The document discusses the history and structure of the global space launch services industry. It notes that in 2013, commercial space industry revenues were estimated at $256.2 billion. The industry originated in the early 1900s and was initially dominated by government actors, but has seen growth in commercial segments. The 2006 merger of Boeing and Lockheed Martin's space ventures into the United Launch Alliance created a monopoly in the defense satellite launch market, which has recently opened to competition.

1. Michael McLean
@michael_mclean
The History and Recent Developments
Market Structure
of Space Launch Services

2. • In 2013, revenues from global commercial actors were
es?mated at ~$256.2B
• Of that, the manufacturing supply chain for spacecraJ
systems accounted for ~$85B
Primer

3. • The industry has origins in the early 1900s with the first
patents being filed for rocket designs by Robert Goddard
• In response to the Soviet launch of Sputnik I in 1957,
the USA began large scale investments in space systems
• Ini?ally dominated by government actors
Brief History

4.
The Space Stack
Downstream: Consumer Applica:ons
Operators: Launch service,
and satellite service
Tier 1&2: Design and manufacturing of
equipment and subsystems
Tier 3&4: Material & Components suppliers
Scien:fic and engineering consulta:on
Primes: Space system integrators

5. Four Main Factors
• Civilian R&D budgets
• Ins?tu?onal budgets
• Regulatory Frameworks
• Human Capital
Industry Inputs

6. Sample of Outputs
• Rocket manufacturing and launch ac?vi?es
• Launch Insurance Market
• Satellite telecomms
• Earth Observa?on, GPS, Weather tracking
• Human Spaceflight
• Launch Insurance Market
Industry Outputs

7. Commercial Segment
• Higher elas?city of demand since they answer to
shareholders
Government Segment
• Lower elas?city of demand since projects are in
na?onal defense and scien?fic interests
Segmenta:on

8. Cournot Oligopoly Structure
• In the Cournot game, if the fixed-­‐costs are too high,
the equilibrium # of firms is 0. The space launch market
followed this structure in its early days, so governments
had monopolies on space access.
• The lower the fixed cost, the higher equilibrium # of
firms, so as costs fell, there were commercial entrants
Government Actors

9. • In 2006, Boeing and Lockheed merged
their space ventures, crea?ng the
United Launch Alliance (ULA)
• This created a pure monopoly in the
defense satellite market, which has been
just recently been opened for compe??on
• In 2014, a $11B contract was awarded for
27 launches without compe??on
Merger Concerns
Atlas V

10. Analyze the 2006 Lockheed & Boeing Merger
• Inves?gate the consolida?on in the defense market
• Are there any indicators of an?-­‐trust? If so, what is a
possible solu?on?
My Proposal

11. Data
OECD (2014), The Space Economy at a Glance 2014, OECD Publishing, Paris.
DOI: hCp://dx.doi.org/10.1787/9789264217294-­‐en
Images
hhp://upload.wikimedia.org/wikipedia/commons/1/1f/
Atlas_V_551_with_New_Horizons_on_Launch_Pad_41.jpg
hhp://www.spacex.com/media-­‐gallery/detail/126606/4741
hhps://www.nasa.gov/sites/default/files/
16242684611_b978aaa7be_o_0.jpg
Works Cited