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Home , Commercial use of space

IAC-09.E6.3.4

COMMERCIALIZATION IS REQUIRED FOR SUSTAINABLE AND DEVELOPMENT

Mr. Gary Martin NASA ARC, Moffett Field, CA, , gmartin@.gov

Dr. John Olson NASA HQ, Washington, DC, United States, [email protected]

ABSTRACT

The U.S. Space Exploration policy outlines an exciting new direction in space for human and robotic exploration and development beyond low orbit. Pressed by this new visionary guidance, human civilization will be able to methodically build capabilities to move off Earth and into the solar system in a step-by-step manner, gradually increasing the capability for humans to stay longer in space and move further away from Earth. The new plans call for an implementation that would create an affordable and sustainable program in order to span over generations of explorers, each new generation pushing back the boundaries and building on the foundations laid by the earlier.

To create a sustainable program it is important to enable and encourage the development of a self- supporting commercial leveraging both traditional and non-traditional segments of the industrial base. will not be able to open the space frontier on their own because their goals change over relatively short timescales and because the large costs associated with human cannot be sustained. A strong space development industrial sector is needed that can one day support the needs of commercial space enterprises as well as provide capabilities that the National Aeronautics and Space Administration (NASA) and other national space agencies can buy to achieve their exploration goals. This new industrial space sector will someday provide fundamental capabilities like communications, power, logistics, and even cargo and human space transportation, just as commercial companies are able to provide these services on Earth today. To help develop and bolster this new space industrial sector, NASA and other national space agencies can enable and facilitate it in many ways, including reducing risk by developing important technologies necessary for commercialization of space, and as a paying customer, partner, or anchor tenant. This transition from all or mostly developed and operated facilities and services to commercial supplied facilities and services should be considered from the very earliest stages of planning.

This paper will first discuss the importance of space commercialization to fulfilling national goals and the associated policy and strategic objectives that will enable space exploration and development. Then the paper will offer insights into how government can provide leadership to promote the nascent commercial space industry. In addition, the paper describes programs and policies already in place at NASA and offers five important principles government can use to strengthen space industry.

INTRODUCTION equipment sent into or through space to provide goods or services of commercial value, either by Perhaps the most important step in discussing a corporation or government in a climate why commercialization is a necessary but not conducive to expanded private sector investment sufficient requirement for the affordable and and involvement in space activities. Indeed, sustainable development and exploration of commercial space within this context comprises space is to first define what is meant by several different types of commercial activity to commercialization. Indeed, depending upon the include: government or private purchase of perspective, this term and its viable applicability products, goods, or services, commercial end-to- to the space enterprise has many differences in end responsibility or total systems program meaning, interpretation, implementation, and responsibility, partnerships (to include Public- acceptability. Thus, for the purposes of this Private Partnerships {PPP}), cooperative or joint paper, commercialization is defined as the use of research and development, commercially

