Standardize data and hardware protocols for interoperability.
• Co-invest with non-space corporates to scale adoption.

For Policymakers:

• Advance global space traffic management and orbital debris frameworks.
• Co-fund space capabilities with high civilian utility (e.g., disaster early warning, climate monitoring).
• Create capital incentives to attract private investment into high-risk, long-horizon projects.