Download - Analysis of Competitive U.S. Commercial Human Orbital ... · PDF filesupply chain supporting commercial human orbital spaceflight. We utilize a multi ... Porter Diamond Components

1

ANANALYSISOFTHECOMPETITIVEADVANTAGEOFTHEUNITEDSTATESOFAMERICAINCOMMERCIALHUMANORBITAL

SPACEFLIGHTMARKETS

Preparedfor:TheFederalAviationAdministrationOfficeofCommercialSpaceTransport

By:FutronCorporation,BethesdaMaryland

GregAutry

LloydGreifCenterforEntrepreneurialStudies,UniversityofSouthernCalifornia

LauraHuangTheWhartonSchool,UniversityofPennsylvania

JeffFoust

FutronCorporation

The “Public/Private Human Access to Space” / Human OrbitalMarkets (HOM) study group of the International Academy ofAstronautics (IAA) has established a framework for theidentificationandanalysisofrelevantfactorsandstructuresthatsupport a global human orbital spaceflight market. The HOMstudy group has called for analysis at the national level to beincorporatedintheirglobalstudy.Thisreport,commissionedbytheFAAOfficeofCommercialSpaceTransport, provides a review of demonstrated and potentialHuman Orbital Markets and an analysis of the U.S. industrialsupply chain supporting commercial human orbital spaceflight.We utilize a multi‐method, holistic approach incorporatingprimarily qualitative methodologies that also incorporatesrelevant statisticaldata.Ourmethodologyparallels theNationalCompetitiveAdvantagediamondmodelpioneeredby economistMichaelPorter.The study reveals that while the U.S. currently possessessignificant competitive advantage in commercial human orbitalspaceflight, there are several areas of note that present achallengetothesustainabilityofthisadvantage.

2

INTRODUCTION........................................................................................................................................4

I.METHODOLOGYANDDATA..............................................................................................................5

II.NATIONALCOMPETITIVEADVANTAGE......................................................................................6

PORTERDIAMONDCOMPONENTS...............................................................................................................7FIRMSTRATEGY,STRUCTUREANDRIVALRY............................................................................................................7DEMANDCONDITIONS..................................................................................................................................................7FACTORCONDITIONS....................................................................................................................................................7RELATEDANDSUPPORTINGINDUSTRIES..................................................................................................................7PORTER’SSTAGES.........................................................................................................................................7FACTOR‐DRIVEN............................................................................................................................................................7INVESTMENT‐DRIVEN..................................................................................................................................................8INNOVATION‐DRIVEN...................................................................................................................................................8WEALTH‐DRIVENANDTHECURRENTU.S.STAGE..................................................................................................8LEVELSOFANALYSIS.....................................................................................................................................9CLUSTERDATAISSUES..............................................................................................................................................10

III.DEFINITIONOFPOTENTIALHUMANORBITALMARKETS..............................................11

EXISTINGMARKETSTUDIES.....................................................................................................................11HISTORYOFHUMANORBITALMARKETS................................................................................................12TOURISM......................................................................................................................................................................12U.S.DOMESTICCREWTRANSPORTATION.............................................................................................................13ASTRONAUTCORPSOFFOREIGNNATIONS............................................................................................................14RESEARCHANDDEVELOPMENT...............................................................................................................................14MEDIAANDPROMOTION...........................................................................................................................................14FUTUREMARKETS......................................................................................................................................................14OTHERMARKETS.......................................................................................................................................................15

IV.COMMERCIALU.S.HUMANORBITALINDUSTRIES.............................................................15

GOVERNMENTFUNDEDSPACEEFFORTS...............................................................................................................15COMMERCIALSPACEHISTORY.................................................................................................................................16