1 leveraged government investment (National achievement of NASA established goals. Advisory Committee on Aeronautics {NACA} No payment is made until goal is reached. model), cooperative development (e.g. Typically, these investments are on the order Commercial Orbital Transportation Services of $25M per prize. With these investments, {COTS} project), contractual purchase (e.g. NASA owns “What and Interoperability” Commercial Resupply Services), and planning and industry owns the “How” and with some and development (e.g. Commercial Crew level of investment and some level of risk to Development project) to name just a few. both. Together, these commercial approaches can and should leverage traditional, non-traditional, • Commercial Orbital Transportation NewSpace and commercial space suppliers and System (COTS) Model: This investment in support industry entities through committed a systems development is shared both by the applications of contracts, Space Act Agreements industry member and NASA. The funds are (SAAs), Broad Area Announcements (BAAs), to demonstrate a capability and reliability on Small Business Innovative Research (SBIR) an agreed schedule of milestones as required grants, plus prizes, challenges, and competitions by NASA. The investment level is modest, (e.g. , X Prize) as just on the order of $50M per COTS investment. some of the viable venues for engagement. The Typically, there is more than one firm common thread woven throughout each of these involved with the intent that many suppliers elements is a focus on return on investment, are developed. The COTS model requires entrepreneurial innovation, market expansion, that fixed costs are shared with other and a favorable climate for risk assumption customers. Again, NASA owns “What and based upon reward potential. From a Interoperability,” not “How.” This model government perspective, NASA is responsible requires that substantial investments be for executing its missions as assigned while made by both NASA and firms and that the serving as both a steward of the taxpayer’s risks be shared equally. investment and driver for national and international benefit. As the nation continues on • A New Commercial Use Model: NASA a forward trajectory of sustainable exploration procures services of new entrepreneurial and development of the national capabilities, services using Space Act Agreements and infrastructure, and industrial base to ensure then uses Indefinite Delivery/Indefinite success across the spectrum, commercialization Quantity (IDIQ) contracts to commercialize – in all of its facets – is an essential element of the Government’s operations. Typically, the our overall strategy and plan. investment will be on the order of $150M per procurement. The intent is to develop The following commercial models, some of many service suppliers. In this model, which have been lightly addressed above, may NASA owns the “What” and industry owns form the baseline enabling suite from which to “How” and both share equally in the risk. approach future commercial space opportunities. Directly excerpted from an October 2008 study • A New Procurement Model: Here the Jon Smith of Wyle Laboratories, they include: Design, Development, Test, and Engineering (DDT&E) is paid by NASA for • The Independent Research and fixed cost contracts with entrepreneurial Development (IRAD) model: Where suppliers for services and data, not industry makes an investment to provide a hardware. NASA owns the data, not how service to NASA with the expectation that it the data was developed. Typically, this will recoup some or all of its investment. investment level will be approximately This is only allowed when NASA $200M per procurement. NASA pays the anticipates an acquisition to emerge from the full cost, including the DDT&E and service. Typically, the investments are operations products, but it is left to the small, on the order of $10M, requiring the industry member to determine how the least investment by both NASA and industry products, services, and operations are to be and with a minimum risk to both. developed. As with the other models, the NASA and supplier share risk. • The Centennial Challenge Prize Model: Prizes are offered by NASA for industry

2 Government can use these different models, in U.S. space transportation capabilities”, and dependent on the specific applications, to “the United States Government must capitalize provide strong foundation to jump start a new on the entrepreneurial spirit of the U.S. private industry in and around space development and sector”, and “dramatic improvements in the exploration. reliability, responsiveness, and cost of space transportation would have a profound impact on WHY COMMERCIALIZATION IS the ability to protect the Nation, explore the NEEDED solar system, improve lives, and use space for commercial purposes.” Finally, at his Senate Commercialization is required to open the space nomination hearing (July 2009), NASA frontier. Government programs are driven by Administrator Charles F. Bolden, Jr. scientific objectives not by markets and, by far, encapsulated his vision for commercial activities most humans going to orbit are government by stating: “We can inspire and open the door employees to do government work. Only when new markets are developed can the costs of for commercial entrepreneurial entities to space development begin to fall and space begins become involved, to become partners with to open to private businesses and private citizens. NASA.” New markets will drive innovation and creativity. The government will need to be Fiscal Forcing Function and Driver proactive to enable the commercial space industrial sector to develop and thrive. Given the global economic downturn, blooming federal budget deficits, skyrocketing healthcare, Policy as a Foundation retirement, benefits, and fuel costs, coupled with an ever-increasing demand for government There is a history of direct and progressive spending allocations, plus the high inherent costs emphasis on commercial space at NASA from of challenging human and robotic space the President, Congress, and the Administrator. exploration, it is absolutely critical and The NASA Space Act of 1958 (as amended) strategically essential to effectively leverage the assigns NASA the mission to “seek and innovation, agility, and flexibility of free encourage, to the maximum extent possible, the enterprise through the commercial and industrial fullest commercial use of space”. Building on sector portfolio of resources, talent, and unique this foundation, the Commercial Space Act of capabilities in progressively new and pioneering 1998 (P.L. 105-303) states that “To the maximum ways. Foremost to this effort is the development extent practicable, the Federal Government shall and implementation of a commercial space plan missions to accommodate the space strategy that is flexible enough to accommodate transportation services capabilities of United the wide spectrum of opportunities and players States commercial providers”. The NASA while providing value and benefit to all of the Authorization Act of 2005 (P.L. 109-155) directs stakeholders and participants. By harnessing the that “the Administrator shall…work closely with power of the emerging space industry, NASA the private sector, including… encouraging the can focus its limited resources on inspiring and work of entrepreneurs who are seeking to enabling missions to the , near Earth develop new means to send , crew, or objects, Mars and beyond while making human cargo to .” Adding to this, the exploration of space more affordable and NASA Authorization Act of 2008 (P.L. 110-422) sustainable. In the end, long-term sustainability states that “NASA shall make use of United is vitally important to ensure that our strategic States commercially provided International national objectives are met. Driven by policy, crew transfer and crew rescue national, and international dictate, this flexible services to the maximum extent practicable”. approach will leverage technology development, The Presidential Vision for Space Exploration precursor missions, terrestrial analog activities, (2004), along with both the Authorization Acts and an integrated and cohesive stepwise buildup of 2005 and 2008, together defined as the U.S. approach to both open and sustain a host of Space Exploration Policy, lay out a broad important missions. In turn, this forward statement that “To exploit space to the fullest strategy will further open the space frontier for extent…requires a fundamental transformation Americans and our international partners alike, while also addressing top national priorities and

