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SpaceX success super-charges commercial space race

SpaceX success super-charges commercial space race

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First commercial cargo flight to the space station makes the venture capital community sit up and take notice: a new market beckons.

With the first successful commercial space flight to the International Space Station, conducted by Space Exploration Technologies (SpaceX), the commercial space race has become a reality. SpaceX's Dragon capsule made a successfully supply run to the ISS, followed by a re-entry to earth.

Now the stakes have been raised in the commercial space race. The success of SpaceX is already changing minds in Washington and creating more support for contracting out space missions to the private sector, as reported in Space.com.

Commercial space firms are already competing for the market in the payload-hauling -- a role formerly performed by the Space Shuttle, a new analysis in Knowledge@Wharton explains:

"In the near term, the role of private companies will be primarily that of "taxis in space," ferrying equipment and people. Wharton professor of operations and information management Christian Terwiesch says those jobs are ideally suited for commercial firms. "We are talking about reaching lower orbit, so the bar is lower in terms of the minimum efficient scale needed," he notes. "The technology has become a lot cheaper, and we have benefited from years and years of commercial aviation and previous experiences in space travel."

Thus, the private sector will be taking on the more routine tasks of managing transportation into low orbit to service the ISS and deliver satellites, while government agencies such as NASA will pursue scientific exploration into the rest of the solar system and beyond. The US federal government clearly intends to pursue private-sector solutions, and Terwiesch applauds the government's use of inducement prizes to drive new innovations. "The government should be open to letting multiple solutions to problems develop, because the government is not good at picking winners," he points out. "They are looking at this rationally and want to see more solutions."

Transporting humans into space is also becoming a big business. The reports cites the efforts of SpaceX, as well as Boeing, Blue Origins and Sierra Nevada, to develop transport systems into space. For taxis to the ISS, the most immediate challenge is beating the Russians -- but in a different way than the early days of the Cold War-era space race. "We know NASA pays about $63 million to the Russians to send someone to the ISS," John Roth, vice-president of business development at Sierra Nevada Corporation, is quoted as saying. "We have to show we can do it cheaper than that."

Other companies, such as Virgin Galactic, are on the verge of launching space tourists into sub-orbital flights. But these flights may open doors beyond simply propelling people 70 miles into weightlessness, according to George Whitesides, former chief of staff at NASA and now CEO of Virgin Galactic. Such capabilities may open the way to dramatically speed up travel around the globe, he says. "It is hard for us to imagine going around the planet in an hour, but it is completely possible," he notes. "That is a huge market if we can get the price down over time." Hypersonic, suborbital flights, skipping across the edge of the stratosphere, is seen as a faster, more frictionless way to traverse the globe.

The SpaceX success also is catching the eyes of venture capitalists, the Wharton report adds. "The success of SpaceX helps a great deal," says tech entrepreneur Esther Dyson. "I think the venture community is realizing -- just as they did with the Internet 20 years ago -- that this isn't a joke."

(Photo: SpaceX.)

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Joe McKendrick

Contributing Editor

Joe McKendrick is an independent analyst who tracks the impact of information technology on management and markets. He is a co-author of the SOA Manifesto and has written for Forbes, ZDNet and Database Trends & Applications. He holds a degree from Temple University. He is based in Pennsylvania. Follow him on Twitter. Disclosure