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A Special Note To Listeners: There was a streaming glitch for the approximately 11 minutes before listener emails reported the problem. I restarted the streaming servers and picked up the interview where we left off. For the archives, I stripped in a backup recording of those first 11 minutes from an SD chip that records separate from the servers. While the audio was not as good as the main program audio, all of the program is available as nothing was lost. I apologize for the glitch and for the need to go to one of the backup recordings but on the positive side nothing was lost. I recorded a short message that plays before the program starts explaining the problem and the poor quality audio for the first approximate 11 minutes.
Guest: Dr. Keith Crane; Topics: The value and evaluation process of the commercial space industry, humans to Mars economic evaluation and TRL, the IDA research and more.
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We welcomed Dr. Keith Crane of the Institute for Defense Analysis to the program to discuss their space economic analysis reports including "Measuring the Space Economy: Estimating the Value of Economic Activities in and for Space and then later in the program, the IDA report Mars, "Evaluation of a Human Mission to Mars by 2033." You can download and read these reports plus their other economic and space reports at www.ida.org/ida-ffrdcs/science-and-technology-policy-institute/space-portfolio. We started the discussion with a focus on efforts to measure the value of the space industry.
Dr. Crane provided us with a brief introduction to the IDA explaining its role in government, function, how their reports are created plus how they get funding to produce their reports. After the introduction we turned to the first report study which addressed focusing on the value of the space economy. A significant part of our discussion dealt with a comparison of how they did their report as compared to the large investment banks putting out trillion dollar economic reports along with they the IDA felt they needed to put forth a more realistic and grounded economic analysis of the space industry. Dr. Crane said that they felt these popular evaluations were overly optimistic, could possibly lead to credibility issues with the commercial space market which he then said would be bad for future commercial space policy, investment, and development. He explained why their space market evaluation was often less than half of what the financial industry reports suggested plus he explained the reason for the differences. The commercial reports were presented in the paper and compared using a bar graph on page 10. The specific URL for this 61 page report is https://www.ida.org/-/media/feature/publications/m/me/measuring-the-space-economy-estimating-the-value-of-economic-activities-in-and-for-space/d-10814.ashx. As we continued to discuss this report and space industry economic analysis with our economist guest, we covered multiple topics with both callers and listener emails. For example, our guest provided three reasons for the discrepancy with their report and those by the big investment banks and financial institution. What do you think? How about a post reflecting your thoughts on the blog?
Keith was asked for a space economy breakdown for segments. To see the industry segments, I suggested one look over the Table of Contents in the report but our guest highlighted a few of the key market segments. Examples were GPS, agriculture (sparked by a call from Marshall) plus others so be sure to hear all of this discussion.
We jumped around a bit regarding topics so suddenly we were discussing humans to Mars and their Mars report, "Evaluation of a Human Mission to Mars by 2033." The specific URL for their Mars report has been posted on the blog but you can find it here: www.ida.org/-/media/feature/publications/e/ev/evaluation-of-a-human-mission-to-mars-by-2033/d-10510.ashx?la=en&hash=6B4FB26A6586D6E592071BED7AC5F7EF. Our guest said NASA ordered the Mars report but it was requested by Congress. He explained this relationship plus the process. For Mars, they concluded that a mission was not doable on anything like the timetable being suggested but possibly later, maybe 2037-39. He explained the why of this conclusion. He also said this was for a government mission with a Gateway, SLS and such. When he was pressed to comment on the Musk plans for Mars, he said one would have to wait and see if he could do anything faster but he was skeptical. Don't miss all of what he said on this subject. He did have much to say even about the non-government players.
Our guest was asked about Russian and Chinese programs and economics. When asked if there were economic benefits for humans to Mars, he said he did not see any. Listen to what he said were the viable reasons for our going to Mars with humans. Keith was then asked about space settlement. In responding, he talked about Antarctica and thought the Moon-Mars situation might develop and settle along those lines. I challenged him on this by brining up the Moon Treaty and the Law of the Sea treaty. This conversation sparked a note from Randy inquiring about regulatory concerns showing up in their analysis plus how they might have measured a political impact given this is an election year. Don't miss what our guest said on these topics. More later on Antarctica and that type of model for settlement.
