A Course for the Commercial Space Age

First-of-its-kind class at HBS examines the economic future of space exploration

silhouette of person looking up from the ground at sky
The new course, led by Elbling professor of business administration Matthew C. Weinzierl, launched last weekPhotograph by Unsplash

As private space exploration companies like SpaceX, Blue Origin, and Virgin Galactic make giant leaps for mankind, Harvard Business School is making a leap of its own. Last week, the school launched its first course devoted to outer space, “Space: Public and Commercial Economics,” led by Elbling professor of business administration Matthew C. Weinzierl. To his knowledge, it is the first course on the economics of the space sector to be taught at an elite educational institution. He hopes the 14-session course will “inspire other places to have their own offerings on space and make this something that is talked about at business schools more broadly.”

The class, taught using HBS’s case-study method, has drawn about 50 registrants from schools across the University, including the graduate schools of Design and Education, the Kennedy School of Government, the School of Engineering and Applied Sciences, as well as from Harvard’s neighbor, MIT. Each class meeting will welcome guests from across the space sector, such as vice president of Blue Origin Ariane Cornell, M.B.A. ’14 and former administrator of NASA Charles Frank Bolden, Jr.

Matthew C. Weinzierl 
Photograph courtesy of Matthew C. Weinzierl

For Weinzierl, recent headlines about the privatized, “billionaire space race” tell only a fraction of a much longer story. “On one level, there was a space industry as long as we’ve been going to space,” he said in an interview. “As soon as Sputnik went up in 1957, [countries] started making sure that there were private sector companies building things that would help” their efforts. Then, in the 1980s under President Ronald Reagan, “there was a push to move the sector toward a more commercial basis.” However, the “real inflection point” came in 2003, when the Space Shuttle Columbia disintegrated midflight and killed seven crew members. The Space Shuttle program was then scheduled for full cancellation by 2011. “That really woke everybody up to the fact that, in this centralized model, something was broken,” he says. “If we were not going to be able to put our own astronauts up in space, we needed a new approach.”

The new approach involved seeking out private partners. NASA hoped that, by pooling their resources with private capital, they could spur sustainable space exploration. “Coincidentally, or perhaps fortuitously,” Weinzierl says, this coincided with tech entrepreneurs such as Jeff Bezos and Elon Musk launching their own space-exploration ventures. He says, “That was when [the commercial space age] really took off." Public-private partnerships, although long-standing in the space industry, are tighter now than ever before. "It's been a fundamentally interesting shift for anyone who cares about space or," he adds, "the future of humanity.”

“Commercialization doesn’t have to be a dirty word,” adds teaching fellow and course research associate Brendan Rosseau. Well-resourced private actors have propelled the space sector toward the economies of scale it needs to put more people and more infrastructure, such as national security and internet satellites, into space. As of 2019, 95 percent of the $366 billion sector was in what’s called the “space-for-earth” economy: goods or services produced in space for use on earth. This includes the launch of scientific observation hardware to better monitor climate change and predict catastrophic weather events, as well as internet satellites that provide low-cost connections to remote users.

Weinzierl acknowledges that private actors are of course motivated by profits, but adds that companies like SpaceX and Blue Origin “view themselves as providing public goods at some level,” like increasing the capacity for climate-change observation above the atmosphere. “Unfortunately, the part that you often see is the fun rides into space where it looks like they’re partying.”

Private actors in the space-for-earth economy are currently playing an important role on the world stage, following the Russian invasion of Ukraine. In late February, Ukrainian vice prime minister Mykhailo Fedorov sent a tweet to SpaceX’s Elon Musk requesting that he route internet satellites to spots in Ukraine experiencing broadband outages. Within 48 hours, Starlink, SpaceX’s internet satellite company, had sent some of its 1,500 active satellites to restore internet in parts of the country. “This is one kind of niche use case with a real impact,” Rosseau says. “We’re just scratching the surface, really just starting to discover what’s in the realm of the possible.”

Despite its many benefits, increased privatization comes with drawbacks. “When you have [space exploration] run through public sector agencies, whether civilian or military, because of their centralized control, there is a tremendous amount of risk management,” Weinzierl says. “As soon as you decentralize, you get lots of people involved with private capital doing their own thing, and you might worry that risk is going to find its way into the system in new ways.” Another active worry is that private companies might draw capital and talented personnel away from legacy, public space players. He adds, however, that in both cases, “I personally don’t feel like those risks are as high as some people are afraid of.”

Weinzierl does not pretend to have all the answers, given the rapid evolution of commercial ventures in space. He hopes instead that his HBS course will prompt students to ask the right questions. “Everyone outside the space sector assumes that people inside it have a great answer to the question, ‘What’s next?’” he says. But “nobody really knows. Will commercial space stations become a vibrant commercial sector? Will there be space tourism? Nobody really knows if any of those are going to take off.”

Nevertheless, by providing students with “a foothold of understanding” in the space industry, he hopes they’ll be equipped to find answers to their own questions about the economic “final frontier.” Weinzierl believes that, more than ever, the space industry needs businesspeople, not just astrophysicists. As the industry becomes “more commercial, more companies need people who can run the business and think strategically” about where the business is headed, he says. “There really is, I think, more room for M.B.A.s and eventually, for everyone essentially, to participate in the sector in a way that wasn’t true before.”

Read more articles by: Nancy Walecki

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