Quick: Name all of the areas where government outperforms the private sector where both options exist.
Pretty difficult, isn’t it? From schools to overnight delivery to cheese, the overwhelming and perhaps even categorical rule is that the private sector performs more effectively and efficiently wherever it competes with government.
Aerospace is no exception, as detailed by an impressive new report from the Center for a New American Security (CNAS) entitled “Capitalism in Space: Private Enterprise and Competition Reshape the Global Aerospace Launch Industry.”
The report first notes how increasingly critical a flourishing aerospace industry is for any nation hoping to prosper in today’s competitive global marketplace. That includes national defense, natural resource exploration, economic growth, experimentation and national prestige. Unfortunately, the report also highlights how U.S. government performance in this realm has declined:
All of these goals require a prosperous U.S. aerospace industry, which in turn requires above all a viable space-launch industry, capable of placing payloads, both unmanned and manned, into orbit cheaply and efficiently. Unfortunately, since the beginning of the 21st century the U.S. government has struggled to create and maintain a viable launch industry. Even as the government terminated the Space Shuttle program, with its ability to place and return humans and large cargoes to and from orbit, NASA’s many repeated efforts since the mid-1980s to generate a replacement have come up empty.
In addition, in the 1990s the Department of Defense instituted a new program, the Evolved Expendable Launch Vehicle (EELV), to guarantee itself launch services that – though successful in procuring those services – have done so at a very high cost, so high, in fact, that the expense now significantly limits the military’s future options for maintaining its access to, and assets in, space.”
But there’s positive news, according to the report. Private aerospace players like today’s SpaceX have succeeded at far less cost than the government spends:
Even as the federal government struggled with this problem, a fledgling crop of new American private launch companies have emerged in the past decade, funded initially by the vast profits produced by the newly born internet industry. These new companies have not been motivated by national prestige, military strength, or any of the traditional national political goals of the federal government. Instead, these private entities have been driven by profit, competition, and in some cases the ideas of the visionary individuals running the companies, resulting in some remarkable success, achieved with relatively little money and in an astonishingly short period of time.
Because of these differing approaches – the government on one hand and the private sector on the other – policymakers have an opportunity to compare both and use that knowledge to create the most successful American space effort possible.”
As just one example, the report notes the “significant cost discrepancy between the government-developed SLS/Orion system and commercially-developed systems, without any significant difference in capability.” The SLS/Orion is projected to cost $43 billion for two rockets, three test spacecraft, and three flight spacecraft over 15 years. By comparison, SpaceX development and operational contracts combined totaled less than $2 billion to achieve 13 launches to and from the International Space Station, as well as an orbital demonstration.
By leveraging the private sector and maintaining competition, the report concludes, America’s aerospace industry can continue to lead through the end of this century. That won’t surprise anyone familiar with the performance disparity between the private sector and government generally, but it’s an important new confirmation in this vital sphere that will only play an increasingly important role in our lives.
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