3 yielding robust benefits for the economy, industry, national security, education and Derived from both the Global Exploration inspiration for the next generation, and vibrant Strategy (GES) and NASA’s Exploration advancements in energy, healthcare, the Themes, the following elements focus the environment, and transportation – all of which objectives for sustainable exploration enabled will build a more sustainable and affordable and supported by commercial space activities. future for the nation. • Human Exploration: Reduce the risks and Space Commercialization: Strategic Objectives increase the productivity of future missions in our solar system by testing technologies, These objectives provide the goals of space systems, and operations in an off-Earth commercialization from a government Planetary environment. Develop the perspective and can assist in determining the knowledge, capabilities, and infrastructure types of approaches governments should use to required to live and work in space, with a create a strong foundation for space focus on continually increasing the number commercialization. of individuals that can be supported in space, the duration of time that they can • Open the space frontier for a broader remain there, and the level of self- segment of the population, such that sufficiency for space operations. increasing large numbers of the American • Scientific Knowledge: Engage in scientific people can play, work, and eventually live in endeavors to support human exploration and space to advance human knowledge and • Achieve low-cost and reliable access to understanding. space • Economic Expansion: Create new markets, • Enable responsive space operations based upon Suborbital, • Ensure best value for the Nation and (LEO), International Space Station (ISS), taxpayers lunar, cis-lunar, Near Earth Object (NEO), • Continually pursue improved safety and Mars, and other destinations, that will return mission success in an affordable manner economic, technological, and quality-of-life • Produce dual-use benefits for economic and benefits to all humankind. national security • Global Partnerships: Enhance global • Sustain existing high-quality jobs and create security by providing a challenging, shared, new high-wage jobs peaceful, and inspirational global vision that • Stimulate and enable new commercial space unites nations in collaborative pursuit of markets, and orbital capabilities beyond common objectives. access to orbit both in the near and long • Public Engagement: Use a vibrant term exploration program to excite the public • Enable space-based infrastructure (e.g., about space, encourage students to pursue propellant depots; orbital transfer services; careers in high technology fields, and ensure on-orbit servicing, inspection, repair; orbital that individuals enter the workforce with debris clean-up capabilities; lunar cargo, scientific and technical knowledge necessary navigation and communications, and near- to sustain exploration. Earth object resource extraction) • Inspire the next generation of scientists, Commercialization of Space: An Enabler engineers, teachers, and explorers • Provide students, scientists, and researchers Government programs are stable and reliable, with new low-cost access to space sometimes at the expense of efficiency and capabilities innovation. They can be cumbersome and • Produce significant reductions or game- because many of the programs take many years changing innovations in the cost, to be complete, they are often disrupted by the performance, safety, and/or sustainability of periodic changes within the political system. For human exploration of space example, NASA has not been able to field a new • Help new markets, capabilities and services human-rated flight system since the Shuttle, become self-sustaining which first flew in 1981, twenty-eight years ago, though there have been many programs that were Global Exploration Themes started but not completed such as, the Space

