$1.8trn space economy offers global growth prospects – WEF, McKinsey

• Africa’s $23bn space value by 2026 ready to liftoff

• 15 nations spend $4.71bn on 58 satellites; 105 for         launch in 2026

• Top 10: South Africa, Nigeria, Egypt, Angola, Algeria, Ethiopia, Ghana, Kenya, Morocco, Libya

Ben Eguzozie

The Space economy is expanding, and is expected to be worth $1.8 trillion by 2035, up from $630 billion in 2023. This could create value for multiple industries and solve many of the world’s most pressing challenges, according to a report by the World Economic Forum (WEF) and McKinsey & Company, the global management consulting firm.

According to the report, the Space industry is approaching the next frontier, with each week bringing news of a major development somewhere in the world. Be it a test of a new rocket system, the launch of an innovative satellite, or a robotic exploration mission safely landing on the moon, activity in space is accelerating.

The $1.8 trillion Space economy figure, say WEF and McKinsey, includes both “backbone” applications — such as those for satellites, launchers, and services like broadcast television or GPS — and what is termed “reach” applications — those for which space technology helps companies across industries generate revenues. Uber, for example, relies on the combination of satellite signals and chips inside smartphones to connect drivers and riders and provide directions in every city.

In 2023, backbone applications made up $330 billion, or slightly greater than 50 percent of the global Space economy, while ‘reach’ applications represented $300 billion. The expected annual growth rate for backbone and reach applications is twice the projected rate of GDP growth over the next decade.  For comparison, the value estimates for space are similar to those for semiconductors (estimated at $600 billion in 2021 with 6 to 8 percent annual growth into the 2030s, and roughly half of the projection for the global payments industry estimated to reach $3.2 trillion in revenues by 2027.

Africa ready to liftoff

Africa’s space industry is also powering ahead. As of 2023, Africa’s space industry had 270 companies, with the continent’s space value expected to reach $23 billion by 2026. According to the 2023 annual report on Space in Africa, 15 African countries have invested over $4.71 billion in 58 satellite projects, and additional 105 satellites are to be launched by 2026.

Currently, innovators and inventors on the continent are actively investing in space activities with about $425 million allocated in 2023, an investment that has led to significant expansion in space assets and infrastructure, said the report.

Africa’s top 10 countries with big space projects are: South Africa, Nigeria, Egypt, Angola, Algeria, Ethiopia, Ghana, Kenya, Morocco, and Libya.

Space technology expert, Tidiane Ouattara, in a recent report on Space technologies in Africa for sustainable development, noted that as of 2019 approximately 8,500 people across the continent worked in the Space industry, 2,000 and 6,500 in the private and public sectors respectively through various national research programmes in the industry.

This exudes the industry’s massive potential to grow and contribute towards sustainable development, and manage line sectors such as land and meteorology.

The growth drivers for the Space economy include the need for greater connectivity via satellites, higher demand for positioning and navigation services on mobile phones, and increased demand for insights powered by AI and machine learning. These innovations are delivering greater benefits to a more diverse set of stakeholders than ever before, including companies in industries ranging from food and beverage to transportation. They may also help solve some of the world’s greatest challenges, such as climate change, the WEF and McKinsey report said.

The report shines a light on the important developments that will shape the Space industry, and the industries adjacent to it, through 2035.