Space Industrial Base? The Answer is Right in Front of You, Mr. Secretary

At the recent Air Force Association’s annual symposium, Chief of Space Operations General Jay Raymond shifted his attention to the industrial base of the last 40 years, which has not kept pace with what he deems necessary to address the dynamic and amoral enemies we find ourselves at odds with yet again. In contrast to the old space community, that for years scratched its head at defense acquisitions, Gen. Raymond’s common sense solution seems to echo that of the new space community: “The big focus area for us this year, and for the next decade, is shifting our space architecture to a new, more resilient (hybrid) architecture by the design of the force.” To the commercial space community, those words are a welcome sign and open acknowledgement of the growing demand for next generation smallsat solutions.

It is surprising to some that America’s first chief of the Space Force, a leader with a career almost exclusively in space operations and with very little business or acquisitions experience, instinctively knows better than most what needs to be done to address this problem. Yet we, the next generation of companies that have built this new space economy, cannot help but agree with him. Gen. Raymond’s full-throated support of new space companies will help the Space Force meet mission needs faster, by fashioning more of our solutions from the commercial space industry.

Today’s commercial space companies are up to the task. Bold entrepreneurs and their private investor partners have built a highly skilled, competitive space industry that is now delivering breathtaking commercial capabilities. I had a chance to discuss with three of these industry captains from the SmallSat Alliance (an industry group that I chair) to understand their perspective for a robust U.S. space industrial base.

Marc Bell is the founder and CEO of TerranOrbital, headquartered in Boca Raton. Marc has been an investor and space leader for the last 10 years, quietly building three separate space companies then merging them in preparation for a NYSE listing later this month.

Coming off a big win as a supplier to Lockheed Martin building the Pentagon’s new communication system, he was explicit with me about what policymakers in Washington need to do – “Force the DoD and the IC to use U.S.-owned and operated companies, not divisions of foreign companies that have offices in the U.S.” Bell isn’t the only leader who feels that government policy and direction should be explicit about, “creating jobs here in America and bringing manufacturing back home.”

We did not heed that simple lesson many years ago in launch. Were it not for Elon Musk’s iconoclastic ambitions, our only option for mission capable launch would require Russian engines and engineers – decidedly not a position we want to be in today.

Dylan Taylor is the Chairman and CEO of Voyager Space, a multi-national space exploration firm that acquires and integrates leading space exploration enterprises globally, of which Nanoracks and Space Micro are notable subsidiaries. Before he entered the space world, first as an enthusiast and then as an angel investor, Dylan was known in the business community as the CEO of the real estate division of Colliers International, a NASDAQ-listed Canadian company.

Among many things, Dylan emphasized to me how valuable it is to share the truth of what is going on in the world and how commercial space companies can contribute in a unique way. For the first time in human history, citizens from around the entire world are able to see with their own eyes active war zones, like Ukraine, almost in real time as Putin’s atrocities are being committed. Dylan emphasized that, “the DoD has been leveraging commercial entities more and more, but further expansion of these practices and acquisition strategies is important.”

Dirk Wallinger, founder and CEO of York Space Systems began his 20-year career as a satellite design engineer. As a young engineering manager, he designed key systems of some of the classified billion-dollar satellites, or the proverbial school bus sized “big juicy targets” that the Pentagon now worries are too vulnerable for the new era.

Today, Dirk and his team build and operate satellites that are the size of a single bench seat inside that big school bus, but nearly as capable and about 1% of the price. Demand continues to be high, with the recent announcement of yet another expansion of York’s manufacturing space in Denver to address their increasing demand. In contrast to similar companies, York is forecasting “a third straight year of 300% annual revenue growth for 2022.” Wallinger also sees rewarding a strong domestic supply chain as crucial to ensuring the U.S. remains a leader in space. “We see a need to move towards the government demanding even faster delivery times and only paying the contractor after a satellite is delivered and working on orbit,” he says. “We are ready to deliver highly capable satellites in months now, unlike we did in the 90s, which took years. Today’s cost reimbursed contracts double the cost to the government, and the taxpayer, when compared to our commercial customers.”

I asked each of these commercial space leaders if they saw a limit to what their companies could achieve in support of national security needs. Although they all shied away from the question, a soft but unanimous “no” seemed to infer a humble belief that nearly every government space mission could be accomplished by acquiring products or services that are slightly modified versions of existing off-the-shelf, commercial items.

While the pace of investment and innovation is exploding in the space industry, progress is not sustainable without strategic direction and widespread adoption of commercial capabilities to meet government needs. In the State of the Space Industrial Base 2021, the Defense Innovation Unit describes the U.S. industrial base as “tactically strong but strategically fragile.” There is growing concern that we will miss out on the opportunity because U.S. space acquisition culture is the same as it was in the 1960s – slow to change and drowning in red tape. Air Force Chief of Staff General Charles Brown made the same observation about smaller space companies, “They’re all patriotic, and they want to work with us, but we can’t make it so hard.”

Our talented new arsenal of entrepreneurs and their private investor partners have built a competitive space industry that will buoy U.S. economic and national security interests at once. Each of these industry leaders (and a whole host of other companies in the wings) will rise to the challenge – they just need our government to streamline and flatten the armchair analysts, increase support of the next generation space companies, and win by delivering on orbit now, not in another 10 years. A market-based, Space Force endorsed, worldwide commercial space economy that provides products and services will encourage American new space ventures to become the mighty oaks of a new era.

The simple solution of speed and a reliable supply chain to address Gen. Raymond and Gen. Brown’s concerns about our space industrial base is remarkably simple: look ahead and not backwards. As Gen. Brown said when talking about this new industry, “It’s something we’ve got to really pay attention to. We do not want this to atrophy and then wish we had it at a later date.”