Marshall called wanting to talk about space and agriculture, China and Russia. Another listener brought up other organization space economic reports, wanting to know what he thought on those. Our listener was talking about the OECD and The Space Foundation space industry and market reports. Marshall was still on the phone and got in an inquiry about GPS evaluation plus the components of GPS and how they figured into total market evaluation. Listen to what Keith said as this was reflective of how they do their economic analysis reports, specifically for space but for other areas as well.
Keith continued the discussion on the Moon and Mars, economic development, the Antarctica model and more. Keith then introduced us to economic demand by talking about final demand versus derived demand. He provided examples which helped us to understand the different types of demand. He mentioned that ISRU was drive demand. He also defined demand in the context of government and the private sector. Once again the Antarctica model came up.
Ft. Worth John called to ask if Keith supported the information that there was a huge GDP multiplier for the economy through space investment and development as has been reported for the Apollo program. Keith had much to say about this, was not very supportive of the multiplier idea and at one point called it "Pixie Dust!" Pixie Dust went the distance during the balance of the program and will likely be a term I use in space discussions on later Space Show program. I like it. John and Keith continued their discussion on additional topics. Listeners, guess what? No Tic Tac or UFO discussion was introduced by Ft. Worth John on this program or during this call. What, no Pixie Dust?
Bill called from Raleigh to talk Mars specific risk factors, TRLs, and how such things got evaluated in their report. Listen to what our guest said about this issues plus their use of experts on many questions like this. After Bill's discussion, I introduced a new topic, one that will be very familiar with frequent Space Show listeners. I asked our a guest, an actual real economist, for his thoughts on how our rising national debt, artificial near zero interest rates, out of control spending might all impact space, public and private and if so, when.
Keith did take the time to address the spending and national debt issue in the context of space policy, the Moon, Mars, NASA budgets and more. Regarding our national debt, our unfunded debt, politically low interest rates and drawing upon my dated economic education regarding the government crowding out theory, Keith had quite a lot to offer us. I don't want to spoil it for you so listen carefully to what he said. I will give you a bit of a hint to his professional and "gut" hunches and that is it will have an impact but there were qualifications to that impact, timeline issues, plus outcomes riding on how congress decides to spend money. He did say he thought the NASA budget would be limited but again, listen up to hear all of what he said on this question. As for my rants on this subject being validated, well, I would say close in may ways but no bubble gum cigar (I don't smoke).
As part of the same discussion, Keith was asked specific questions about Artemis, wondering if returning to the Moon and eventually going to Mars would remain an administration priority given our economic issues plus an uncertain election outcome as of today. Everyone standby, this is all to be determined. As we were at the end of the program, Keith offered us a quick summary with a look at the BofA report for about a $27 trillion economy by 2045. He talked about breakthrough technology, our current low TRL, and the need for down to Earth gov. spending. Keith brought up SpaceX working to drive down costs and said that makes sense. Listen to what he said about that and how it might impact economic markets and our future space and economic policy. Just before we ended, an 11th hour email came in from Tim in Huntsville. I read his note on air which was a good question so listen to it because he said if space has a limited commercial value as suggested by these reports, then what was the motivation for common heritage of mankind policies. I added in making space a global commons plus I brought up the Moon Treaty, the Law of the Sea Treaty, state development and control of Antarctica and more. So if there is limited commercial value for the Moon, Mars, and space, why the big concern to make sure space exclusively for the common heritage or why must space be treated as a commons. Don't miss how Keith responded to this final question and this late new topic discussion.
Please post your comments/questions on the blog for this show. You can reach Dr. Keith Crane through me or the IDA website.