Incremental Growth in Space ( Cato speculate?)

>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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