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Space Economy To Exceed US$ 250 Billion In 2008 As World Embraces Next Business Frontier

The Space Economy, defined as the full range of economic activities in the course of exploring, understanding and utilising space, has become the next great frontier for business growth exceeding US$ 250 billion, according to Tuesday’s report by the Space Foundation, a non-profit research and education association.

More than 70 percent of total global space revenues were derived from the commercial space industry with US$ 173.4 billion in 2007. NASA’s budget by contrast is only US$ 17.3 billion in 2008. Commercial satellite services accounted for around 55 percent of total commercial space revenues. GPS-related services exhibited the fasted growth rate at 20 percent.

Phillips & Company, a global business development and market consulting firm based in Austin, Texas, launched its Space Technology and Commerce Practice today, on the 49th anniversary of the Mercury Seven press conference, when NASA introduced the first seven astronauts to the world. “We believe that the business opportunity in space technology and commerce will outpace and eclipse the growth we saw in the early days of the Internet,” said Rich Phillips, president of Phillips & Company.

“The Space Economy is a gold rush of growth opportunity for companies in communications, security, environmental monitoring, networking, entertainment and defence. As the networks of the earth are connected to the networks in space, this global communications revolution will make it possible to locate or communicate with any person or object anywhere on earth — or beyond,” Phillips said.

According to NASA Deputy Administrator Shana Dale, “The Space Economy impacts just about every aspect of how we live, work, and play, including weather and climate monitoring and space-based security applications that keep us safe. When we pay for gas at the pump, draw cash from an ATM or enjoy listening to satellite radio, we experience the benefits of the Space Economy.” NASA reports that the space economy has provided more than 1,500 kinds of technology that have worked themselves into our lives, most notably satellite radio, cell phones, global communication and laser technology.

The Space Foundation Space Index published by the Space Foundation, tracks the market performance of 31 public companies with predominantly space-related revenues. Since its inception in 2005, the Space Foundation Space Index has grown by 29 percent and outpaced S&P 500.

High-technology leaders are embracing the growth opportunities of the Space Economy. Since 2003, Cisco Systems has demonstrated a commitment to space-based networking extending the Internet to satellites with onboard routing. Google has also weighed in on the role of the Space Economy in a presentation to NASA and government leaders this January. “Isn’t it obvious that spacecraft should have an Internet on them, too?” said Google CEO Eric Schmidt.

NASA, which turns 50 this year, has been shifting its focus in recent years in support of a public-private partnership model that fosters increased collaboration with commercial enterprise. According to NASA Administrator Michael D. Griffin, “The Space Economy today is much bigger than NASA and becoming more so. But NASA has another role to play, that of an important catalyst for new ideas and new technology by setting extraordinary goals and engaging the imagination and drive of entrepreneurs in the private sector.”

The Federal Aviation Administration Office of Commercial Space Transportation issues licenses for the operations of non-federal launch sites, or “spaceports.” There are currently 14 spaceports in the United States with eight more currently in the planning or construction phase, including Spaceport America in New Mexico. According to the FAA, space tourism could generate more than US$ 1 billion in annual revenue by 2021, the largest share comprising suborbital flights, like the ones proposed by Richard Branson’s Virgin Galactic.

By 2012, Galactic Suite, based in Barcelona, plans to bring its first guests to an orbital space hotel for several days of weightless rest and relaxation roughly 200 miles above the earth.

Conservatively, the Space Economy is expected to experience a CAGR between 12 and 18 percent over the next five years. Said Phillips, “If this trend continues, the Space Economy will be a trillion dollar market within 10 years. Companies that understand how to translate technology innovation into sound business practices will win. Regardless, no one can deny that our future is in the stars.”

About Phillips & Company

Phillips & Company helps leading companies achieve sustainable revenue growth through the creation and execution of strategic business development campaigns. Business solutions include brand positioning, business development, public relations, integrated marketing and government relations. Ultimately, Phillips helps companies create demand for their products and services by broadening and reinforcing the trust customers, partners and investors have in their company. Headquartered in Austin, Texas, Phillips & Company has operations in Miami, London and Hong Kong.

(April 9th- source: Phillips and Company)