4 Launch Initiative, Space Plane, and the X-38 regulatory environment that is increasingly Crew Return Vehicle. As commercial systems conducive to commercial engagement and become available to private citizens as well as to success. True market need and viable the government, NASA will be able to reap the opportunities are also helping make the present benefits of a new system’s ability to amortize perhaps the most viable time in history for the their cost over a larger customer base. For increasing commercialization of space. example, it is estimated that a government developed robotic to the Moon to collect Although several excellent studies have been engineering data needed for the design of lunar done on the potential of commercial space systems would cost upwards of $100M, markets, a recent study by ATK showed that however, buying the same data from a several key lunar markets exist for commercial company may cost as low as $10M. communication and navigation (both orbital and The ability of commercial companies to market lander missions), data buys (science, precursor, capabilities to more than just the government and resource mapping), technology validation, allows cost to be spread out over multiple entertainment (internet tele-operated rovers, entities and lowered for any specific customer. viewing stations, television specials, etc), The market also fosters an entrepreneurial educational, as well as special or unique niche environment and innovative solutions for markets (memorabilia, personal artifacts, companies to stay in front of competitors. advertisement, spreading of ashes). Importantly, the potential customers include Timing: Now is the Time government space agencies, heavy-, automotive-, hospitality-, and manufacturing-industries, According to the 2009 Space Report, the global energy and resource interests, academia space economy grew 2.5% in 2008, rising by $6 supported by private, and governmental sources, billion to $257 billion in worldwide space the entertainment and tourism industry, and revenues despite the global economic downturn. private investment funds. Possible service Even further, the report noted that only 32% of providers include the communications industry this global market was driven by government (communication and navigation), Google Lunar spending, leaving the remainder to commercial X-Prize contestants (lander mission expenditures. In the US alone, the Federal brokers/integrators), commercial and Aviation Administration (FAA) estimated that companies (launch, in-space, and landing the direct valuation of the commercial space systems), as well as international entities. The transportation sector was $23 billion, and $139 overall commercial market assessment is billion when secondary and tertiary industries positive, but more investment, likely in the form were included – a value that exceeds 1% of the of government support, directed mission U.S. Gross Domestic Product (GDP). Within the allocations, data purchase agreements or U.S., the burgeoning growth of entrepreneurial requirements expansion is needed to incentivize space transportation and space support firms has equity investments and expand the viable continued to increase, again, despite the business cases. challenging economic environment. Thus, with the commercial space sector poised for In summary, in the U.S. strongly expansion and further engagement in the early supports enabling commercialization of space. 21st Century, a timely window of opportunity NASA should continue to partner with industry exists to leverage catalytic stimulus evidenced in to leverage resources and meet strategic the aviation industry in the early 20th Century. objectives both national and global. These Applying the positive lessons learned from the partnerships can reduce cost for government development of the aviation industry driven by missions and now is the best time for government investment, utilization, and enabling government to move more aggressively to policy, coupled with commercial investment, support space commercialization. responsiveness, and committed partnership, the U.S. can leverage this same recipe for continued PRINCIPLES TO STRENGTHEN THE global leadership, innovation, and sustainable COMMERCIAL SPACE INDUSTRY operations in space for the future. The current timing is unique in that a combination of In order to address the fundamental principles to multiple competent, well-funded, and capable strengthen use of commercial space, the barriers industry entities have emerged along with a to commercial space industry and partnerships

