L5 News: Space Industrialization – A Three-Stage System

by Charles Sheffield

From L5 News, July 1981

With the successful launch and return of the Space Shuttle, it’s tempting to assume that space industrialization must be just around the corner. Before we take it for granted, we ought to look at some of the complications. None of them presents an impossible hurdle, but it’s good to hear them in mind when we set a schedule for the future.

Industrial operations in space will be like any other activity that depends on an advanced technology. They will evolve through three stages: projectionshake out, and consolidation.

Projection is the phase where government and industry may recognize the potential of some area, but the technological base to realize that potential has not yet been established. To take examples from the last century, we may point to Charles Babbage’s mechanical prototype of a digital computer, calling for construction techniques that were generations away in the future; or the transcontinental railroad, which called for many years of effort before it could be completed.

Shake-out comes when enough tools and techniques have been developed for the first commercial experiments to begin. In this period, some potential industries of high apparent promise are found to be non-competitive with existing systems, or to require technology which is still unavailable. At the same time, new areas that were never seen as having much industrial potential emerge as viable commercial activities. Here we might think of the automobile industry, which at one time had hundreds of companies. Competition reduced this gradually to the present handful. Another example would he the electric car, which was made back in the early 1900’s, but which has never been a commercial success because we still lack a lightweight and efficient electrical battery.

In the consolidation phase two things happen. First, a group of industries emerge that depend for their existence on the new industrial service. Second, these industries begin to serve each otherdirectly, rather than through intermediate technologies. In space, for example, consolidation implies a mature capability to transfer information, materials and products on a routine basis from one space location to another.

Not surprisingly, different commercial applications in space will reach these three stages at different times. We will look at some of the most important areas of space commercialization and industrialization, and see in which stage they now fall.


By 1945, the potential of a space-borne communications industry had already been suggested. In his famous paper in Wireless World, Arthur C. Clarke had described the way in which satellites in geosynchronous orbit could provide the base for an efficient worldwide communications network. Although the V-2 rocket had been developed in Germany, it lacked the power to launch to a geosynchronous orbit, so Clarke’s ideas could not be carried out. This was the projection phase — a phase where most specialists would have confidently asserted that the idea was, if feasible, at least a century away from commercial viability.

By 1960, the shake-out phase was ready to begin. At that time people foresaw applications ranging from replacement of voice-grade telephone lines and higher data rate television lines, on through the wrist-radios that received signals from orbiting transmitters, and on further yet to personal data links. During the 1960’s, the rapid evolution of the computer industry added the idea that rapid digital data transmission would be at least as important as the transfer of voice or video messages.

The shake-out phase hit its peak in the 1970’s. Communications satellites for telephone and television became routine and profitable; but the personal data links, calling as they do for larger antennas in orbit and for higher frequency transmission equipment, were postponed for another decade, until a suitable capability to place the needed equipment in geosynchronous orbit would be developed.

Meanwhile, the end of the 1970’s saw the arrival of the consolidation stage. Many industries now depend for their routine operations on a continuing ability to transmit information over domestic and international satellite channels. If we have yet to reach the point where communications satellites have a large direct influence on other space activities, it is only because the communications satellites came first, before other commercial activities. This will change in the 1980’s. The first example of the interdependency of’ the consolidation stage will be here in a couple of years, in the form of the Tracking and Data Relay Satellite System (TDRSS). This will, among other uses, serve as the satellite-to-ground data link for Earth resources data. It is a clear case where the commercial viability of a satellite Earth resources program begins to depend on a healthy and reliable communications satellite program. The same TDRSS will provide the data link for the Space Shuttle, so that many other space-borne experiments will depend on its successful performance.

Conclusion: The communications satellite program has entered the consolidation phase. It is the first such industrial activity to do so in space.


Although manned missions had provided irregular coverage of parts of the Earth’s surface since the early 1960’s, the first satellite dedicated to Earth resources was not launched until 1972. This satellite, ERTS-1 (later named Landsat-1) immediately began to return valuable data.

(Note: The weather satellite program, which began with TIROS-1 in 1960, has never been a candidate for commercial operation. It operates as a public service, and thus escapes analysis of the type presented here.)

It would be wrong to date 1972 as the end of the projection stage for Earth resources, however, since although the data have had commercial uses, there has been no shake-out phase. The main reason for this is that the system was termed an experimental rather than an operational program, and as such was heavily subsidized by the U.S. Government. It is not at all clear that a commercial Earth resources system, paying for both the satellites and the data distribution systems, could survive as a self-supporting operation. For this reason, it can only be judged as an activity in limbo, past the usual projection phase and short of the shake-out period.

The situation should change in 1984. In that year C.N.E.S. will launch the SPOT (Systeme Probatoire d’Observation de la Terre) Earth resources satellite, and the French intend that the system should be operational and self-supporting through the sale of Earth resources satellite data. During the 1980’s we may expect to see the launch of several competing systems by the U.S., French, Japanese and the European Space Agency. There will then be the market shake-out, as satellite systems become tuned to serve particular markets (such as geology, agriculture, forestry, and mapping).

The consolidation phase will probably not appear until the mid-90’s, even though certain industries are already using Earth resources data from satellites on a daily basis (without, however, bearing the true cost of either data acquisition in space, or processing on the ground). Another element of the consolidation process will appear earlier, when a Space Shuttle can achieve polar orbit and service and modify satellites in such orbits. This should be possible by about 1987.

Conclusion: The Earth resources satellite program should enter the shake-out phase in the mid-80’s, and the consolidation phase in the mid-90’s.