V.FACTORCONDITIONSANDTHESUPPLYCHAIN..................................................................16

RELEVANTU.S.ENDOWEDFACTORS.......................................................................................................16HUMANRESOURCES...................................................................................................................................................16KNOWLEDGERESOURCES.........................................................................................................................................18BASICEXTRACTIVERESOURCES..............................................................................................................................21CAPITALRESOURCES.................................................................................................................................................23INFRASTRUCTURE.......................................................................................................................................................24FACTORCREATIONANDIMPROVEMENTMECHANISMS......................................................................................25THEAEROSPACEANDHOMSUPPLYCHAIN............................................................................................25THECOMMERCIALHOMSUPPLYCHAIN...............................................................................................................27U.S.HOMSPACECRAFT............................................................................................................................................28U.S.HOMLAUNCHVEHICLES..................................................................................................................................29SIGNIFICANTSUB‐SYSTEMSANDASSEMBLIES......................................................................................................30

3

ROCKETMOTORS/ENGINES...................................................................................................................................30STRUCTURES...............................................................................................................................................................32SPACESPECIALTYINDUSTRIESGROUPING(SSIG)...............................................................................................32ELECTRONICSINDUSTRIESGROUPING(EIG)........................................................................................................33NAVIGATION,GUIDANCE,AVIONICS........................................................................................................................33PLUMBING....................................................................................................................................................................34POWER.........................................................................................................................................................................34SYSTEMSINTEGRATION.............................................................................................................................................34U.S.ORBITALDESTINATIONS...................................................................................................................................35FUELS............................................................................................................................................................................35

VI.RELATEDANDSUPPORTINGINDUSTRIES............................................................................37

MILITARYANDCOMMERCIALAEROSPACE...............................................................................................37GOVERNMENTALSPACEEXPLORATION...................................................................................................37AUTOMOBILE..............................................................................................................................................38PERSONALCOMPUTERANDINTERNET....................................................................................................38

VII.FIRMSTRUCTUREANDRIVALRY............................................................................................39

INDUSTRYGEOGRAPHICCLUSTERS..........................................................................................................40

VIII.CHANCEANDGOVERNMENT...................................................................................................41

IX.AREASOFCONCERN.......................................................................................................................41

CONCERNSRAISEDBYINTERVIEWEESORNOTEDDURINGANALYSIS...................................................41ITARANDTRADERESTRICTIONS...........................................................................................................................41SMALLSHOPSUPPLIERS............................................................................................................................................42SUPPLYOFSENIORAEROSPACEENGINEERS.........................................................................................................43SUPPLYOFSKILLEDPRODUCTIONWORKERS.......................................................................................................43U.S.MILITARYBUDGETCUTS..................................................................................................................................43INCONSISTENTGOVERNMENTSUPPORT................................................................................................................43GOVERNMENTALMARKETDISTORTIONSDISRUPTCLUSTERING......................................................................44CRITICALSUPPLYCHAINELEMENTSFROMCHINA..............................................................................................44SOLIDROCKETMOTORS............................................................................................................................................46RP‐1SUPPLYCHAIN..................................................................................................................................................47CONCERNSNOTEDBYOTHERSTUDIES....................................................................................................47

X.CONCLUSIONS...................................................................................................................................48

ACKNOWLEDGEMENTS.......................................................................................................................49

APPENDICES...........................................................................................................................................50

A.COMMONSPACEACRONYMS...............................................................................................................................50B:NOTEONCITINGOFE‐BOOKS.............................................................................................................................51

REFERENCES...........................................................................................................................................52

