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Space: Stimulating Economic Growth

Today and Tomorrow

253 Russell Senate Office Building

Washington, DC
July 27, 2009
Robert Dickman
Executive Director, AIAA
David Logsdon
Executive Director, Space Enterprise
Council/ Techamerica
Edward Morris
Executive Director of Strategic Business
Development, ITT Space Systems
John Porter
CEO, Astrogenetix
Saving lives on Earth
by developing products in space
Company Overview

• Subsidiary of Astrotech Corporation

(Nasdaq: ASTC)
• Astrotech (formerly SPACEHAB) has a
25 year heritage in space, sending
science and cargo to microgravity
• Astrogenetix is a biotechnology company engaged
in biomarker discovery and drug development
utilizing microgravity
ISS Utilization

• In 2005 Congress passed law designating a

portion of the International Space Station (ISS) as
a National lab
• Astrogenetix entered into Space Act Agreement
for use of the shuttle and ISS for its R&D activities
• Company’s activities have been designated
National Lab Pathfinder (NLP) missions by NASA
Vaccine Development

• Discovered increased microbial virulence in microgravity

• Applied knowledge to develop space flight platform for identifying
factors responsible for increased virulence
• This leads to viable targets for commercial vaccine development
• Speeds up development timeline
• Reduces cost for drug/vaccine development
Salmonella Development

• Salmonella vaccine target identified

– Plan to seek Institutional Review Board (IRB) and submit an
Investigational New Drug (IND) application to FDA
MRSA Development

• Methicillan-resistant Staphylococcus aureus (MRSA)

– Survey flight on Shuttle Discovery (STS-119)
– Additional research aboard Shuttle Atlantis (STS-125)
– Planned manifest aboard Shuttle Discovery (STS-128)
Pierre Chao
Managing Partner, Renaissance Strategic
Molly Macauley, Ph.D.
Senior Fellow and Director, Academic
Programs, Resources for the Future
Space and Economic Growth