In lumping these activities together, I am guided by two factors: both depend on similar support activities, and both feed their products in similar ways to both Earth-based and space-based needs.

The area of materials processing in space, at least so far as the western world is concerned, began in embryo with the Skylab experiments. It will develop rapidly in the mid-1980’s with the availability of the Space Shuttles and Spacelab. It is still very unclear which area has the most promise — pharmaceuticals, cryogenics, micro-circuitry, and crystal manufacture have often been suggested.

This means we are still in the projection phase. No matter how we look at it, we will remain there until some experiment gives definite evidence that some process is cheaper and better (including all transportation and space facility rental costs) performed in space rather than on the ground. I expect that will take place in the mid-80’s. It will not, however, be the key development for space manufacturing.

That key development step will come when some other space-based activity calls for a component that can be manufactured as well or better in space rather than down on Earth. This is such a crucial point that is can’t be over-emphasized, since now the logic that penalizes a space-based manufacture is reversed. Instead of a space-manufactured product suffering the disadvantage that it must be delivered down to Earth, ground-based products have the disadvantage that they must be lifted up to orbit. If a space manufacturing or materials processing operation was marginally profitable for use down on Earth, it will become enormously profitable as soon as the products are used in space. Thus, although the shake-out stage may well be reached in the 1980’s, the consolidation phase has as its pacing item the development rate of other space-based activities.

We have implicitly assumed here that Earth-based raw materials will be used for the production. If we wish to consider off-Earth sources, the shake-out and consolidation phase are much farther away in time. The stages that must be gone through before such off-Earth supply is possible are as follows (and at first sight they are a daunting list):

a. An experimental program for lunar/asteroid resource evaluation, which must either be government-funded, or, in my opinion, a long way into the future. To be useful, this program must go far enough to provide mineral assays of specific lunar regions or specific asteroids. If the Moon is used as a resource supply, at least a dozen missions on the lunar surface will be needed, along with a Lunar Polar Orbiter mission.

b. A prototype program must be set up for resource extraction from off-Earth raw materials.

c. A transfer system must be set up for moving resource materials from their original locations to Earth orbit. (Note: In the event that raw materials are shipped to Earth orbit, steps b and c can be inverted; both are still necessary).

d. Programs must be set up for using the resources in specific (and profitable) space manufacturing/materials processing activities.

If we wish space to pay for itself, these steps must be finally supported from the sale of the resulting materials and products. It’s possible, but the financial in vestment will be huge, and returns should not be expected for a long time (perhaps 25 years).

Conclusion: Space manufacturing and materials processing using Earth-based materials should reach the shake-out stage during the 1980’s. Consolidation will arrive when other space-based activities make sufficient calls for materials and products that space can provide. The use of off-Earth resources for this purpose is farther off, probably at least a quarter of a century, unless a government undertakes to finance it for reasons of national well-being or prestige.


We are clearly in the projection phase. In the shake-out phase, the competition will come not from different varieties of solar power satellites, but from the alternative possible sources of energy. Clean fusion, for example, would have to be compared economically with solar power. It is worth noting that both solar satellite power and fusion power may in the years ahead suffer the fate of nuclear fission power. In the late 1940’s, nuclear fission was presented as an inexhaustible, clean, and inexpensive source of energy. As a technology becomes better understood, its potential problems also become more obvious.

Assume, however, that fusion does not offer a superior alternative for the 1990’s, and that no other energy source emerges as a clear favorite. In that case, solar power satellites will be a logical contender for development. To do that development, we must call upon a space-manufacturing capability that must have already reached its consolidation phase. This will be true regardless of the source of the raw materials. If we assume for the moment that we are dealing with an Earth-based source, then we depend on a space manufacturing industry that by the end of the 1980’s will, at best, be emerging from its shake-out phase, and probably still short of the consolidation phase.

That suggests solar power satellites are farther away than many people have suggested. However, the sequence of developments that must precede their construction applies only if we insist that the operation he self-supporting financially. If we regard the development of a solar power satellite as a high enough national priority that government funding should be employed (as it has been used in every other space development to date, from communications to Earth resources to lunar exploration), then the pace can be accelerated. Indeed, although there will still be significant technical constraints, as the Apollo Program proved, they can be circumvented if the need is great enough.

Conclusion: Solar power satellites are still in the projection stage. To move them rapidly beyond that stage, government initiatives are essential. The construction of a solar power satellite (even one of modest prototype proportions) calls for the space manufacturing program to reach its consolidation phase.

Without suitable government support, it is difficult to place any date on the arrival of the shake-out stage for solar power satellites. The consolidation stage is even less predictable.


You may feel the picture painted here is an excessively grim one. That often happens when we take a look at the economics and practical limits for developing a new technology. I prefer to take a more positive position. The analysis shows that a number of our most cherished space objectives are unlikely to be reached without a significant (and I’m talking many billions of dollars) boost from the government. Unpalatable as such a boost may seem to those of us who have a preference for doing all we can with the private enterprise approach, I don’t see any other alternative. We must have the tools, and developing those tools needed for long-term goals (such as space communities) will be a long, hard fight.

We should be prepared to present the case for space wherever we can, in Congress, in the Administration, and in the media. Before we will be believed, we have to know the facts, and we have to accept that some activities will have to wait until others — perhaps less interesting to us — are completed. Most of all, we must have the analysis to back our arguments.

Enthusiasm without knowledge is nothing. Above all else, the High Frontier is a High-Technology Frontier.

l5 news charles sheffield

Charles Sheffield is the past president of the American Astronautical Society, a member of the L-5 Society Board of Directors and vice president of Earth Satellite Corp. (Photo by Charles Divine.)