Aerospace Industry

Introduction

The Space Vehicle and Missile Manufacturing Industry is comprised of sophisticated businesses that are involved in creating products integral to the current “space race”. This industry is involved in producing guided missiles and space vehicles, developing prototypes, creating “support equipment for space vehicles” and much more (IBIS World, 2018). The industry has evolved dramatically in recent years due to many different factors and influences. The emergence of new competitors that have brought with them new innovative and dynamic goals is one of the factors that has created the most change. The industry in its self is very volatile, this comes as a result of being mainly reliant on the Department of Defense’s budget, issued by congress. However, a multitude of changes and disruptive forces will not influence the growth of this industry, as it is projected to annually grow by 3.7% through 2023 (IBIS World, 2018).

Macro-Environment

For much of space exploration history its been limited to governments and governmental agencies. In 2010, the law that kept private players out of space was enacted and a new space race has begun. These new players now must follow the environment in which they are working and be conscience of the many issues surrounding them.

Politics

Politics and government are both major influencers on what happens in the Space Vehicle and Missile Manufacturing Industry. Over the last fifty years, governmental agencies have controlled the majority of outer space exploration and operations. Space exploration changed in 2010 when President Obama terminated the space shuttle program and brought the first era of spaceflight to a close. In turn, a new era space race has begun, which has opened the flood gates to many new, private, innovative companies to the forefront (Futurism). Congresses budget allocation to the Department of Defense (DoD) is very influential to the success of this industry. Roughly 61% of the industry’s revenue is generated from DoD spending (Soshkin.2016).

Competition is vamping up against national governments to get to space, especially in Asia. One of the fastest growing and most developed space programs in Asia is China. From 2007 to 2014 China deployed four successful trips, landing on the moon. They currently hold a technological advantage to its competitors such as India and Japan. As a result, India and japan have joined forces, entering in a partnership to grow and mature their space technology (Rajagopalan, 2018). While these other countries are catching up quickly, the US still maintains a technological edge in the space industry. The introduction of new private companies is bringing new innovative ideas to the race, however larger, national programs use older and more robust instruction (Rajagopalan, 2018).

Economic

Economic impacts on the Space Vehicle and Missile Manufacturing Industry are very volatile and can greatly impact the success or failures of the industry. As mentioned previously, DoD spending has a major impact on the success of the industry. The industry is projected to grow at an annual rate of 3.7% over the next five years according to IBIS World. This growth is dependent on the predictions that NASA’s funding of space programs will increase, increased defense spending in emerging markets and continued geopolitical tensions that will increase demand for missiles (IBIS World, 2018). As competition in the industry intensifies with the emergence of new, private companies, the commercial segment of the industry will expand and create new innovative opportunities.

Technological

Technological developments have been rising quickly in all facets of human life, it is hard to keep up to date with trends given the fast – life cycle of technology. Such technological developments have really ignited some of the new entrants into big players of the Space race. The idea many of the new private companies are trying to make reality is giving the opportunity to space travel to the public. Elon Musk’s vision for SpaceX is to open the door and allow the public to travel to Mars and the Moon. Alternatively, Richard Branson’s vision for Virgin Galactic is to provide space tourism, the ability to travel in space and get to experience the great views from the trip. Finally, Blue Origin’s Jeff Bezos is also working towards building rockets that can ultimately ferry tourists into space (Caughill, 2017).

One of the big break throughs that Blue Origin has had is creating a reusable rocket, this breakthrough lowers the amount of waste a typical rocket produces and greatly lowers the cost of each rocket given they can reuse the rocket. SpaceX is the only private company capable of returning a spacecraft from low Earth Orbit, which it first accomplished in 2010 (SpaceX, 2018). These private corporations are infusing massive amounts of money into this preliminary vision of getting everyday humans, like you and myself into space. This by either traveling to the Moon, Mars, or just taking a trip into space to be able to experience the view of the earth. With the big push of machine learning, AI, and autonomous vehicles these software’s are also trying to be implemented into space travel.

Legal

There are many Legal obstacles that face the players in the Space Vehicle and Missile Manufacturing industry. For space travel alone, there are international space regulations that limit the scope of what you can do in space. Air traffic management, when a rocket is taking off and its travel must be monitored so that the course of the rocket does not intrude on the path of commercial flights or vice versa. Also, with the goal of space travel for the average joe, insurance comes into play. How do you insure a rocket? What kinds of premiums come with insuring a rocket?