4

IntroductionTheInternationalAcademyofAstronautics(IAA)hasestablisheda“Public/PrivateHumanAccesstoSpace”studygroup,informallyreferredtoasthe“HumanOrbitalMarketstudygroup”orsimplythe“HOMstudygroup.”Thisgrouphasdevelopedaframeworkfortheidentificationandanalysisofrelevantfactorsandstructuresthatsupportaglobalhumanorbitalspaceflightmarket.Ithasalsocalledforindividualanalysistobeconductedatthenationallevelandincorporatedintheirglobaleffort.Thisreport,commissionedbytheFAAOfficeofCommercialSpaceTransport,fulfillsthatgoalbyprovidingareviewofdemonstratedandpotentialHumanOrbitalMarketsandananalysisoftheU.S.industrialsupplychainsupportingcommercialhumanorbitalspaceflight.Weutilizeamulti‐method,holisticapproachincorporatingprimarilyqualitativemethodologiesthatalsoincorporatesrelevantarchivalandstatisticaldata.OurmethodologyparallelstheNationalCompetitiveAdvantagediamondmodelpioneeredbyeconomistMichaelPorter.Thefirstchapteraddressesthestudy’smethodologyanddata.ThesecondchapterdetailsPorter’sapproachtotheanalysisofnationalcompetitiveadvantage.ThethirdchapterconsidersthevariouspotentialHOMmarketsavailabletocompetitorsinthenearfuture.ChapterfourprovidesareviewofthehistoricaldevelopmentandrelativepositionofU.S.commercialHOMindustries.ChapterfivepresentsananalysisofthesupplychainsupportingtheHOMindustries.ChaptersixconsiderstherelatedandsupportingindustriesthatbenefitfirmsintheHOM.Chapterseven

reviewsthestructureofHOMfirmsanddynamicsofcompetitionwithintheU.S.market.ChaptereightaddressesthesignificantexternalfactorsofchanceandgovernmentinregardstotheU.S.HOMindustrialbase.ChapterninereviewsandhighlightstheareasofconcernthatthisstudyandothershaveidentifiedaspossiblethreatstosustainedU.S.nationalcompetitiveadvantage.Chaptertenpresentsourconclusions.TheHOMstudygrouphasestablishedaframeworkfortheidentificationandanalysisoffactorsandstructuresthatsupportaglobalhumanorbitalspaceflightmarket.Thesefactorsarebroadlydefinedas:political,legal,capital,historicalandcultural.TheHOMstudygrouphascalledfordeeperanalysisatthenationallevelutilizingthefollowingfiveanalysisphases:1.Identifythespecifichumanorbitalspacemarketsbeingtargeted.2.Conductaliteraturereviewofrelevantreportsandarticles.3.Identifyrelevantpolitical,legal,capital,historicalandculturalfactorsandstructures.4.Identifythesetofindustriesthatcomprise,supportorarerelatedtotheidentifiedhumanorbitalspacemarkets.5.Qualitativelyevaluatethelikelihoodthattheseindustryclustersaresufficientfortheeventualnaturalevolutionofhumanorbitalspacemarkets.Whileaddressingallfivephases,thisstudyemphasizesphaseone(identifyingHOMs),andphasefour(identificationofsupportingandrelatedindustries).

5

I.MethodologyandDataThisstudyutilizesamulti‐method,holisticapproachconsistentwiththemodelpioneeredbyeconomistMichaelPorterknownasthenationalcompetitiveadvantagediamondframework.Qualitativedataweregatheredfrominterviewswithindustryparticipantsandsecondarysources.Quantitativedata,primarilycomparativeindustrystatistics,weregatheredfromsecondarysources.Thescopeofthisanalysiswasrestrictedtothe“Commercial”or“NewSpace”firmsengagedinpursuingacompetitive,fee‐for‐serviceHOM.WhiletheU.S.governmentremainsthelargestsingleconsumerofspaceproductsandservices(Harrison,2012)andwillsurelybeamajorcustomerofthesefirms,thisstudygenerallyeschewsprimaryeconomicactivityoccurringunderthecost‐plusaccountingmodelofthetraditional“military‐industrial‐complex”(MIC)aerospacemarket.Specifically,thisanalysisdoesnotsubstantiallyaddresstheroleoftheU.S.NationalSpaceAgency’s(NASA)SpaceLaunchSystem(SLS)developmentprojectintheHOM.Thefoundationalprimarydataforthisprojectwereinterviewsconductedon‐siteorbytelephonewithsupplychainmanagementatfinal,downstream,spacecraftandlaunchvehicleassemblersandoperators.These“TierOne”firmsincluded:OrbitalSciencesCorporation(Dulles,VA);SpaceExplorationTechnologies(Hawthorne,CA);UnitedLaunchAlliance(Centennial,CO)andSierraNevadaCorporation(Sparks,Nevada).AdditionalinterviewswerealsoconductedwithMichaelLopez‐Algeria,PresidentoftheCommercialSpaceflightFederation(Washington,DC),thenon‐

