Private-Public Partnerships, NASA, and the Tipping Point of the Entrepreneurial Space Industry

February 6, 2017
Author
Kelsey Tollefson
February 6, 2017
Author
Kelsey Tollefson
Executive Editor
John Lenker

Throughout human history, governments have taken a lead role in funding projects before there’s a commercial market. It’s what governments should do—support the development of important ideas and technologiesin the absence of a profit motive, in order to promote common interests. When Congress established NASA in 1958, its goal was not to turn a profit—it was to push the boundaries of scientific knowledge and human exploration (and thereby one-up Sputnik). 

NASA has worked with commercial companies since the early days, when it negotiated cost-plus contracts with companies such as Boeing and Lockheed Martin in order to build the rockets designed by NASA engineers. While there has always been a strong commercial element in space, there’s a significant difference in the nature of today’s partnerships between NASA and private companies. 

Under new public-private partnerships (PPPs), NASA positions itself as the private company’s customer, rather than its benefactor. This fundamental shift in positioning has been instrumental in the development of the Entrepreneurial Space Age. As the space industry begins the year with its eyes on the prize (so to speak), PPPs will be crucial to further critical R&D and to facilitate practical implementation of emerging technologies. 

The space industry has a proven track record of public-private partnerships.

Image Credit: Sierra Nevada Corporation

Government agencies like NASA are eager to invest in the private space industry—not only to encourage growth, but also to ensure that they themselves have access to the most promising and innovative space technologies. These partnerships mean progress for all parties involved, and are key to the future of human space exploration.

C3PO—NASA’s tongue-in-cheek acronym for their Commercial Crew & Cargo Program Office—was formed to provide financial support for private-sector space companies, and is specifically geared towards the development of commercial space transportation technologies.1 Since the program entered phase one in 2010, NASA has invested hundreds of millions of dollars in privately-owned space ventures—many of which have gone on to become relative mainstays of the industry.2

In addition to the ubiquitous SpaceX, Sierra Nevada Corporation (SNC) is one commercial venture that has partnered with NASA’s Commercial Crew Development Program (CCDev). This program aims to develop a commercial network of crewed spacecraft, which would be used to transport astronauts—and potentially other customers—to the ISS or other space stations.3

In 2010, NASA invested $20M of seed funding in SNC’s prototypical “Dream Chaser” spacecraft through the CCDev. Over the following four years, SNC went on to received a total of $164.5M in additional funding, thanks to the program’s milestone awards.4 Seven years after NASA and Sierra Nevada Corporation teamed up, the “Dream Chaser” spaceplane is now preparing to undergo test flights at NASA’s Armstrong Flight Research Center. If tests are successful, Dream Chaser will be contracted by NASA to shuttle payloads to and from the ISS beginning in 2019.5

NASA’s interest in tipping-point technologies is great news for innovative space startups.  

Image credit: NASA & Boeing

NASA’s Space Technology Mission Directorate (STMD) is actively seeking tipping point technologies to facilitate commercial space transportation. Put simply, tipping point technologies are those that have valuable applications within the space industry, but which require additional development and funding in order to be successfully implemented.6

NASA's C3PO is offering fixed-price contracts to private space companies in order to ensure development of key technologies that will “foster the development of commercial space capabilities and benefit future NASA missions.”7 Milestone payments—granted in recognition of specific technical achievements—would increase the total potential funding the private venture could receive.8

Funding is given to applicants that demonstrate the ability to deliver on their plans for space exploration. Recent projects of interest to NASA range from the development of capable small vehicle launch technologies, to successful in-space missions using proprietary spacecraft.9

For space startups, partnerships like those offered by NASA’s commercial development programs can be the difference between successfully bringing their technology to market, and being unable to execute on big ideas. NASA’s financial investment will not only further both the agency’s and the startup’s goals—it will also further entrepreneurial space interests, and the space industry in a broader sense.

As space technologies reach a tipping point, so does the space industry as a whole. 

Image credit: NASA STMD

Public-private partnerships have proven to be an effective way of advancing both scientific research and commercial development. These partnerships have stimulated the space startup ecosystem and set the stage for further technological advancements. As the market for commercial space exploration has gained momentum, cooperation and competition between public and private interest has grown increasingly important to growth and long-term viability.

