On Thursday, South Korea's first independently developed space launch vehicle, Nuri, will take off.
This will allow the country to launch satellites weighing more than 1-and-a-half tons, which is expected to rapidly accelerate the development of the space industry.
The launch itself is historic, but industry watchers are also paying attention to the potential economic gains.
To talk more about the so-called space economy we have our Kim Sung-min in the studio.
Welcome back Sungmin.
Good to be with you Connyoung.
Sungmin, when we talk about space exploration, it's often about how advanced the technology is, and how far into the cosmos humans can go.
But aside from that, Nuri's success is expected to bring in more money. How much would that be and what's the reason for it?
Connyoung, Nuri's success is expected to generate an economic effect worth 2.5 billion U.S. dollars, and if we include the broader impacts that follow, that amount goes up to 14 billion.
Part of that is the ability to launch satellites more cheaply.
South Korea is expected to send up more than a hundred satellites in the next decade, and until now, each launch has cost hundreds of millions of dollars.
But because Nuri can carry satellites weighing more than 1-and-a-half tons, its success would mean that we can save a huge portion of those costs.
And whether it succeeds or not, it still presents a lot of opportunities for the industry to grow.
"It could lead to technological developments that can be used across industries and it could create jobs. Around 300 firms took part in Nuri, and we expect the project will lead to the subsequent growth of demand for space vehicles and satellites, which will lead to more economic effects.
Industry experts assume that this will encourage more businesses to enter the market, and accelerate the growth of commercial space flight a trend dubbed "New Space."
The commercialization of the space industry is fairly new because it's long been considered an area for governments. Tell us about that and the significance of "New Space".
You're right Connyoung.
In the old space era, it was largely govenments who led the development of the space industry, mainly because the R&D was way too expensive for private firms and there was a lack of policies to guide the industry.
"Until now, there have been difficulties stemming from a lack of stable policies. Also, the space industry in the past had very low profitability, making it hard for firms to step in."
But now, lower costs for launches and hardware have drawn in a number of companies who have started building economy around it,. and that's the basis for this "New Space" era.
In fact, commercial space activity has grown so much that it's surpassed government spending, and accounts for almost 80 percent of the total space economy.
Overall, in 2020, the global space economy has expanded to around 4-hundred-47 billion U.S. dollars, and this growth is expected to reach one trillion U.S. dollars by 2040.
By contrast, government spending on space worldwide fell last year by 1.2 percent on-year to 90 billion U.S. dollars, and that was mostly spent by the U.S.
That's fascinating. So with all the private companies like Space X and Blue Origin racing to take the lead in the space industry, what changes do we expect to see, and can we say that they are positive changes?
Yes. Experts say that the involvement of private firms has expanded the base of the industry, and has diversified the range of services that can be applied to many different sectors.
If you take a look at the graph here, you can see that most government-led efforts were of a public interest nature, like national security and basic science.
But in New Space, it's much more about pursuing private interests like space travel.
Space X successfully sent an all-civilian crew into Earth orbit last month, and similar efforts are underway by other companies like Boeing, Blue Origin and Virgin Galactic.
Axiom Space is also looking into building space infrastructure such as habitats, laboratories and factories, the success of which will make the industry more sustainable.
Experts also say there will ultimately be more cooperation between governments and the private sector.
"Even if the government leads these efforts, they need help from companies to secure hardware and parts. Also, the private sector can help lower costs and improve quality by leveraging economies of scale and competition. After all, there is a clear limit to the ability of governments to cover all the costs through their budgets."
"Having a business mindset is crucial to innovation in the industry because by nature a company will seek ways to its expand profits and market share around the world. So companies can make bigger and more efficient contributions in free market conditions."
Right. And because the industry is relatively new and has so much of potential, it seems like competition in this early stage is going to heat up. What can be done for South Korea to expand its position in the global space industry?
Connyoung, despite the rapid evolution of the commercial space sector, there's still an important role for governments in helping the industry get through its infancy.
That includes investing in the private space sector to encourage more innovation by small firms to help them grow.
Another aspect, experts say, is ensuring continued growth in public sector demand.
"When the private market is still young, the government has to create public demand, like with projects that use satellite information or footage for social purposes. Companies can use these projects to improve."
The expert also added that next is to create an environment conducive to business.
That includes building reliable space policies to make the industry sustainable so that companies can freely invest without having to worry too much about risk.
In the long term, it's also crucial to make continued efforts to foster a high-quality workforce.
Thank you Sung-min for your report today.