Improving the Economics of Space Exploration
- Gregory Chassapis
- Dec 1, 2025
- 5 min read
Updated: Mar 31
In 1962, John F. Kennedy gave a speech at Rice University, one that would be made famous by his declaration that, "We choose to go to the Moon in this decade and do the other things, not because they are easy, but because they are hard."
Fast forward 7 years and we put a man on the moon.
Unfortunately, following that triumph, the United States largely abandoned space exploration. An almost decade’s long innovation effort and nothing more to show for it outside of flights to the international space station and the occasional Mars lander.
Yet, in that very same speech, President Kennedy set forth a broader vision that seems to have been rekindled:
“If this capsule history of our progress teaches us anything, it is that man and his quest for knowledge and progress is determined and cannot be deterred. The exploration of space will go ahead, whether we join in it or not. And it is one of the great adventures of all time. And no nation which expects to be the leader of other nations can expect to stay behind in this race for space. For the eyes of the world now look into space, to the moon, and to the planets beyond.”
And so, with that in mind, we turn our attention to the topic at hand: making space exploration cheaper and more accessible.
The Challenge: Making Space Launch More Affordable
For decades, the cost of launching payloads into space has been a major barrier to space exploration and commercialization. Indeed, when the Space Shuttle first launched, $1.5 billion worth of materials, fuel (and everything else required to successfully launch a rocket) went up with it. Industry experts (perhaps correctly) assumed that getting that cost down would be extremely difficult and a reusable rocket would be economically impossible.
Enter, SpaceX.
Founded in May 2002, the Elon Musk-led company set out to completely revolutionize the Space industry by dramatically altering its economics, and that meant wrestling it away from the government and its prime space contractors (Boeing & Lockheed Martin Space) that make up the United Launch Alliance. On the face of it, it doesn’t seem to make much sense to exclude storied companies who have formed the backbone of the American industrial complex and are responsible for technological innovations across various verticals that serve the government’s immediate and distant ends. But if we take a closer look, we can discern two things:
1) Space ceased to be a national priority once the United States beat the Soviet Union to the moon
2) Costs have remained elevated
The dangerous relationship between these two factors is that they both feed off of each other, and innovation (often the catalyst for improving economics) stagnated as we approached the new millennium. Critics of the “establishment” (i.e. the prime contractors) will also point to the obscene use of what are known as “cost-plus” contracts, which they say incentivize consumption and bureaucracy, rather than speed, efficiency and innovation- three characteristics that tend to lead to a declining cost curve.
To successfully make a rocket reusable and cost effective, you need to ensure you launch quickly and often, thereby bringing down the cost per launch. Easy to say, difficult to do.
Let’s start with launching quickly and often, otherwise known as “turnaround time.” According to research put out by Ark Investment Management, the average turnaround time of the Space Shuttle between 1972 and 2011 was approximately 252 days, with the fastest turnout time of 54 days achieved in 1985. By comparison, Space X achieved its quickest turnaround time in 2024 of only 14 days.
As it stands today, SpaceX’s medium-lift Falcon 9 rocket launches multiple proprietary and customer missions every month, and has achieved staggering cost of $857 per kg. Starship, the company’s super heavy-lift rocket, is targeting $100 per kg. The implications of that are notable, particularly when one considers the increased payload.
New Ideas: Innovations in Reusable Spaceflight
As is the case with new markets, there will be competition. Beyond SpaceX, several players are making strides in reusable rocket technology, and, according to data from NewSpace Index, funding is more available than ever for an ever-increasing diversity of craft:
Concepts such as fully reusable spaceplanes, air-breathing rocket engines, and rapid refurbishment techniques aim to push costs even lower and improve operational efficiency. Further innovations in autonomous landing systems and in-orbit refueling beyond what SpaceX has already achieved, could further extend the capabilities of reusable launch vehicles. These advancements would make deep space missions such as mineral extraction from nearby asteroids and lunar colonization more economically feasible.
As is the case with new industries and new technologies, however, not everyone who sets out to achieve in this area will end up doing so. Of the 194 firms created since 1996, roughly 20 are still operational, but if a firm does succeed, it will be able to partake in the $1.8T expected total addressable market by 2035, according to McKinsey.
What’s Holding Us Back and What’s Next
While the Space economy is certainly something to get excited about, its viability will ultimately be decided by its economics, which depend on elevated demand. Further moving down the cost curve with innovations in areas such as recovery and refurbishment processes is essential, and that’s before we begin to address technical challenges, such as heat-resistant materials and advanced propulsion systems. These are all areas that are increasingly well-funded, but are still under development and not yet heavily commercialized.
What is abundantly clear is that competition will drive innovation, but much like the 1960’s the sovereign will have a part to play. President Trump established the United States Space Force in 2019, matching similar initiatives from the Russians and the Chinese. Soon after, the English, the Indians, the Germans and the Australians launched similar initiatives.
If these innovations continue at their current pace, we may soon see a future where launching into space is as routine and affordable as commercial air travel. The question is no longer whether reusability is possible, but how far it can go in transforming humanity’s access to space.
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