UBS Projection of Space Economy Size

UBS analysts estimate that the global space economy’s total addressable market (TAM) could reach $1.3 trillion by 2040, representing an annualised growth rate of roughly 7%. A more optimistic scenario, assuming technology development stays on schedule, would push the market closer to $2 trillion, but the forecast was trimmed by one‑third to accommodate anticipated delays and technical hurdles.

Current Market Valuation and Segment Breakdown

According to data from the Satellite Industry Association, the narrower definition of the global space economy was valued at $429 billion in 2025, a 3% increase over the prior year. Within this, commercial satellites generated $303 billion, accounting for 71% of the total. The largest revenue segment is ground equipment, valued at $165.2 billion, followed by satellite services at $105 billion. Consumer applications—including satellite television, radio, and broadband—contributed $80.2 billion of service revenue.

Launch Cost Outlook

The cost of placing payloads into low‑Earth orbit is projected to fall below $250 per kilogram by 2040, compared with the current range of $1,500‑$2,000 per kilogram. Lower launch costs are expected to make satellite communications, Earth observation, space logistics and emerging applications more commercially viable. UBS notes that most incremental value is likely to arise from recurring space‑enabled services rather than from launch activity itself.

Defence Spending as a Growth Driver

National security budgets are a major catalyst. The proposed U.S. Space Force budget rises 30% to $49.6 billion for fiscal year 2027, earmarked for missile warning, satellite protection, secure communications and navigation. Germany has committed €35 billion to space assets by 2030, and NATO members collectively plan to increase broader defence and security expenditure through 2035.

Longer‑Term Opportunities and Risks

UBS highlights longer‑term opportunities such as private orbital stations, space‑based manufacturing, lunar infrastructure and orbital data centres. Many of these remain technically unproven and will require substantial external funding. Investment risks identified include launch failures, project delays, inconsistent cash flow, orbital congestion and regulatory uncertainty.

Venture Investment Activity

Venture capital investment in space‑technology companies reached $11.6 billion across 430 deals in 2026 through early July, already matching the total recorded for the entire year 2025.