5 must be addressed. At a top level, these barriers reliable partner. Moreover, ensuring include elements across the technical, economic, coordination across the agency and where policy, regulatory, and legislative spectrum: applicable, across the U.S. government such that there is “one federal voice.” Developing • High capital costs processes to allow complementary actions • Availability of equity between commercial, international and • Indemnification and insurance technology development partnership • Market stability: Demand rate and quantity opportunities is vital to ensuring an integrated dynamics strategy space approach. For execution of the • Customer base: Diverse customer base partnership, NASA seeks to be proactive, but • Export control/ International Traffic in Arms flexible. As a matter of course, international Reduction (ITAR) policies versus commercial partner decisions are made • Technology: Key technologies or considering a broad array of evaluation criteria capabilities that only the government has on a case-by-case basis. . Similarly, it is (that could/should be made available) essential to review strategies with key • Culture and perception: Proven, traditional, stakeholders regularly through frank and open historical performance, “failure is not an two-way dialogue. option”, “tried and true”, • Risk tolerance, safety and mission The NASA Exploration vision with respect to assurance: policies, regulations, and commercial partnerships includes the following directives, oversight, insight, quality key concepts: assurance, inspection, review, analysis, and testing • We are leading a global space exploration • Procurement and acquisition regulations endeavor. Other countries also have • Legal and regulatory environment exploration objectives and we are partnered • State, federal, and international law in ways that allow everyone’s objectives to • Environmental considerations be met • Policy considerations: Extracted resources • Existing partnerships are strong, and we are and mineral rights, governance, space traffic building new ones to strengthen our management, orbital debris, space tracking preparations for ultimate human missions to and surveillance, launch and re-entry, Mars, leveraging a “build-up” approach national vs. multi-national interaction along the way with increasingly challenging • Lack of cohesive and integrated National and fulfilling objectives space strategy or space policy across the • Architecture and supporting systems allow government U.S. science and Mars Forward objectives to be met. Commercial Partnership Policies and Criteria • Partners have people, assets, products, services, and contributions that are In order to identify and evaluate the merit or synergistic with our objectives utility of potential commercial partnerships or • Nations with critical capabilities are commercial engagement activities, NASA uses coordinated to enhance the robustness of the following non-inclusive list of criteria to space exploration. Interoperability between guide its strategic exploration decisions. First, commercial, government, and international the activities must comply with existing policies entities is essential. and statutes or be dependent upon successful • Commercial partnerships exist to enable establishment of new policy or statues. Integral new markets or enhance exploration mission to this effort is the determination that the policy success is documented in requirements documents, • Public interest and engagement are strong across other government entities, and that it is and must be expanded for long-term widely understood. Applicable government, sustainability and support international, and industry-to-industry agreements are addressed and evaluated. It is With this vision, NASA does the following very important to choose partners wisely, such strategic activities relative to commercial that the partnership should help the U.S. achieve partnerships: our goals and have a reasonable chance of success. In turn, NASA and the U.S. should be a

6 • Lead and engage in development of space value, ease, or some other resource or constraint exploration architectures, concepts of limitation? operations, mission scenarios, and functional capability systems assessments to identify Additionally, the following strategic specific cooperation opportunities considerations are important planning drivers. • Secure international and commercial contributions to the architectures while • Agreements between NASA and integrating them into existing government commercial partners vary by: and industry architectures and systems-of- o Goals: May or may not include systems private space and/or terrestrial • Encourage the development of markets. complementary capabilities that will one day o Purpose: Technology development, be relevant to human exploration beyond capability demonstration, LEO association with NASA • Pursue near-term science and precursor • Establish commercial partnership goals and mission opportunities sub-ordinate objectives to include success • Create conditions that enable commercial criteria and appropriate Figures of Merit partners in sub-orbital, LEO, and Beyond- (FOMs) for evaluation LEO exploration • Provide a mechanism to receive and review • Enable commercial investments that unsolicited partnership proposals enhance sustainability of the exploration o Level the playing field for all program commercial entities • Maximize and promote use of partnerships o Continuously demonstrates our to mature technologies openness to consideration of ideas • Establish mechanisms to coordinate and that would benefit NASA implement our partnership strategy o Answers the question: “How does including: roles and responsibilities, Company X begin to explore the mechanisms, timelines, and roadmaps idea of partnerships with NASA?” • Actively, vigorously, and continually look Criteria for NASA (or other Governments) for new opportunities. o Think “outside the box” and search As a general policy, the following evaluation for both conventional and criteria for government consideration and pursuit unconventional solutions. of commercial space engagement are o Pursue both evolutionary and recommendations that should be followed for revolutionary opportunities ensuring value while enabling and sustaining the o Invest near, mid, and long terms commercial space industry. Given the relative potential immaturity of a true commercial space market, • Provide mechanism for reviewing internally the following recommendations are focused generated ideas upon pioneering stimulus or opening of o Incentivize innovation, cost- particular sectors, missions, or opportunities. In savings, efficiency, and excellence this sense, they act as enablers or catalysts for • Critically assess and evaluate various growth. Commercial Market Approaches (CMAs) o If the activity is intended for a 1. Determine the value proposition to NASA private space and/or terrestrial and the government. market, then it should fall under the 2. Assess or determine the responsiveness domain of NASA’s/government’s (agility) of the potential options Commercial Development Policy 3. Allocate appropriate market or scope such o If the activity is intended for a that government does not compete with industry. private terrestrial market only, the Careful consideration of balance between the more “traditional” agreements may promotion of competition, innovation, and be appropriate efficiency should be applied. o If the activity is intended for a 4. Is the approach innovative or substantially government space market, then differentiated by cost, schedule, performance, consider looking at acquisition or procurement, paying close attention

