Space economy projected to reach $1.8 trillion by 2035

The global space economy is undergoing a significant structural shift, transitioning from a government-led prestige sector to a major pillar of the industrial economy. Goldman Sachs projects the industry will reach $1.8 trillion by 2035, driven by advancements in communications, defense, AI, and logistics. SpaceX CEO Elon Musk has commented that the actual scale of this boom will be ‘much bigger’ than these forecasts.

Growth is being fueled by a dramatic reduction in launch costs—falling from $65,400 per kilogram in 1981 to approximately $1,500 today via reusable rockets—and a surge in private investment. The sector attracted over $55 billion in 2025, with a record $36 billion invested in the first quarter of 2026 alone.

Defense spending is also a primary driver of demand. Geopolitical tensions have increased the importance of sovereign space capabilities, including Earth observation and secure communications. For example, Germany has committed €35 billion to space-related defense through 2030, and global defense tech startup funding has risen significantly compared to 2020 levels. However, the rapid expansion brings regulatory challenges, as multiple agencies in the US and internationally manage different aspects of mission approvals and orbital activities.