The universe isn’t the only thing expanding. Governments have invested in space technology for decades, and now business is accelerating its growth. On this episode of The McKinsey Podcast, McKinsey senior partner Ryan Brukardt speaks with global editorial director Lucia Rahilly about the global space economy, where innovation in space-based technology is generating a range of public- and private-sector opportunities that could reach $1.8 trillion by 20351—as well as the imperative to shape space responsibly.
In our second segment, author Moshik Temkin talks about his book Warriors, Rebels, and Saints: The Art of Leadership from Machiavelli to Malcolm X (PublicAffairs/Hachette Book Group, November 2023) and what history can tell us about the types of leaders we need today. This comes from our Author Talks series.
This transcript has been edited for clarity and length.
The McKinsey Podcast is cohosted by Roberta Fusaro and Lucia Rahilly.
The allure of space
Lucia Rahilly: Tell us about your background and the origins of your passion for space as a profession.
Ryan Brukardt: This might be a bit corny, but as a child, I would look up at space and see the stars. And I just got caught up in that. That’s where I started. I grew up in the ’80s with a space shuttle launching periodically here in the US, seeing those astronauts. I went to a space camp. I got a degree in physics and went into the Air Force. Space has always been a passion for me. And it’s great to be part of the thinking behind what’s going to happen in the industry and how it’s going to affect every person on Earth.
Lucia Rahilly: What has happened in recent years to make space more accessible than in the past?
Ryan Brukardt: Most people probably don’t realize just how much their daily lives interact with space. Every day, people get in cars assisted with navigation by GPS. Every day, people order food online, assisted by both communications and navigation provided by space assets. The presence of space in our lives is probably more ubiquitous than people think.
However, what really has happened in the last several years is access to space, the ability to get to space—the cost of that has come down dramatically. As you might imagine, when you’re trying to put assets into orbit, it can be very expensive. Through a variety of technological advancements, as well as entrepreneurship and private investment in particular, we’ve seen those costs come down.
Lucia Rahilly: We’re talking about more than space tourism here, correct?
Ryan Brukardt: That’s right. Most of the capabilities we have from space are provided by satellites and other unmanned platforms here in Earth’s orbit. Space tourism is part of the space economy, and people go to space for a variety of reasons—not just for scientific purposes but also for fun. That will increase. However, it is a smaller part of the economy today.
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Spaceonomics
Lucia Rahilly: Let’s turn to the research, starting with the definition of what we’re calling the space economy. What does that mean exactly?
Ryan Brukardt: In the past, it has been a bit nebulous. Trying to define what the space economy means was why we set out to do this report to begin with. The way we think about it, there are two large halves. One-half is what we call “the backbone”: launch vehicles, rockets, and satellites and all the ground equipment that makes those things work. The other half is what we call “the reach”: the applications that use that backbone to provide goods and services to people on Earth.
Lucia Rahilly: Before we get into the specifics on applications, talk to us a bit about the capabilities that industries will be able to develop via investment in space.
Ryan Brukardt: We think about them in three buckets. The first is connectivity. We have the ability to communicate with basically anywhere in the world using satellite communications technology. We can now do that with what’s called high bandwidth and low latency. That means we can send a lot of data very quickly. And the types of use cases that allows for are things like video conferencing, et cetera.
The second bucket is mobility: understanding where you are on Earth. We already do that with cell phones, but increasingly, we’ll do that with even smaller devices to know where anything is in the world.
The third bucket is deriving data that only space-based applications can provide. You will see this in Google Maps—electro-optical imagery or imagery that allows you to see what’s happening on Earth. It used to be that a company or a government would take a picture of Earth once a day or once a week, but now it’s able to take that picture very often.
So you’re able to use not only visual data but also other types of data on what we call a high return aspect to see what changes. Think about crops, for example, and understanding how much water there is to feed those crops, what you may need to do about that, and what actions you may want to take.
Tracking mobility—for better and worse
Lucia Rahilly: Let’s pick up the mobility example. Is this improved, more accurate positioning data—or is it something fundamentally different from GPS? And what will we use it for?
