Evolution of the Korean Aerospace Industry in the Age of NewSpace

Jaeho Jung
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Jaeho Jung: Korea Institute for Industrial Economics and Trade

No 22/3, Research Papers from Korea Institute for Industrial Economics and Trade

Abstract: Since roughly 2015, the world has been witnessing the dawn of the age of “NewSpace,” with space now being explored by a new set of parties for a set of purposes distinct from those of the past. NewSpace is commonly used to refer to the private sector’s growing leadership in space exploration, replacing government initiatives and space endeavors — such as the Apollo program launched by U.S. federal government — with private enterprises developing products and services for consumers. NewSpace presents a host of new challenges and opportunities for related industries. First and foremost, the explosive growth of the number of satellites and launch vehicles (also known as launchers or rockets) sent into space is helping establish an economy of scale for the aerospace industry. Companies such as Space X and OneWeb are producing their own satellites to serve customers, while a slew of small and medium-sized enterprises and startups also continue to invest in space. Governments worldwide meanwhile have begun to expand their budgets to enable their industries to embrace NewSpace, with successful results. The Korean government too has begun to introduce policy support measures to facilitate the transition into NewSpace. These measures include the Space Development Promotion Act and the Small Satellite Development Roadmap. Korean aerospace, however, still remains by and large dependent on public procurement and contracting. This study explores and recommends policy changes necessary to encourage a successful industrial adaptation to NewSpace. These policies include measures for (1) creating economies of scale and setting competitive prices, (2) incrementally building a system of development and production led by the private sector, and (3) increasing public and government investment in enhancing the industry’s competitiveness.

Keywords: Space Exploration; Rockets; Satellite (search for similar items in EconPapers)
JEL-codes: L62 L64 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2022-02-28
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