--- In spacesettlers@yahoogroups.com, Al Globus wrote:
>
> On Thursday, March 6, 2003, at 09:10 PM, jdr7181 wrote:
>
> > What other scientific disciplines will be
> > positively affected by the development of space?
>
> Astronomy, materials science, planetary science, Earth studies,
and
> others.
>
> > And how will
> > technological advances affect science in space?
>
> Enable a lot of stuff.

Ok, so I got you on at least one little fact: There is SOME potential
return on space-based R&D.

If that is the case, can that return possibly be the catalyst for
further growth in space?

In the other group, I asked these questions:

1. Have you ever heard of a company having success in an undeveloped
market?
2. Have you ever known such success to lead to greater competition?
3. Have you ever known competition to drive down cost?
4. Have you ever heard of increased competition and lower cost
encouraging market growth?

I answer yes to all four questions. And if you do, then . . .

1. Space-based R&D has an undeveloped market (there is a small market
for microgravity research).
2. Successes in space-based R&D (a new drug, for example) can promote
competition for access to the microgravity environment of space (I
also maintain there are several industries that have been identified
other than the pharmaceutical industry that could potentially benefit
considerably from access to a space-based lab - success in any one of
those industries could possibly bleed into one or more of the others).
3. Competition is likely to drive down cost.
4. The market for access to space is likely to grow.

As the market for space access grows, so likely is the need for space-
based support (infrastructure). Market growth feeds infrastructure
growth.

Am I completely off here? I don't know if I have explained it well,
but could someone please tell me where my logic is flawed here?
Thanks.

Jack

>As the market for space access grows, so likely is the need for space-based
>support (infrastructure). Market growth feeds infrastructure
>growth.
>
>Am I completely off here? I don't know if I have explained it well,
>but could someone please tell me where my logic is flawed here?

OK--I believe that in the commercial space market it's an oversimplification
to say that a growing market will inevitably and gradually lead to
infrastructure growth. This is because the basic units of growth are too
big for businesses and capital markets to swallow, given the nature of
business finance and profit expectations in the world today. An example:

A demand for overnight air freight in the US during the 1970s lead to the
rapid growth of FedEx and Airborne, and of UPSs expansion from ground only
to ground + air. The dramatic growth of this industry was possible because
the basic starting infrastructure--FedEx's small fleet of Econoline vans, 10
Dussault Falcons and a warehouse at the Memphis airport--cost little enough
that business financiers could imagine it turning profitable WITHIN A FEW
QUARTERS. Subsequent investment as the market grew was entirely scalable to
the need. Fred Smith borrowed several tens of millions, but he could do so
because he could demonstrate a small but growing cash flow almost
immediately. This model fits the business expectations of the capital
markets--predictable returns on a scalable initial investment, so that
investors could see some returns quickly, and competitors in the industry
that could grow easily with the market.

Space infrastructure requires a super-massive investment, a lengthy
timeline, and there's little evidence as yet that it could begin to pay off
(even a little bit) within a few quarters. No corporation now in existence
has the massive cash AND the patience to tie it up for 10-20 years before it
turns a dime's worth of profit.

Sure, Microsoft alone has over the course of its corporate life earned the
$50 billion of profits that could have been used to make that initial space
infrastructure investment, had it just had the vision. But now it is paying
dividends, like most of the Fortune 500 companies, so its owners now have
expectations for its cash. At this point MS could no more announce that it
was suspending dividends and putting every penny of profit for the next two
decades into a space launch project than it could announce it was going to
publish all its source code.

Here's where I think the hope lies--what costs the most in any space
infrastructure scheme? Launch costs, specifically launch costs PER POUND.
The two technological developments which I think will enable humanity's leap
into space are miniaturization and robotic mining and assembly. Mining the
asteroids with humans and human-sized equipment? Incredibly costly. BUT,
sending up enough nanobots to self-replicate, mine, smelt and manufacture a
habitat, an SPS satellite, an interstallar probe or whatever you want could
eventually be done with a single smallish launch.

The gigantic IF is, can we design and build nanobots with that much
capability? I think it will happen, because nanobots are an item with
plenty of market potential today. Other users will develop smarter nanobots
for earth-bound uses, then the space program will benefit. Then the biggest
thing we'll have to launch is ourselves, because all our needs will be
provided for by our tiny servants.

Until then, costs per pound are going to make commercial space ventures too
long-term and risky for the average US investor.

UNLESS, of course, all of us space visionaries save our nickels, pass on our
values to our kids, and in 50 years there are enough rich space-nuts out
there to finance a corporation with the patience to make that 20-year, no
guaranteed $100 billion gamble for the good of all.

Brad W.

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On Tuesday, March 18, 2003, at 06:44 PM, jdr7181 wrote:

> 1. Have you ever heard of a company having success in an undeveloped
> market?

Have you ever heard of a successful product where all deliveries to to
the factory cost $10,000/lb for shipping? Where commuting to work cost
$500,000,000 for seven workers for 7-10 days of work (ISS crew of 3
spends most of their time fixing the station)?

The International Space Station (ISS) most important legacy may be
jump-starting space tourism. Consider: the first space tourist, Dennis
Tito, was supposed to go to the Soviet era Mir space station. Under
pressure from NASA, Russia de-orbited the Mir which resulted in Mr.
Tito going to the ISS instead. Now the Mir was old, smelly, crowded and
probably not all that nice. The ISS was brand new, shinny, much more
roomy, etc. Mr. Tito came back to Earth with glowing accounts of how
great space is. Would his experience have been as good on Mir?

Al Globus
CSC at NASA Ames Research Center
http://www.nas.nasa.gov/~globus/home.html

Views expressed in this email are only my opinions and are not the
position of any organization I'm familiar with.