Ryan Brukardt: First, this data has gotten much more accurate, which allows certain use cases to emerge. Second, the ability to detect those signals used to require big antennas and receivers. Now, you can do it with your cell phone. But pretty soon you’ll be able to do it with even a very, very small low-power sticker that you could put on an asset.
For example, now you can get in your car and take out your phone, and it will help you navigate to where you want to go. But in the future, we’ll be able to track containers on ships to understand where they are, understand when they’ll arrive somewhere else, and be very discreet in tracking them. Both the proliferation of old use cases to new geographies, as well as the appearance of use cases that didn’t exist before, are going to propel growth.
Lucia Rahilly: I live in New York City. We’ve got a constant dinner table discussion about wearables and tracking, because my kids, terrifyingly, are beginning to be at large. The research talks about personal-tracking services through wearables. What are the applications here? Is privacy a quaint anachronism in this satellite era?
Ryan Brukardt: The regulatory environment for space is still maturing. There is an idea that we need the appropriate amount of regulation to be able to manage things like privacy. What’s the air traffic control “system” for that? We talk about ways of responsibly managing bandwidth, to enable communications, whether through satellite or otherwise. This whole idea of privacy needs to come through an effective regulatory environment. That’s still catching up. The rate of technological innovation, in some ways, has outpaced that.
This whole idea of privacy needs to come through an effective regulatory environment. That’s still catching up. The rate of technological innovation, in some ways, has outpaced that.
Lucia Rahilly: Talk to us about disaster warnings and management. What role does space-based technology play? And what’s the business opportunity here?
Ryan Brukardt: There are a couple aspects to disaster response. One is being able to give response agencies and governments real-time information about what’s happening in a very clear and concise way. The second is communications. For emergency responders and governments, the ability to effectively communicate is extremely important, and communications often go down during disasters.
Also, what information can we derive from Earth? We talked, for example, about mobile signals to understand where people are. People keep their cell phones on in an emergency. There are commercial technologies out there that can detect those mobile signals, so the government can understand where people may be in trouble.
What happens to satellites—and trash?
Lucia Rahilly: Another opportunity the research highlights is in-orbit servicing. Is the expectation that existing satellites can be upgraded and repaired or that they are replaced? And in the latter case, what happens to legacy equipment? Does it come down? Or is it up in space interminably?
Ryan Brukardt: There is tension right now in the industry between upgrading and repairing satellites on orbit and putting up new satellites to replace the old ones. There are advantages and disadvantages to both, and there’s a role for both. Going back to the regulatory question, it’s getting crowded up there, and there’s a real concern about these satellites running into each other. How do we manage that?
Lucia Rahilly: Related, whose responsibility is it to pick up the garbage accumulating in space?
Ryan Brukardt: That is a hotly debated topic. Many satellites in what we call low Earth orbit or lower orbits are a little bit self-cleaning. So they’ll degrade in orbit; they’ll burn up in our atmosphere. And then they’re just gone. There are satellites far away from Earth for which, to your question on in-orbit servicing, it makes sense in some cases to repair, upgrade, and put more fuel into them.
When you ask who’s responsible, large Western governments and other governments are struggling with that question right now. What requirements do we put on people who build and launch satellites, to ensure space is free and open for the future? And what does that mean? What cost comes with that? What are the regulatory requirements?
Global spacefaring
Lucia Rahilly: You talk in the research about backbone investments that include satellites, launchers, and services like broadcast television or GPS. Do you see investment continuing to be largely state sponsored? Or is there an obvious commercial opportunity in that area?
Ryan Brukardt: Over the last ten years, we’ve gone from launching a few times a year globally to launching every other day or so with all the spacefaring countries we have now. This is a phenomenal change due to several factors.
One is technology and technological improvements in the launch itself. Another is reusability. Some is the commercial scale and scope of certain technologies. And the other is private investment. This has been a huge difference in the last several years. Governments will always be very important and for many space companies, their anchor customer; however, private capital coming in and starting to explore more commercial use cases is a big change.
How space affects life on Earth
Lucia Rahilly: A criticism we sometimes hear about investment in space, or at least certain segments of the space economy, is that there is a genuinely urgent need to address challenges right here on Earth. Talk to us about ways space might help advance progress toward sustainability goals.
