The New Space Economy
For most of its history, space was a government project with occasional commercial contractors attached. That relationship has now inverted. Commercial activity accounts for roughly 78% of the global space economy, and the sector has moved from a niche satisfying national prestige and defense needs into one of the more consequential emerging asset classes advisors will field questions about over the next decade.
The size of the opportunity
Estimates vary by methodology, but the direction is consistent. Novaspace puts the global space economy at $626 billion in 2025, up from roughly $613 billion in 2024, on pace to cross $1 trillion sometime in the early-to-mid 2030s. More aggressive projections from McKinsey and the World Economic Forum put the 2035 figure as high as $1.8 trillion. Government space budgets total around $132 billion annually, with the U.S. responsible for roughly $77 billion of that — meaning commercial activity is already running at nearly four times the size of all government space spending combined.
Growth is running at an estimated 8–12% annually, comfortably outpacing global GDP growth, with commercial space specifically growing faster still, in the 12–15% range.
What's actually driving the growth
Launch costs have collapsed. Reusable rocket technology has cut launch costs by an estimated 95% over the past decade, turning space access from a scarce, government-gated resource into something closer to a competitive commercial service. SpaceX alone completed 134 launches in 2024, capturing more than half of global commercial launch market share and effectively setting the pricing floor every competitor now has to operate under.
Satellite broadband has become a real consumer business. Starlink reached 9 million subscribers by the end of 2025, with revenue climbing from roughly $11.4 billion in 2025 toward an estimated $20 billion in 2026 — proof that space-based broadband can scale as a profitable consumer product rather than a subsidized technology demonstration. Amazon's Kuiper constellation is expected to add meaningful competitive capacity as it deploys through 2028.
SpaceX going public reset the sector's valuation ceiling. In June 2026, SpaceX completed the largest IPO in history, raising an estimated $75 billion at a roughly $1.8 trillion valuation, before trading up past a $2 trillion market cap within its first day — making it the most valuable space company on public markets by a wide margin, and the clearest signal yet that public investors are willing to price space infrastructure at a premium previously reserved for the largest technology platforms.
Defense and sovereignty needs are now a primary driver, not an afterthought. Novaspace's most recent research flags defense and national security spending as the dominant force behind 2025's growth, a dynamic expected to persist through the late 2020s as geopolitical competition extends into orbit — satellite-based intelligence, communications resilience, and anti-jamming capability have all become active procurement priorities for the U.S. and allied governments.
Where the money still isn't proven
Not every segment of the space economy is equally mature. Earth observation and analytics remain highly fragmented, with more than 150 companies competing for a market that hasn't yet consolidated around clear winners the way launch services have around SpaceX and China's state-run CASC. Private venture investment, while recovering, remains well below its 2021 peak of roughly $15 billion annually — 2025's $9 billion in private space investment was the largest annual increase since that peak, but is still concentrated heavily in late-stage, already-proven companies, with investors staying notably cautious on early-stage, higher-risk ventures like in-space manufacturing and lunar infrastructure.
The regional picture
The U.S. remains the largest national space economy, estimated at roughly $168 billion in 2026, supported by a uniquely vertically integrated industrial base spanning launch, manufacturing, and downstream digital services. Europe follows at an estimated $166 billion, with the UK and Germany as its largest contributors. Asia-Pacific is the fastest-growing region on a relative basis, projected to expand from about 18% of global market share in 2026 to 28% by 2036, as China and India scale up independent launch and satellite capacity.
What this means for client conversations
The space economy has crossed a threshold that matters for advisors: it's no longer solely a government-funding story that lives outside normal capital markets logic. With a nearly $2 trillion publicly traded anchor company, a genuine consumer broadband business, and defense budgets treating orbital capability as core infrastructure rather than a discretionary program, this sector now behaves more like an infrastructure buildout than a speculative moonshot. That doesn't mean every space-adjacent investment is a sound one — fragmentation in Earth observation and continued caution around early-stage funding are real signals that not every company in this space will make it to profitability. But for clients asking whether space is "a real investment theme" or just enthusiasm carried over from headline-grabbing rocket launches, the honest answer by 2026 is that it has become a legitimate, if still emerging, infrastructure category worth understanding rather than dismissing.