Comments for “Space: Stimulating Economic

Growth Today and Tomorrow – Current and
Future Impact of Space Technology and

Senate Committee on Commerce, Science and


27 July 2009

Molly K. Macauley
Economic Growth
• Defined and measured as output per capita overtime
• Widely acknowledged as an imperfect definition and hard to measure
• Often incorrectly equated with ‘number of jobs’
– Example: Increase jobs simply by replacing bulldozers with people and shovels but may
not contribute to economic growth
– Example: Increase ‘high-skilled’ jobs but usually implies loss of other jobs; ambiguous
outcome for growth
• As conventionally defined omits or only indirectly reflects value of:
– public goods (for example, national security, freedom of expression,
Yellowstone and other national parks, research and development)
– improvements or reductions in quality of public health and the environment
– value of many benefits commonly attributed to space activities (for example,
as given in forthcoming NRC “America’s Future in Space” study: new
knowledge, inspiration, ‘cultural enrichment,’ ‘strategic leadership’,
‘stewardship of earth’)
– Can tangle causality (growth may foster freedom of expression and vice
• In short, may underestimate or overestimate ‘quality of life’
Redefine economic growth as ‘productivity’
‘vitality of the economy’
• Easier to discuss what influences economic vitality
• Influenced markedly by
– Technological progress
• Defined as resulting from something in-between (Mokyr, 2005)
(a) unexplainable (even ‘miraculous’) and
(b) the ‘rational and purposeful application of R&D’ and ‘growth of
complementary human and physical capital’
• Further defined as knowledge
– Institutions and governance (domestic and other countries’ markets,
competition, cooperation; international trade; and restraints on
– Information (information itself, and the free flow of information)
Previous studies of the contribution of
space activities to economic growth
• Summaries and references in: Reinventing NASA (CBO, 1994),
Encouraging Private Investment in Space Activities (CBO,1991),
The NASA Program in the 1990s and Beyond (CBO,1988), How
Federal Spending for Infrastructure and Other Public
Investments Affects the Economy (CBO,1991)
• Reinventing NASA (1994)
– Management and procurement reform, new relationships
with the private sector, intragovernmental coordination
and international cooperation
– The ‘breaking bow wave’ of an inadequate NASA budget
for the coming decade
– Acknowledging different perspectives on the benefit of
people in space
– The problem of cost overruns
Reinventing NASA (CBO,1994)
• Findings related to short- and long-run economic growth
– “NASA’s spending does not have a uniquely large short-term effect on the US
economy; all federal spending for goods and services tends to stimulate the
economy temporarily, increasing growth and employment for a short time
(unless at full employment)”
– “Under certain conditions, NASA’s expenditures could have a slightly larger or
smaller short-run effect on the growth of the economy and on employment
compared with federal spending overall
• Slightly larger - although still temporary - if concentrated in industrial
sectors or regions with high unemployment
• Slightly smaller - and still temporary - if in industries with high value
added per worker
• On balance, nothing suggests that unique aspects of NASA’s spending
cause it to affect the economy differently from other types of federal
spending for goods and services”
– ‘Multiplier’ effects (returns to the economy for every $1 spent) incorrectly
model diffusion of NASA spending to be like that of R&D in health and
– ‘Spinoffs’ are a problematic measure because an alternative may have been
devised, possibly at lower cost and sooner
– Not in the report, but additionally: Counting on spinoffs to justify investment
is not a sound approach; can justify pretty much any investment on such a
Economic vitality: role of competition
• Significantly less domestic competition within traditional aerospace industry
– Restricts government’s choices; few alternatives if government is not satisfied; limits
government’s ability to reduce cost
– May lessen creativity and innovation that contribute to economic growth
• Yes, if traditional industry prefers status quo and uses ‘rent-seeking’ (redistributes wealth
rather than creates it)
• No, if healthy internal corporate R&D budget and ability to ‘appropriate’ return on a new idea
(therefore, have incentive to come up with a new idea)
• Increase in opportunities from new people and ideas, outside of traditional
– Return to Lindbergh/Goddard era of risk taking, private wealth
• Response by government and traditional sector?
– History of technological progress emphasizes that “protection of innovators and
entrepreneurs… [is] of central importance …” (Mokyr, 2005)
– Some suggest NIH-like centers of excellence (see Major General James Armor,
comments at “A Day Without Space,” 16 Oct 2008)
– Some suggest ARPA-S (forthcoming NRC report) – sort of “back to the future” since
part of DoD’s ARPA in 1958 was transferred to NASA in 1960
Economic vitality: role of
international ‘coopetition’*
• Fortune Magazine, 1990s “100 Things America Makes Best” –
communications satellites
• Now, “Buy America” advantages are much less clear for a host
of space activities
• “Not made here” gives us more choice (consumers of space
services benefit from international competition)
• What are ‘appropriate opportunities for international
collaboration’ (charge to the Augustine II panel)
• …..And what are not – competition can be a very very good
• Some guidelines
– “absolute advantage” and “comparative advantage”
– “coopetition” – blending cooperation and competition as in
practices of multinational corporations
* Luo, 2004
Economic vitality:
role of information and
information infrastructure
An illustration at the intersection of the
Administration’s objectives for reshaping the nation’s
energy markets and climate policy
Role of Earth observations data and ongoing R&D for how best to use
– Renewable energy: in mapping and managing renewable energy
resources (see CCSP, 2008)
– New roles for agencies: in supporting regulatory and statutory
responsibilities (see Energy Independence and Security Act of 2007,
Section 712)
– Informing climate policy and leveraging emerging (Europe) and
possible (US, other) related markets (see H.R. 2454, The American
Clean Energy and Security Act of 2009)
Two examples: GHG trading and offsets
Example 2:
“offsets” and forest carbon

• Above-ground carbon
– Tropical forests: 300 billion tons
– Old-growth forests: 0.3 to 0.5 billion tons
– Back-of-the envelope: about $44 billion (with CO2 trading
at $110/ton, 2008, European Climate Exchange)
• Information leverages dollars. Earth observations
data are essential to inform carbon measurement
and markets.