PPPs between the US government and private companies have formed a framework for partnerships between other space agencies across the globe. China’s government-run space agency, the National Space Administration, has made enormous strides in their space-faring capabilities over the past decade. And as the Chinese public-sector space program improves, privately-funded space startups begin to emerge as well.10

Take, for example, Landspace Technology. Founded in 2015 by members of China’s prestigious Tsinghua University, Landspace is a startup that aims to develop medium-scale launch vehicles that could be used for both crewed and uncrewed missions, such as microsatellite launches.11 In January of 2017, Landspace announced that they had partnered with fellow startup Gomspace, a Danish space company. Gomspace also has its roots in academia—in this case, Aalborg University. Landspace’s partnership with Gomspace represents the first-ever foreign commercial space contract awarded to a Chinese space company.12

Public-private partnerships will be crucial to continued advancement of the commercial space industry. 

As public interest swells, hopes for commercial space are running high. Propelled by significant industry successes and a demonstrable demand for their services, privately-owned space ventures are eager to develop their technologies. One of the most effective ways to both advance a technology’s R&D and demonstrate a product’s value to the commercial space industry is through a strategic public-private partnership.

As global leaders in space exploration, the United States is also home to a vast number of players in the entrepreneurial space arena. The proliferation of these startup ventures is due, in part, to the high level of investment in the commercial space industry by public-sector players, like NASA. The entrepreneurial space industry is currently in an exciting state of development: The incredible momentum; the wave of seemingly inevitable progress—we would not be in the position we are today were it not for the mutual cooperation between public- and private-sector space agencies. In order to carry this momentum into the future, cooperation between government-run space agencies and privately-owned space ventures is of paramount importance.

There’s never been a better time to get involved in commercial space. If you’re ready to start investing in private space companies, we invite you to apply for membership to Space Angels.

Bibliography

  1. Commercial Certification Process and Accomplishments. Nov. 2012. Presentation deck from NASA Advisory Council Meeting on November 15th, 2012. Retrievable here.
  2. ibid.
  3. Dunbar, Brian. "Commercial Crew and Cargo: CCDev Information." NASA.gov. National Aeronautics and Space Administration, 07 Mar. 2012. Web. 26 Jan. 2017.
  4. Messier, Doug. "Sierra Nevada Plans Additional Dream Chaser Flight Tests in Fall." Parabolic Arc. Parabolic Arc, 16 Apr. 14. Web. 03 Feb. 2017.
  5. Martin, Stephanie. "Dream Chaser Spacecraft Arrives at Armstrong." Commercial Crew Program Blog. National Aeronautics and Space Administration, 26 Jan. 2017. Web. 26 Jan. 2017.
  6. "Opportunities to Advance ‘Tipping Point’ Technologies." NASA.gov. National Aeronautics and Space Administration, 8 July 2016. Web. 26 Jan. 2017.
  7. NASA. NASA Announces Opportunities to Advance ‘Tipping Point’ and Emerging Space TechnologiesNASA.gov. National Aeronautics and Space Administration, 21 May 2015. Web. 3 Feb. 2017.
  8. United States. National Aeronautics and Space Administration. Space Technology Mission Directorate. Appendix to NASA Research Announcement (NRA): Space Technology - Research, Development, Demonstration, and Infusion 2016. NASA, 10 Aug. 2016. Web. 26 Jan. 2017.
  9. Commercial Certification Process and Accomplishments. Nov. 2012. Presentation deck from NASA Advisory Council Meeting on November 15th, 2012. Retrievable here.
  10. Patel, Neel V. "Who Will Run the Chinese SpaceX?" Inverse . Inverse.com, 17 May 2016. Web. 26 Jan. 2017.
  11. Lin, Jeffrey, and P.W. Singer. "Watch Out SpaceX: China's Space Start Up Industry Takes Flight." Popular Science. Bonnier Corporation, 22 Apr. 2016. Web. 26 Jan. 2017.
  12. Lin, Jeffrey, and P.W. Singer. "A private Chinese space company just scored a foreign contract for the first time." Popular Science. Bonnier Corporation, 23 Jan. 2017. Web. 26 Jan. 2017.
Click to Read More