profitindustryassociationthatrepresentsNewSpacemanufacturersandoperators.1Lopez‐AlgeriaisaformerU.S.astronautwithsignificantflighttimeandastrongfamiliaritywithawidevarietyofspaceflightsystems.Follow‐updiscussionswereconductedviaemailandtelephonewitheachoftheparticipantsand/ortheirstaffonbothgeneralandspecifictopicsrelatedtothesupplychain.Theconclusionsofthisreportremainthoseofthestudy’sauthorsandnostatementfoundhereinshouldbeattributedtoanyindividualororganization.Participationinthisstudydoesnotconstituteanendorsementofthisstudynoritsconclusions.TheseinterviewsfocusedonidentificationofthesupplychainforHOM,therelatedindustriesthatsupportthissupplychain,andareasofconcerninthesupplychain.Bynecessity,thequalitativeportionofthisstudyhasarelativelysmallsamplesize,butasaconsequence,allowsforaricher,morein‐depthexplorationonthemostsalienttopicsrelatedtothesupplychain,andempiricalvalidityoftheinterviewswasestablishednonetheless.WiththeUnitedStatesasaninternationalleaderinaerospaceandNewSpace,therearestillveryfewU.S.firmscapableofsuccessfullyconductinghumanspaceflightoperationsintheimmediatefuture,andsmallsamplestudiesriskbeinganecdotalandinconclusiveifresponsesarefoundtobesignificantlydivergent.Whileeachfirm

1Onemajorhumanspaceflightfirmdeclinedto

participateandanotherfailedtoschedulean

interviewinthetime.

6

interviewedforthisstudyexhibitedauniqueapproachtosupplychainmanagement,therewasagenerallikenessofmindamongalltheinterviewsubjects,demonstratingvalidityandreliabilityinthefindingsdrawnfromthemethod.Inparticular,abroadconsensuswasobservedinregardstotheoverallnatureandstrengthofthesupplychainaswellasonseveralareasofconcern.Wethereforefeeltheconclusionsreachedherearesignificantandrobust.II.NationalCompetitiveAdvantageThisstudyincorporatesthe“PorterDiamond”frameworkfortheanalysisofnationalcompetitiveadvantageinhumanorbitalspaceflight.Inhisseminalbook

entitledCompetitiveAdvantageofNations:CreatingandSustainingSuperiorPerformance,AmericaneconomistandbusinessstrategistMichaelPorterestablishedaframeworkforanalyzingnationalcompetitiveadvantageinspecificindustries.Porter’sunitofanalysisisthenationalindustry.Thediamondframeworkfeaturesfourdeterminants:FirmStrategy,StructureandRivalry;DemandConditions;FactorConditions;andRelatedandSupportingIndustries.Eachofthesedeterminantsmayalsoreinforcethedegreetowhichtheotherdeterminantscontributetoanation’sstageofcompetitivedevelopment.Porter’sdiamondisillustratedinFigure1.

Figure 1. The Porter Diamond

7

Porter Diamond Components

Firm Strategy, Structure and Rivalry FirmStrategy,StructureandRivalryrefertothedomesticenvironmentthatinfluencesentrepreneurialactivityandtheoperationsofexistingfirms.Thelegalregime,culturalstandardsandbusinessnormsallimpactthisdeterminant,andthematchbetweenthesefactorsandthenation’sopportunitiesforcompetitiveadvantagedeterminethelevelofnationalsuccess.