• From Sedjo, 2009. Note: Emergence of a forest-carbon market would

change the supply of carbon credits and in turn influence carbon prices
Summing up
• Conventional definitions of economic growth are widely
agreed to be imperfect
– Space activities and many other activities may not
contribute to economic growth as formally defined
– … or, they may not make an easily discernible contribution
to it
– … but the activities may be worth doing
• Economic vitality and productivity are a more useful means of
expressing benefits and valued results
– Then: we can frame decisions around, and even measure
• technological progress,
• institutions and governance, and
• information to better insure that we contribute to
• In promoting long-term economic vitality, how we carry out
space activities is almost as important as what we do
• Cookson, Clive. 2009. “NASA Dominates as Rivals Play Catch-Up,” Financial Times 16 July.
• “A Day Without Space: Economic and National Security Ramifications,” US Chamber of Commerce and
George C. Marshall Institute, 16 October 2008, at
• Luo, Yadong. 2004. Coopetition in International Business (Copenhagen, Denmark: Copenhagen Business
School Press).
• Mokyr, Joel. 2005 “Long-Term Economic Growth and the History of Technology,” Chapter 17 in Handbook
of Economic Growth, Vol. 1B, Philippe Aghion and Steven N. Durlauf, eds. (Elsevier).
• National Research Council. Forthcoming. America’s Future in Space: Aligning the Civil Space Program with
National Needs (Washington, DC: National Academies Press)
• No author. 2001. “US Industry Consolidation: A Work in Progress,” Aviation Week and Space Technology 3
December 2001, pp. 50-51.
• Sedjo, Roger. 2008. “Avoided Deforestation: How costly? How Powerful a Tool?” Draft working paper,
Washington, DC: Resources for the Future, 16 April.
• US Climate Change Science Program (CCSP). 2008. Uses and Limitations of Observations, Data, Forecasts,
and Other Projections in Decision Support for Selected Sectors and Regions, Synthesis and Assessment
Product 5.1 at
• US Congressional Budget Office. 1994. Reinventing NASA: A CBO Study (Washington, DC: Congressional
Budget Office), March.
• US Environmental Protection Agency, 2009. “EPA Analysis of the American Clean Energy and Security Act
of 2009 H.R. 2454 in the 111th Congress,” 23 June at
Patrick Liu
Market Analyst, AIAA
Space & Technologies
 A space program has always been originated
and funded from a national level
 Space endeavor too large to be handled by the private
sector: financial commitment, technical disciplines involved
 Materials (composites, alloys, metals)
 Hardware and software
 Automation and robotics
 Electronics, sensors and optics
 Communications
 Power and energy devices
 Investment cycles longer than most private investors would
tolerate: human capital, expertise & infrastructure
 Intangible benefits: inspiring, and pride

Space Technology Characteristics
 Space research has focused on developing
and perfecting technologies and processes to
unprecedented levels, characterized by:
 Low weight
 Strength and durability
 Efficiency and reliability
 Compactness
 Temperature resistance
 Radiation resistance
 Corrosion resistance

Space Technologies in Our Life

 TV Satellite Dish
 Medical Imaging
 Ear Thermometer
 Scratch-resistant Lenses
 Firefighter Equipment
 Aircraft Ice Protection
 Smoke Detector
 Laser Eye Surgery
Equipment  Memory Foam

