A Place to Stand

This letter appears in today's Scotsman, edited out bits, basically all the technical stuff which I think is what makes the case irefutable are [] It also went out, without the reference to Bob's letter, to a lot of other papers. Google News shows it only in the Scotsman but a lot of letters don't register with Google News & I recently found some letters I had not known about had been in the Metro

The argument that space development has had a net cost or that the world's poor would be better off if we had given that money as "aid" to their governments (letter [Bob Taylor,] Thurs) is completely wrong.

Space development, [even run in the grossly bureaucratic method used by NASA (& even more ESA)] has been a massive net profit to humanity & nobody moreso than the world's poor. [In] improved weather forecasting alone [it has saved far more than it cost simply from knowing in advance where hurricanes are going to strike.] In the 3rd world this has saved literally millions of lives over the last 40 years. [On top of that we have a worldwide communications net through satellites - can anyone even imagine what the world would be like without that. In fact space related industry creates £160 billion a year of value directly. mainly telecommunications & satellite TV, which is 50% greater than the entire Scottish economy.]

The potential of space beyond that is, literally, infinite. [Solar power satellites can provide unlimited amounts of reliable, continuous power for the entire world. The amount of metals, from iron through to gold & platinum, available in asteroids is in the many trillions of tons. In a zero G environment, materials of different weights can easily mix & crystalline materials which would fracture in gravity are possible. What the qualities of such materials are we cannot know until they have been created but since they potentially exceed, by orders of magnitude, the total of materials creatable on Earth there are clearly going to be some spectacular ones. It is, metaphorically, raining soup & we are complaining about the cost of buckets. If we refuse this bounty the Chinese, Russians & Indians won't & good luck to them.]

What we should be doing, rather than putting money into sclerotic government bureaucracies is providing it to an X-Prize Foundation which would offer prizes, like the $10 milliion X-Prize that produced the first free market astronaut & kickstarted Virgin Galactic[.A prize of £500 million would produce a commercial reusable shuttle able to fly at least 3 times a month. That is less than Britain puts into ESA over 2 years & would therefore be ready & waiting when that new shuttle lands if we put up that prize tomorrow. It would only require a tiny amount of vision by our political leaders.]

Refs - $257 bn space industry http://nextbigfuture.com/2009/06/257-billion-spent-each-year-on-space.html$750 million for X-Prize shuttle http://a-place-to-stand.blogspot.com/search?q=x-prize

Labels: letters, X-Prizes

I just wrote on the growth of private enterprise space prizes (7.3 fold increase in 10 years = 22% annually). I also wrote on the fact that the world space industry (ok that is a contradiction in terms) amounts to $257 billion annually. The 3rd leg of this stool is how fast is it growing.

aggregate space sales of the companies surveyed increased 44% (10-15% annually) for the 2003-2006 period. Domestic non-defense sales grew 63%, primarily in the space services and ground equipment segments. Domestic defense sales grew by 29% - pdf p23

That 63% of non-defence sales amounts to an increase of 17.6% annually.

In Britain our space industry is growing at what the government clearly feel a very healthy rate:

The entire UK space sector currently contributes £6.5 billion to the UK economy, supporting around 68,000 direct and indirect jobs. The recession busting trends of the space industry has enabled it to successfully ride the downturn, and it is also predicted to grow by an average of 5% per year until 2020.

5% a year would mean our space industry would be worth £11.1 bn by 2020 whereas if we could just match the US rate it would be £38.7 bn, such is the spectacular effect of compound growth. If we could improve on the US rate by 10%, which should be fully achievable if we put in a proportionately substantially greater effort than the relatively little the US is doing, we would manage £95 billion ($156 bn) by then. This is more than half the entire current commercial space effort worldwide.

So what is required? We need space X-Prizes. The official primary remit of The British National Space Centre is to "win an increasing share of the global market in space systems, services and applications in the race to develop tomorrow's economy". This is an entirely market orientated requirement which would clearly be served by X-Prizes or other encouragement of commercial ventures & is negated by the fact that they actually just send their £275m annually to Europe where ESA will achieve virtually nothing with it. I have previously called for that money to be put into a British X-Prize Foundation & in light of yesterday's article about US private enterprise X-Prizes have devised this which involves a minimal amount of new government cash & a massive increase in investment.
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SPACE X-PRIZE FOUNDATION ACT

1 - Set up a British X-Prize Foundation, run by independent Commissioners appointed for expertise in science, engineering & venture capital not politics or civil service, to award prizes for space & in due course other technology achievement prizes. Also a Register of independent technology prizes, carrying out the functions of the Charity Commission for such prize funds, including ensuring the prize money is there.