Ryan Brukardt: When it comes to, “How can we affect life on Earth? Why would we invest there versus in other places?” I’d point to some of the use cases we talked about. The ability to provide essential access and then basically full access to the global knowledge base to places in the world that are underserved or unconnected is huge.
That allows for education. It allows for an understanding of what’s happening in local communities, as well as more broadly. To understand what’s happening, and in some cases hold others accountable for what’s happening on Earth, is something that really only space and some space assets can provide.
And there are a whole bunch of new technologies allowing us to better understand things like carbon, methane, et cetera, where it was hard to pinpoint or address some of the sources. We’re able to provide information and analytics, not only for private industry but also for governments to take action.
Think about a utility in Europe that has to make a choice every day: Do they turn on some kind of power plant that relies on fossil fuels? Or do they rely on wind? With space-based assets, they better predict how good the wind will be. And if they don’t turn on that fossil fuel generator that day, that’s carbon that doesn’t get released.
And there are a whole bunch of new technologies allowing us to better understand things like carbon, methane, et cetera, where it was hard to pinpoint or address some of the sources. We’re able to provide information and analytics, not only for private industry but also for governments to take action.
Lucia Rahilly: Related, one of the issues that makes headlines is mining in space, lunar resource extraction, which seems potentially complex ethically, geopolitically, et cetera. Any considerations for businesses to keep in mind in that area, as space becomes increasingly commercialized?
Ryan Brukardt: Our ability to extract certain minerals from either asteroids or other planetary bodies like the moon, and some of the decisions regarding responsible extraction, responsible use, and how that all works, are pretty far away.
What I do think is near-term, though, is that many more nations, many more private companies even, are going into space. And they will start to explore, for example, on the moon. The question is, how do we make sure that even in those early steps that we’re all being responsible? Are we cleaning up after ourselves and working well with others and taking care of all our natural resources, whether here or in other places?
The new space race
Lucia Rahilly: We’ve obviously seen geopolitical risk intensify across the globe in recent years. Is geopolitics a factor in the economy of space? And if so, how?
Ryan Brukardt: The short answer is yes. And it always has been. If you look back at the ’60s and the ’50s, there were a couple of countries in a space race. That generated a massive industrial base in those countries. As that race went on, it generated a lot of economic activity and a lot of technological advancement and, at the end of the day, some pretty spectacular achievements during that time period.
If you look today, we’re in another geopolitical environment where living, working, and using space for national-security purposes will continue to increase. There are maybe more players that are going to be involved in space.
The number of space agencies has grown. It used to be a very, very small number. And now you see many in the Middle East, in Asia, even appearing in Europe. So the interest in space, the use of space, and in some cases, unfortunately, the exploitation of space is going to be an integral part of many countries’ national-security constructs.
So the interest in space, the use of space, and in some cases, unfortunately, the exploitation of space is going to be an integral part of many countries’ national-security constructs.
Job creation
Lucia Rahilly: Any other benefits you want to highlight that the space economy might confer?
Ryan Brukardt: One that it is really helping with in many countries is job creation—and in particular, science- and engineering-type jobs, where there weren’t any. Even if a country can’t launch astronauts from its own soil, for example, it might develop its space economy by providing high-tech components for satellites, for launch vehicles, et cetera.
We’ve been working with some clients to think through this: if they were to do that in their country, what would that mean for their own economy and for the development of their own universities and whatnot?
If you want to engineer and design high-tech components to be launched into space, you need to have engineers and scientists who understand that technology. You need to have universities that can produce those and a secondary-education system that gets people interested in it. Many countries thinking through this emerging space economy come all the way back to how they think about their education systems and where, over the next 20 years, they’re going to generate economic returns for their GDP.
Challenges to consider
Lucia Rahilly: What are the biggest challenges to the space industry at the moment?
Ryan Brukardt: Regulation is definitely one. There is tension between how much innovation versus regulation we want as a global economy. The second is tension regarding how many players are involved, whether they’re private companies or governments. We don’t necessarily want a domain to tighten. We want free and open use. How is that going to evolve?