Demand Conditions Thedemandconditionsofthedomesticmarketdriveseveralfactorsthatdeterminethecompetitivenessofanation’sindustry.Theseinclude:thesophisticationofthedomesticcustomer,thecompatibilityofdomesticdemandwiththedesiresofinternationalconsumers,aswellasthesophisticationandcompatibilityofthedistributionsystemwithinternationalnorms.

Factor Conditions Factorsofproductionaretheinputsrequiredofanyparticularindustry.Factorconditionsaretheenvironmentaldeterminantsthatcontributetonationalcompetitiveadvantage.Thisreportwillconsiderboththenaturalendowmentoffactorsaswellastheprocessoffactorcreationandenhancementasitrelatestocommercialhumanspaceflight.

Related and Supporting Industries Porternotesthatparallelindustriescanbeimportanttothesuccessoftheindustryunderanalysisbyprovidingadditionalsupporttothesupplychain.Asupplychainwithmorethanoneclientindustrytosupportdemandislikelytobemoreefficient,dynamicandrobust.Absentsupplyconstraintsinbasicinput

factors,increaseddemandfromparallelindustriesdriveseconomiesofscaleincomponentproduction,reducingcostsfortheindustryunderconsideration.Havingmultipleclientindustriesalsoprotectsproducersfromthecyclicalvariancesindemandandcrisesinanyoneindustry.Thisriskreductionconstitutesacostsavingsthatcanbepassedontoalldownstreamindustries.Incrementalimprovementsandsignificantinnovationsthatoccurinaparallelindustryalsoimprovethequalityandperformanceofcomponentsfromthesharedsupplychain.

Porter’s Stages Porter’stheorydefinesfourstagesofcompetitivedevelopmentbasedonanation’ssourceofadvantage:Factor‐Driven,Investment‐Driven,Innovation‐DrivenandWealth‐Driven.Thefirstthreeofthesereflectincreasingdegreesofeconomiccompetitivenessbasedonupgradingofanation’sproductivecapacity(Porter,2011:lc.9643).Thelaststagereflectsdriftanddeclineincompetitiveadvantage.

Factor‐Driven Inthefactor‐drivenstage,nationsderivetheircompetitiveadvantagefromthebasicinputstosimpleproduction.Suchfactorsincluderawmaterials,arablelandandthenation’slaborpool.Nationsendowedwithsignificantnaturalresourcesoftenexporttheseforproductionelsewhereandnationswithfewresourcestypicallyspecializeinlowcostproductionoflabor‐intensiveitems.Thereisrelativelylittlevalue‐addineithermodelandtheaveragestandardoflivingisusuallylow.

8

Investment‐Driven Nationsintheinvestment‐drivenstageincreasetheirproductivitythroughinvestmentsinlargerscalefacilitiesandinfrastructurewithfundsretainedfromtheirfactoroutputorforeigninvestments.Whiletheymayimproveuponforeignsuppliedtechnology,thisstagedoesnotreflectsignificantinnovationofbasicnewtechnologiesorproducts.Competitiveadvantagefornationsinthisstageisbasedonproductionefficienciesandincrementalimprovementsintheperformanceandqualityofexistingproducts.Addedvalueismultipliedbyinvestmentanddrivesariseinlivingstandards.

Innovation‐Driven Intheinnovation‐drivenstage,nationsinvestintheeducation,researchanddevelopmentnecessarytocreateentirelynewprocessesorproducts.Competitiveadvantagederivesfromprimaryaccesstovaluable,domesticallyproducedintellectualpropertythataddsvaluetoproductsorenhancesproductivity.Innovation‐driveneconomiesutilizeallthedeterminantsofthefullPorterdiamondmodelinawiderangeofindustries.Innovationcreatessubstantialvalueandthereforestandardsoflivingarehighininnovation‐driveneconomies.