7 to Organizational Conflict of To create partnerships the government can Interest (OCI) issues execute a continuous process for soliciting o If the activity is focused on the information from the private sector to identify outsourcing of research, test, or potential commercial partnerships. NASA’s developmental proof of concept, Exploration Systems Mission Directorate created then the partnership purpose must a “Solicitation of Commercial Information” be considered. (SOCI) process (see Figure 1) for both • Evaluations of the partnership purpose shape identification and selection as part of a broader the approach: Commercial Development process (see Figure 2) o Capability Demonstration in order to provide formal “on-ramps” to receive . May seek NASA funding information from all commercial entities, use or expertise information to recommend specific commercial . Example: COTS Phase 1 partnership opportunities, including developing a o Technology Development plan to use ISS as a test bed for understanding . May seek NASA funding the scope and issues associated with commercial or expertise investments seeking utility and visibility. o Partner intends to provide a capability in return for visibility To promote public private partnerships, . What are the applicable government should: laws, policies, and • Pursue best practices, ideas and political sensitivities? concepts to encourage commercial o Some other reason that NASA space capabilities, finds beneficial • Adopt a needs-based approach for identifying near term priorities, As an over-arching NASA principle, commercial • Establish evaluation criteria, partners are welcome and pursued in all aspects • Maintain openness to hearing any of the exploration architecture (as appropriate). proposal or idea, Further, non-acquisition partnerships to meet • Pursue risk-based approach to capitalize NASA mission needs are encouraged. on new or emerging opportunities Codifying this approach, the NASA Exploration • Create an industry advisory group to Commercial Development Policy outlines the ensure that good communication policy to proactively enable development of space markets. Commercial partners are as vital 2. Lower the barriers to entry element in all future exploration plans. For The previously discussed barriers to entry in the lunar exploration, interesting ideas include: lunar space industry and related fields represent data buys, lunar payload delivery, lunar significant challenges to overcome. Yet, communications and navigation services, High prudent, forward-looking government leadership Definition Television (HDTV), fuel depots, lunar across the policy, regulatory, and business mobility, , commodity re-supply, domains can substantially enable improvement. and participatory exploration. The future is truly Integrated alliances, aggressive pursuit of timely exciting and commercial partners can take solutions, and persistent forward progress are advantage of the visibility associated with their essential to enable commercial sustainability partnerships to help leverage and expand their improvements future success. One approach is to review NASA’s roots as it Principles to Strengthen Commercial Space develops its commercial strategy. Before NASA Industry there was the National Advisory Committee for Aeronautics (NACA), which was instrumental in 1. Create true partnerships the development of key technologies. The The government should not dominate the charter was not to create a government air partnerships. It is not “the customer” but is “a transportation system, but to study the problems customer”, and it should lead and support with of flight and to identify and resolve the risks that the appropriate balance while exercising prudent were keeping air travel from being safe and insight, oversight, responsibility and commercially viable. Under the NACA model accountability. the government worked closely with industry to fund projects that retired technological risks and