The third is how rapidly some of these technologies will be applied to different types of business problems. And it’s on this third one where we spend a lot of our time with client work. We are working with clients in the mining industry and the agriculture industry, for example, to think through: how can they use those capabilities we talked about before—communications, mobility, and different types of analytics—to solve their own business problems?
At the end of the day, if you’re an executive working in a particular industry, it doesn’t really matter how you fix your business problems: in space, on the ground, with some other technology, or with generative AI. What they really want is better outcomes for their customers and employees.
Starting on your space strategy
Lucia Rahilly: You’ve said in the research that the space economy is at an inflection point. What do you expect to happen in terms of the dynamics of growth in coming years?
Ryan Brukardt: The short answer is we’re going to see significant growth in the space economy over the next ten years. When we set out to think about what’s going to happen in the economy, we didn’t want to use some top-down number. We wanted to think through all the use cases, both government and private-sector use cases, and build this projection from the bottom up. We think that’s important because the space economy is likely to almost triple in the next ten years, from $630.0 billion to $1.8 trillion.
And we talked about this whole concept of backbone and reach. Frankly, as someone who works in the space industry, we have a hard time talking about reach. We like to talk about satellites and launch vehicles. And it is really reach that’s going to propel the space economy from that $630.0 billion to $1.8 trillion. It’s an exciting time, which is why we say we’re at this inflection point, as more and more folks on Earth benefit from space and figure out how to use those capabilities.
Lucia Rahilly: Should private-sector leaders put space on their agendas? And if so, how should they think about incorporating space into their strategies?
Ryan Brukardt: Well, space is the final frontier, right? Everybody needs to have it in their strategy. What we’ve been working on with our clients in this period of rapid change—not just in space but across many industries—is using a bit of that excitement about the capabilities provided in and through space, a bit of that technological change, and a bit of that passion to say that space can really change the world even more than it already has.
See how it can work in your business, in your government, and for your people, whether they’re employees or residents. It can and will continue to touch the lives of everybody throughout Earth. I know it sounds lofty, but we believe it is true.
The types of leaders who change the world
Roberta Fusaro: Next up, what can CEOs learn from dynamic leaders in history? Here’s author and Harvard fellow Moshik Temkin.
Moshik Temkin: We can’t understand transformative, important leaders without understanding the history that shaped them and made them, the world in which they came up, and the crises that they faced. It’s more of a question that never has a clear answer. Because for every important leader that you look at, you’ll find that that leader is forged by history and the circumstances that that leader faces. But also, really important leaders then change things, and they create the transformation that makes the world different. So they make history.
If you consider the types of leaders who are in the book, you really find three kinds. The first is people who have power. You can talk about presidents. You can talk about people who have institutional or formal power.
Then, there’s a second group: for example, the suffragists who were fighting for the right of women to vote or Martin Luther King Jr. or Malcolm X, who were fighting for the African American struggle in the 1950s and 1960s. They’re not heads of state. They don’t have formal power, but they do have some power and they find alternative sources of power to achieve the kind of change that they want.
And finally, there’s another category that is very interesting, and that’s where the opposition comes from. Because opposition means sometimes that you’re quite literally in danger. So think about, let’s say, the French resistance during World War II or people who were escaping slavery in the 19th century in the United States. These are people for whom the stakes couldn’t be higher. It’s life or death, right? And their opposition to power is quite literally putting their own lives in danger. And sometimes the lives of others are at risk. How do you lead when you have no power?
If I try to translate this to the business world, the really interesting question is this: let’s say you’re part of an organization or a corporation. You’re not at the top. You have some power. You might decide that you want to replace the person who holds power. That’s a very tricky thing to do inside an organization, because that can cost you your own career, your own success. But by creating alliances, by being strategic, by thinking about the strengths and weaknesses of the person above you—sometimes the person at the top—you can find ways to eventually realize your own goals and ambitions within that hierarchy.
The list of problems and challenges that we have is a long one. The question is, are we going to be able to find the leaders and the leadership we need? I see those leaders. They’re not known yet, and they’re not famous. But when we identify such people, we need to encourage them, we need to rally around them, and we need to help and support them. If people who are listening to this view themselves as such leaders, then they shouldn’t be shy about trying to step up and do the things that need to be done. Because ultimately for me, leadership, true leadership, is a form of public service.