Courtesy to NASA
AIAA Emerging Space Technologies
AIAA’s Emerging Technology Committee issued the
10-hot technologies for future aerospace
 Advanced Materials, such as nanotechnology and composites
used in space flight
 Remote Sensing Technology, including UAVs and Satellites in
 UAVs outfitted with special sensors to help scientists collect data,
predict hurricane's intensity, track fast Arctic summer ice will melt,
 Advanced Space Propulsion Technology, including plasma-based
 Commercially useful for boosting communication satellites and
other Earth-orbiting spacecraft to higher orbits, retrieving and
servicing spacecraft in high orbits around the Earth, and boosting
high-payload robotic spacecraft on very fast missions to other

Technology Spin-offs at ESA & JAXA

 European Space Agency (ESA)

 “Technology Transfer Programme Office”
 Successfully transferred over 200 technologies to private sector
 ESA Business Incubation
 Help start-up business to utilize space technology
 Provide funds and business development
 Bring in private investors

 Japan Aerospace Exploration Agency (JAXA)

 “Industrial Collaboration Department”
 Work closely with Japan’s advanced commercial industry to
transfer technologies from space researches

What we see at AIAA
 Space related technical papers
 Professional members
 domestic vs. int’l
 Aging domestic membership
 Engineers in the “pipeline”
 Space programs
 Fundamental researches
 Very long lead time

Douglas Comstock
Director, Innovative Partnerships Program,
Stimulating Economic Growth Today and Tomorrow

Doug Comstock
Director, Innovative Partnerships Program - NASA

U.S. Senate Committee on Commerce, Science, and Transportation

Hearing Room 253, Russell Senate Office Building
Washington, D.C.
How Does Space Stimulate Economic Growth?

• Activity directly related to space products and services.

• Satellites, launch vehicles, ground systems.

• $257 billion in 2008.

• New capabilities, businesses, products and services derived

from space technologies.
• Spinoffs from the space program.

• More than 1,700 documented from NASA alone.

• Productivity enhancements and quality of life improvements

from the above, such as:
• Efficient tracking and positioning using GPS.

• Improved health from telemedicine, enriched baby food and

other medical advancing spinoffs.
Global Space Activity


160 $257 Billion in

Space Activity
Globally in 2008
$ Billions




Commercial Services and Infrastructure

U.S. Gov't Space Budgets
20 International Government Space Budgets

0 Infrastructure Support Industries

2005 Space Commercial Transportation Services


From the Space Report 2009, Space Foundation

Public-Private Partnerships

• NASA is looking for public-private partnerships in

many areas that are Win-Win-Win.
• Private sector gains by having access to Government
IP, facilities, expertise, resources, etc.
• Government gains by having access to private sector
expertise, resources, innovation, etc.
• Taxpayer gains by leveraging tax dollars and getting
improved government systems/services.
• Traditional roles between Government and private
sector are beginning to shift.
• Private sector role as partner rather than contractor.

• Government purchase of services instead of

• Creating broader opportunities for innovation.
What Can NASA and IPP Provide?
• Funding or Leveraged Resources.
• NASA SBIR/STTR, over $100 million annually, funds
several hundred small businesses.
• IPP Seed Fund partnerships leverage resources with
private sector, academia, and Federal labs.
• Centennial Challenges offers millions in purses.
• Expertise, Technology, and Software.
• Access through licensing and partnerships.
• Facilities and Test Capabilities.
• Access to NASA’s facilities through partnerships.
• Technology demonstration opportunities – FAST.
• Facilitation to enable partnerships.
• Advocacy as a change agent to try new things
“My dream is that one day any American will be able
to launch into space and see the magnificence of our
home planet as I have been blessed to do.”
NASA Administrator Charles Bolden, from remarks
at the National Air and Space Museum on Monday,
July 20, 2009.
NASA Spinoffs Benefit Everyday Life
• NASA has a long history of transferring space and aeronautics technologies for
public benefit.
• NASA’s direction to do this traces to the Space Act that created NASA in 1958:
“The Congress hereby declares that it is the policy of the United States that activities
in space should be devoted to peaceful purposes for the benefit of all mankind.”
• The Act goes on to say that NASA should:
“Provide for the widest practicable and appropriate dissemination of information
concerning its activities and the results thereof.”