8 enabled private enterprise to successfully create property rights in space is not clearly defined and a new industry. Under this model, NASA would most likely world governments would not develop and retire the risks of important recognize any claims of rights at this time. technologies to enable space industry. Individuals or companies interested in developing space resources are at serious risk 3. Establish tax and investment incentives that their investments would be challenged under Throughout recent history government has used the existing framework until the current treaties its ability to set tax law as incentive to stimulate are modified to support space commercial new areas of economic growth. Encouraging interests. new businesses to invest in creating new markets in space by providing tax breaks can improve the In addition, governments can adopt policies that business cases of those entrepreneurs and help allocate support as necessary in the event the jump start a new industry. planned customer base is not sufficient to close the initial business case. For example, the Incentives, like prizes for space-based government can become an anchor tenant or competitions, have also shown their investor. Governments can also allocate a effectiveness. The excitement of the competition fractional percentage, specific mission, or data and the eventual winning of the purchases to be executed via a new commercial followed by the recent successes of the paradigm that advances the general commercial Centennial Challenges program illustrate the space industry important role that prizes can play in motivating . new commercial endeavors. The X-Prize 5. Create a diverse portfolio competition was the seed for the creation of a By investing in diverse solutions, multiple whole new industry building up around human approaches to the same function, a robust sub-orbital flight. foundation for space development can be created. For example, if the Shuttle were the Strategic use of tax breaks and incentives like the only way to service the ISS our planning for ISS use of prizes is a good way for government to utilization over the next few years would look leverage funds and encourage investment in new very different. Multiple options for Earth-to- industries. orbit using commercial and government systems provide a robust solution and this same approach 4. Create policy and laws to protect space can be use in other areas like communications investments and resupply. There are many complex policy issues such as property rights and liability in space that require A diverse portfolio creates competition which government action to reduce risk for new space drives performance up and costs down. It also businesses. Governments should take a can provide additional stability for the overall proactive stand to settle these issues so that they since it is robust against the can reap the benefits when failure of any specific system failure. For example, if one launch system fails there are The current status of private ownership or other launch systems that can be called on to property rights in space is dominated by policies complete the needed task. that were captured in treaties developed during the Cold War. The result is that the principle of

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Figure 1. Commercial Partnership Solicitation, Selection Process

Figure 2: Commercial Development Process

10 CONCLUSIONS Jon Michael Smith,, Wyle Engineering Laboratories, 20 Oct 2008. This paper has focused on the role of government and what it can do to enable the NASA Exploration Systems Mission Directorate creation of a strong commercial space industry, (ESMD) Partnership Strategy, 8 Oct 2008. which is required to meet U.S. goals in space. In fact, without a commercial underpinning the Astrobotik Business Overview, Dr. Whittaker, space frontier will remain solely under the 24 Sep 2008. purview of government programs which will severely restrict the promise that the vast frontier ATK Commercial Lunar Launch and Landing offers. (LLL) Services Market Assessment Study, Rod Wilks, 24 Sep 2008. By creating a strategic approach involving funding and policy incentives, a broad range of Transcript of the US Senate Confirmation relationships between the space industry and Hearing for NASA Administrator Charles F. government can be used to jump start the nascent Bolden Jr, July 2009. space industry. These relationships can range from the government procuring services such as 2009 Space Report, The Space Foundation. communication or transportation, as is done on Earth today, to partnerships where government FAA Annual Commercial Report. and industry develop new technologies and systems together that are important for space Glen E. Bugos and John W. Boyd, Accelerating development. entrepreneurial space: The case for an NACA- style organization. Space Policy (2008), The government is the key to providing a pro- doi:10.1016/j.spacepol.2008.06.003 space industry environment and there are many actions that should be taken to provide the foundation that is needed. In this paper they Martin, Gary L. ‘Evolution of Government and have been summarized into five specific areas of Industrial Partnerships to Open the Space action that can be taken: create true partnerships; Frontier’. IAC-08-B3.5.2, 2008. lower the barriers to entry; establish tax and investment incentives; create policies and laws to protect space investments; and, create a diverse portfolio. These actions strengthen the ability of companies to be successful and create business cases that will work in space. Hopefully, new markets will arise which enable new businesses and the cycle will one day create a burgeoning commercial sector around space exploration and development. Some of these policies and programs are already in place and are already changing the way the government is approaching its objectives.

For those who are interested in opening the space frontier, it is clear that space commerce is a fundamental building block and it is important that government provide the incentives and environment to let this important new area grow.

REFERENCES

An Analysis of Strategies for Commercializing Communications and Navigation on the Moon,

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