Executive Summary
While rocketry may be centuries old, orbital space launch began with Sputnik in 1957. In the following decade, fueled by government funding and motivated by the “Sputnik surprise,” American space launch had a burst of activity, with more than half a dozen companies attempting orbit.1 In the decades since, however, the number of companies responsible for space launches has ebbed and flowed. Following the early burst of activity, the number of launches and companies responsible for them decreased. By the mid-2000s, a single firm dominated the field: the United Launch Alliance. ULA was slowly displaced by then-upstart SpaceX, whose pace exploded starting around 2017. Recently, a handful of would-be competitors have shown the ability to achieve orbit, successfully launching commercial and government satellites.
Today, the United States finds itself in the enviable yet challenging position of world leader in launch, yet with a relatively consolidated market. The country conducts 50 percent more launches than it did at the peak of the space race—but five of every six U.S. launches come from a single provider, SpaceX. With a tranche of new companies vying to challenge SpaceX’s dominance, it will be crucial for federal officials to carefully calibrate policies that shape the market.
As with any national security-relevant market, concentration poses risks: supply chain disruptions can threaten military capability, while government bargaining power shrinks. Likewise, a more competitive market comes with the benefits of increased innovation incentives and improved resilience. Federal policies should pursue improved competition, but must balance those policies with current national security needs to reliably and rapidly launch growing numbers of defense and intelligence spacecraft. Policymakers must also ensure that domestic launch companies retain the flexibility and capacity to compete globally, outpacing their state-directed competitors.
In its evaluation of the American launch market’s ability to meet critical U.S. national security and foreign policy needs, this paper finds the following opportunities and challenges:
Opportunities: The United States leads the world in space launch by nearly every measure: number of launches, total mass to orbit, satellite count, and more. SpaceX’s emergence has provided regular, reliable, and relatively affordable launches to commercial and national security customers. It has also had a role in seeding talent in other startups. Alongside SpaceX is a small group of technically viable alternatives. This variety offers the country a measure of resilience in the face of national security threats. Extending this advantage could include further investment in strategically important areas such as responsive launch, in-space transportation, or small launch to particular orbits. Leveraging and expanding the U.S. advantage not only enhances national security but compounds market resilience by building a viable avenue for new market entrants.
Challenges: Competition is important for resilience and incentivizing innovation—but today’s market consolidation and the capital requirements necessary to develop rockets make it difficult for new competitors to break in. Simultaneously, the People’s Republic of China (PRC) has shown the ability and willingness to invest the level of capital needed to create international competition for the United States. Navigating these dual challenges will involve careful steering by U.S. policymakers.
This paper makes the following recommendations to protect U.S. national security interests and ensure an enduring American advantage in launch:
- Congress should fund and the U.S. Department of Defense and NASA should conduct research and strategic investment in transportation technologies in space through grants, government demonstration missions, and agreements to purchase commercial transportation services.
- The DOD, intelligence community, and NASA should regularly execute small satellite missions and expand purchases of small launch vehicle services in order to cheaply test technology and encourage a competitive future launch market.
- Congress should fund, and the DOD and NASA should implement, expanded launch infrastructure capacity, dispersion, and resilience to improve U.S. launch capacity in peacetime and safeguard it in case of conflict.
- The federal government should promote competition in the commercial space launch industry by continuing to allocate launches among multiple competitive vendors, thereby ensuring resilience and innovation.
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Shaping the U.S. Space Launch Market- “The Sputnik Surprise,” Defense Advanced Research Projects Agency, accessed October 20, 2024, https://www.darpa.mil/about-us/timeline/creation-of-darpa.