Wealth‐Driven and the Current U.S. Stage ItcanbearguedthattheeconomyoftheUnitedStatesofAmericahasadvancedthroughthefirstofthesethreestagesandiscurrentlytransitioningfromtheinnovation‐drivenstagetothewealth‐drivenstage.U.S.consumerdemandishighandsophisticated,andtheUnitedStatesrankshighintermsofruleoflawandconditionsgenerallyconducivetobusiness.TheWorldBank’s“EaseofDoingBusiness”reportfor2013ranksthe

U.S.at#4outof189nationsiandForbesMagazinerankstheU.S.at#14outof145among“BestCountriesforBusiness”index(thoughitistrendingdownward).iiAmericanuniversitiesmaintaingloballeadership,withparticularstrengthsinbusinessandtechnicaleducation.TheUK‐based2013‐2014TimesWorldUniversityRankingsawardedU.S.institutions15ofthetop20spotsincludingtheCaliforniaInstituteofTechnologyUniversity(CalTech)atnumberone.The2013FinancialTimesMBAprogramrankingsplaceHarvardUniversityatthetop,withU.S.schoolscapturingfourofthetopfivepositions,and12ofthetop20.iiiU.S.capitalmarketsareefficient.SophisticatedcorporatestrategydrivesintenserivalrywithintheU.S.domesticmarket,pushingupquality,drivingpricesdownandspurringinnovation.Asmanynewapplicationsandtechnologieshavespunoffofexistingindustries,thereareawidevarietyofrelatedandsupportingindustriesthatreinforceadynamicnetworkofnationalsupplychains.However,itshouldbenoted,thatsluggishGDPgrowthrates,risingnationalandprivatedebt,non‐competitivecorporatetaxrates,lackofprestigeformanufacturingindustries,policiesthatfavorandsubsidizelargeestablishedfirms,anddroppinglaborforceparticipationratesraiseconcernsthattheU.S.isrelyingonpastsuccessandputtingtheengineofinnovationatrisk.TheseareindicatorsofPorter’sWealth‐Drivenstagethatmayforetelladeclineinnationalcompetitiveadvantage.

9

Levels of Analysis Porterworkedatthenationalindustriallevelofanalysis,incorporatingwhateverdiversesetofindustriesthatnationpossessedintotheclusterdata.ThisstudyislimitedtoaspecificgroupofindustriesinvolvedinandsupportingtheHumanOrbitalSpaceflightMarkets.Porter’smodelconductsitslevelofanalysisatthenationalindustriallevel.Porterhaspreviouslydefinedanindustryas:Thegroupoffirmsproducingproductsthatareclosesubstitutesforeachother(Porter,2008).Forthisstudyanationalindustryisdefinedas:thepopulationoffirms,inonenation,producingproductsorservicesthataresimilarenoughtocompetewitheachotherinamarket.

ThisstudywillutilizethelevelsofanalysisstandardsfromtheliteratureofcommunityevolutionandpopulationecologyaspresentedinFigure2.ThepopulationofUnitedStatesfirms,whichprovidesforthetransportationofhumanstoandfromEarthorbit,constitutestheU.S.HumanOrbitalMarket(HOM)industry.ThispopulationispartofthelargercommunityofallNewSpace/Commercialindustriesincludingsatellitelaunch,servicesandsuborbitalspacetourism.Thatcommunitybelongstotheall‐inclusiveaerospacefield,whichincorporatesthecommunitiesofcivilianaircraftindustriesandthosethatdirectlysupportthemilitaryandgovernmentspaceprograms.

