Thursday, October 08, 2009
Virgin Galactic announced a $280-million investment in the company by Aabar, a sovereign wealth fund based in Abu Dhabi. The deal valued Virgin Galactic at about $875 million, an impressive amount for a company that has collected about $40 million in customer deposits to date.Now that is good news for the human race. People with real folding money think commercial space is worth investing in. Such financial maneuverings remind me of The Man Who Sold the Moon, a book which, 20 years ago, I & everybody else thought something Heinlein, as a libertarian had got wrong because space development could only be funded by government. In fact things are better than in that book because there are several different consortia working on this worldwide.
That an institutional investor—with shorter timescales and higher expectations for a return on investment than a typical angel investor—would invest in a suborbital spaceflight company is not necessarily the “Netscape moment” that many in the industry have been anticipating for years. However, it does suggest that the business plans by the companies in the field are becoming sharper and more attractive to investors whose primary interest is not in opening the space frontier but getting a good return on their money.
Note that we are seeing space development not merely being a non-government activity but a non-western one as well. It seems likely that in the near future Abu Dhabi, which like Singapore is building its own spaceport, is going to have greater access to space & thus potentially a greater influence on the future of humanity, than all the governments of Europe put together. This is a historic change signaling the end of western, let alone European world leadership.
The X-Prize has not done everything on a $10 m budget. It has certainly made things happen faster & more importantly provided an example. Virgin Galactic in this form exists because Rutan won the X-Prize. Without the prize he would certainly still have been interested in space but would, at the very least, have taken longer & had to spend more of his time to find backers.
I doubt if NASA would have offered a $1.5 bn outside contract to Musk for a resupply of the ISS but, reversing all previous practice, without the very good example of the X-Prize.
The Bigelow orbital prize has not succeeded but the prize for achieving orbit at 250 miles was $50 million. That wouldn't buy you a Renaissance painting & simply wasn't enough. A $1 billion prize would have worked.
Prizes work far better than normal government procurement methods. Here is the US army saying that by offering $3 million in prizes the achieved a target that "would otherwise have cost over $100 million".
Comparing like with like I suggest that had X-Prizes been available to match NASA's budget of $18bn a year the entire solar system could have been settled. There is no particular reason why that may not yet happen though the budget may come from Abu Dhabi rather than the USA or Europe.
All that is required is that there be X-Prizes in the billions rather than 10s of millions. There are enough billionaires wanting to create a legacy, let alone governments able to do it that it is close to certain that somebody or group will put up that much. The advantage to nations & indeed cultures that are the early developers of space cannot be underestimated. Elements of that advantage will last as long as the human race does.
Also mentioned by Jerry Pournelle