2 - Government undertakes to provide the foundation with the £275 million currently given to ESA & to increase that proportionately to either twice the current rate of space industry growth or 10% more whichever is the lower.

3 - Government to allow tax rebates of 3 times the basic tax rate as Giftaid for donations to the Foundation or other science & technology prizes. This rate to be raised or lowered by not more than 5% annually to keep receipts paralleling those promised under section 2. Rebates to be by the Foundation & register issuing vouchers to be immediately honoured by in the simplest possible way to ensure every income tax payer can benefit.

4 - All Corporation Tax paid by space related sections sections of companies & 50% of income tax by employees in such sections tom be zero rated for a period of 25 years.

5 - The Foundation, with the full cooperation of the civil service to draft, at least annually, legislation to repeal or alter existing regulations which are economically damaging to space industry. Such legislation to be presented to Parliament unless the government finds them unreasonable & all reasons for finding them so, to be published.

6 - The foundation be allowed to announce prizes based on cash in hand & cash expected over the subsequent 5 years initially & 6 years after 1 years working. In the event of a shortfall, either due to several prizes being won very quickly or a downturn in the expected rate of growth, government shall guarantee loans on outstanding liabilities but no further prizes to be announced until the fund is back in surplus.

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I think that would do it.

The only immediate net cost to government is 2 of the 3 times normal income tax rates (the 1st is already refunded for all charitable donations. With income tax at 20% that is [£275m x 20% x 2 / 130%(from every £1.30 of taxes collectible only about £1 is not avoided or spent in the collection)] £85 m million. The £275m of direct payment under section 1 comes from money previously given to ESA. The reduced taxes under 4 would, under the Laffer curve, be expected to be at least matched by increased economic activity both in these companies & spin off activity. Note that because space is the same distance from all countries & involves no significant use of local natural resources it can move fairly easily to any country with an advanced education & technological infrastructure. That makes it particularly easy to attract via tax breaks.

The prize money investment would be [£275 x 2] £550 million in the first year. Assuming, conservatively that space industry growth continues at 5%, meaning the fund increases at 10% that would be £605m in the 1st year, & £665m, £732m, £805m &£886m subsequently totalling £4 billion ($6.6 bn). This would immediately fund Jerry Pournelle's proposal for a commercial orbital shuttle & for a commercial space station. If the rate of growth in space industry increased, as it could hardly fail to do, the fund allocation would increase which, together with each new year's allocation would see a fast, self financing, exponential growth in technology investment. For example if growth went up to the US level of 17.6% the allocation in the next 2 years would be £1.34 bn &£1.47 bn plus revaluation of the intervening years. Since this could only happen if there was a fast growth of the space economy following the introduction of this programme payments in subsequent years would be likely to be less than the increases to the Exchequer from economic progress.

What would be the total extra economic investment in the British economy from this programme? Well according to the article discussed yesterday "Since SpaceShipOne took the Ansari X PRIZE in 2004, public and private investors have spent more than $1.5 billion to develop this nascent industry" for a space X-Prize investment of $88 million. That is a ratio of 17:1. There may be other reasons for that much investment but it was done without the subsequent tax reduction in section 5 so it is not unreasonable to stand by that (indeed it would not be unreasonable to go beyond it but I won't). At that ratio we get British commercial investment of £68 billion, which is not a bad return for government spending of £85 million. While this could be opposed by Luddites opposed to any form of economic growth I don't think it could be sensibly opposed by anybody else, unless they could dispute the figures here by more than a hundredfold.
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Other countries - the figures here are scalable. Scotland at 8% of UK GNP could, for a similar level of effort, do this by putting up £22 million as equivalent to the ESA contribution & running the charitable refund through the rates system. 8& of $6.6 bn is $528 million which would just finance a commercial shuttle according to Pournelle's most recent figures. This also applies to any developed country & a lot of US states with GNP down to $213 billion annually which includes Hong Kong, Czech Republic (both 40) & Ireland (34). Singapore would have to make marginally more effort but, noting both their technophilia & equatorial location, can see them doing so.