Applications of NASA- Public Benefits of NASA-

Derived Technology Derived Technology

 Health and Medicine  Economic Growth

 Transportation • New Jobs
• New Markets
 Public Safety
• Increased Efficiency
 Consumer, Home & • Improved Competitiveness
Recreation  Quality of Life
 Environmental and • Improved Safety
Agricultural Resources • New Products
• Lives Saved or Extended
 Computer Technology
• Green Technologies
 Industrial Productivity • Environmental Cleanup
NASA @ Home & NASA City
Historical Views of Space Technology Benefits
“As we look to “What
the future, the impresses me
benefits that we about the
will have for program is the
example in sheer number
fields like health of spin-offs and
are simply their great
unimaginable.” variety.”

“I have to admire what “People are not

our efforts in space aware of the
have produced. Better enormous tech-
tools for heart surgery, nological achieve-
improved techniques ments that directly
for fighting cancer and benefit and will
many more achieve- continue to benefit
ments which can help all of us, not only in
all of us live longer .” this country but all
over the world.”
Legacy of Economic Benefit

• “The Apollo program itself produced technologies that have

• improved kidney dialysis and water purification systems;

• sensors to test for hazardous gasses;

• energy-saving building materials;

• and fire-resistant fabrics used by firefighters and soldiers.

• And, more broadly, the enormous investment of that era – in

science and technology, in education and research funding –
produced a great outpouring of curiosity and creativity, the
benefits of which have been incalculable.”

Remarks of President Barack Obama – As Prepared for Delivery at the

National Academy of Sciences, Washington, DC, April 27, 2009
Innovative Partnerships Program

Matching Technology Needs with Technology Capabilities

Contributions to Sustainability

• Assistance to Developing • Use of Green Technologies

Countries – Aeronautics Technologies
– Clean Drinking Water – Green Buildings
– Improved Agriculture – Encouraging Green Technologies
– Telemedicine and wireless – Solar Power Applications
networks – Paint Stripping
– Improved Environmental – Global Research into Energy and
Decision Making the Environment at NASA (GREEN)

• Disaster Warning and • Environmental Cleanup

Relief – Groundwater Remediation
– Earthquake relief – Land Mine Cleanup
– Tsunami Warning – Landfill Cleanup
– Wildfire Response – Oil Spill Cleanup
– Hurricane Warning

NASA-derived technologies are saving lives and improving the

quality of life all over the globe.
NASA-Derived Technologies Contributing to
• Improving Operational Systems • Threat Detection
– Health & Performance Monitoring for Aviation – Detection/Warning of
Security Chem/Bio Attack
– Safe Composite Over-wrap Pressure Vessels – Hyperspectral Imaging for
– Fire-Protective Fabrics & Smoke Masks Counter-Terrorism
– Intumescent Materials – Anthrax Smoke Detectors
– Neutralizing Land Mines – Fiber Optic Chemical
– Secure Networks for First Responders and Agent Sensing
• Inspection Technologies • Identification &
• Crack Detection in Nuclear Power Investigation
Systems • Pattern Recognition for
• Hyperspectral Imaging for Food Security Applications
Safety • Video Enhancement
• Inspection of Suspicious Liquid/Solid Supporting Criminal
Substances Investigations

These examples represent how NASA-derived technologies are being

put to work and making the world a safer and more secure place.
Spinoff Database – How to Learn More
• Database of more than
1,700 documented Spinoffs
• Fully Searchable by
various fields
• Keyword(s)
• Year
• NASA Field Center
Outreach & Publications searchrecord
Electronics & Computers
Semiconductors & ICs
Information Sciences
Materials Software
Manufacturing & Prototyping
Machinery & Automation
Visit us at
Physical Sciences
Bio-Medical Test & Measurement
NASA @ Home & NASA City
National Aeronautics and Space Administration