Japan, Germany, China, France, Italy & probably Russia could match the full programme. The USA could do so with ease. Whether they have the gumption to do so is questionable but certainly somebody is going to. The future & untold wealth is out there for any country progressive enough to reach for it.

Labels: constitutional amendments, Fixing the economy, space, X-Prizes

Brian Wang at Next Big Future recently did this article on how much the world is spending on space. It comes to $257 billion (£160 billion) which came as a surprise to me.

Most of the money is spent on
- satellite TV ($70 billion)
- maintaining ground stations ($74 billion)
- $17 billion fixed satellite services
- $26 billion Department of Defence (military satellites and the spending around it)
- $17 billion NASA
- $10 billion national reconnaissance office (spy satellites and spending around it)
- $8.9 billion missile defense agency

The foreign government spending looks undercounted. It does not look like the foreign military or spy spending has been taken into account.

$5.6 billion on commercial satellite building
$2 billion on commercial launch systems That is 1 1/2 times Scotland's GNP. It also takes no account of secondary effects such as the fact that a 24 hour world financial market is only possible because of global telecommunications which means satellites. With world GNP about $70 trillion this comes to about 0.4% which, on the one hand isn't space shattering but on the other is significant. If space related industry were to expand by 20% a year (ambitious but not that ambitious since it is only twice what China is managing & China starts from thousands of years of development not 40) that would exceed the entire Earth's current GNP in 2050.

According to government programmes that is when we should have cut our CO2 release by 80% which gets us back to the level of CO2 production & probably comparable in industrial productivity to Victorian Britain.

I think that puts the options starkly.

Of course the real brake on space development is that we don't have a reliable & commercial way of getting there. We could develop one with a $1 bn X-Prize & with the amount already being earned that is not the sort of investment one puts into promoting new technologies. It isn't even the sort government puts into subsidising traditional business to locate here. Scottish Enterprise, the government department whose function is to encourage new business to locate in Scotland, has had a budget of £500 million so on that basis we should be putting about £800 million into X-Prizes to locate in space, ie £4 bn over 5 years. If that money had been put into such prizes we would have space industries far larger than this by now (& hence more money for investment in a virtuous circle). Meanwhile we spend billions on banks & windmills instead.

Labels: space, X-Prizes

Space Adventures planned Dubai spaceport

So how much do we spend there. Well I have previously written on space budgets in 2006. & then it came to America $16bn, Europe $8bn, Japan $1.6bn, Russia $900m, China $1bn = $27.5 bn. Lets add another 10& for the rest gets us to $30.25bn. Regrettably the wikipedia article I used has been rewritten & doesn't now contain world budget figures however if we add 14.5% (2 years at 7% growth & i recessionary 1 at zero) we get $34.6 bn which is as good as I expect to get.

There is the question of how much of that is spent usefully. Taking Russia's space effort as being run efficiently & also taking it as giving them a space capacity matching the US one we get the American, European & Japanese space programmes as being about 5% efficient at space work & 95% efficient at porkbarreling. Putting Russia equal to America be doing Russia a disservice since shortly the entire supplying of the International Space Station will be in Russian hands as the Shuttle retires but it does give you an idea of how inefficient Western socialism is compared to Russian & Chinese capitalism. Anyway that suggests the total the world is actually spending on space development is ($0.8 + 0.4 + 0.1 + 0.9 +12) X 1.1 X 1.145 = $4 billion. Admittedly this does not include military programmes but none of these are designed to enhance the power of any non-terrestrial state.

However that has missed out a major factor. Space industry already produces $257 of value annually. While world tax rates vary I think looking at rates around the world the minimum in the developed world would be 35%. This means space is paying $90 billion to government.

So despite all the anti-technology wingeing what "we are spending in space" amounts to an profit for politicians of £86 billion annually. So long as we are putting less than that into X-Prizes or some equally efficient way of encouraging progress there can not even be the possibility of truthful argument that we are spending to much on this (& not subsidising windmills enough).

Alternately any country that offers a generation long tax holiday to space developers is likely to do very well.

Labels: Government parasitism, space