Figure 2. Levels of Industry Analysis

10

Cluster Data Issues WhilethisstudyapproximatesthePortermethodologyitlacksofahomogenousdatasetforclusteranalysis.Porter’sclusteranalysisutilizedtheUnitedNationsInternationalMerchandiseTradeStatistics(Comtrade)Database.For1978and1985PorterhadaccesstotheSITC2classificationsystemtoidentifyspecificindustriesforstudy.However,for1971hesuggeststhatthedatasetwas“muchlesssatisfactory.”(Porter,2011:lc.13543).Wefoundourselvesinthatsituationwiththisanalysis.The3‐digitlevelofSITCclassificationusedbyComtradeintheYearbookpublicationsisinsufficientlyrefinedtoisolatetheproductsourinterviewsdeterminedmustbeanalyzed.Utilizingdirectsearchesofthedatabasewithfourandfivedigitcodesproducedslightlybetterresultsbutinmostcasesdidnotidentifythespecializedcommercialspaceproductsunderanalysis(e.g.rocketfuelorspacecraftenvironmentalsystems).Further,analyzingnationalcompetitiveadvantageviatradeflowspresumesthatthereisgenerallysomeleveloffreetradeinthoseitems,resultinginamarketdrivenconclusionofadvantage.Thisisabsolutelynotthecaseinthespacecraftbusiness.Tradeinspacecraftandspaceservicesisamongthemostrestrictedandsubsidizedofallglobalproducts.AlloperationalHumanOrbitalSpacecraftsystemsarecurrentlyproducedandlaunchedbystateenterprises.Inthebroaderspacemarket,everynon‐U.S.launchvehiclemanufacturerandoperatorisstate‐ownedorhassignificant(40%+)stateownership.iv,2

2TheownershipofEuropeanArianespaceiscomplex,butitappearsthatthegovernmentof

Thenominallyprivate,traditionalU.S.launchvehiclemanufacturersbearextremelyclosetiestothemilitary.Employeehiringbyprivatefirmsonspacerelatedprojectsismicromanagedviathenationalsecurityclearanceprocess.NASAhasheavilysubsidizedorbitalvehicledevelopmentbytheemergingCommercial/NewSpacefirmsandeveryorbitalvehiclelaunchhasbeenfromagovernmentalfacility.Forreasonsofnationalandglobalsecurity,theU.S.governmentcontrolsallspacetechnologyexportsandtoalesserdegreeimportsundertheInternationalTrafficinArmsRegulations(ITAR)regimeandotherlaws.U.S.spacetradewithChinaandwithseveralaspiringspacefaringnationslikeIran,NorthKoreanationssimplydoesnotoccur.Exportstothesecondlargestspacemarket,Russia,areextremelylimitedandimportsarealsooccasionallyproblematic.NewSpacefirmshavecomplainedthatevenbusinesswithtraditionalAmericanallies,likeBritain,isimpeded.vThissignificantlydistortstradeflows(i.e.U.S.marketshareinsatelliteexportsdoesnotaccuratelyreflectactualU.S.technologicalorsupplychainadvantagesinthatmarket).Thoughforeignnationsaremoreaggressiveinpursuingexportopportunities,allotherspacecraftandlaunchvehicleproducingnationsmaintaindirectgovernmentalcontroloverspaceproductandserviceexports,withmanysimilarnationalrestrictions.

Francecontrolsmorethan34%andEADSanother30%.EADSappearstohaveabout30%stateownershipitself.

11

Consequently,thisstudyconcludesthatthereiscurrentlynoapproximationoffreetradeinspacetechnology.Ifthissituationwerepermanent,ananalysisofnationalcompetitiveadvantagewouldneedtoassumethesegovernmentalsubsidiesandtraderestrictionfactorsasdeterminants.However,theHOMsareinatransitionalstate.TheU.S.andothernationsarerealigningtheirprioritiestofostereconomicdevelopmentinNewSpace.Thisspecificallymeanstherearelikelytobesignificantreductionsinstatecontrolandrelaxationsofrestrictivetradelaws,likeITAR,inthenearfuture.viOurresearchquestionisnothowtheexistingfactorsofNationalCompletiveAdvantagemanifestincurrentspacetraderegime,buthowtheywillmanifestintheemergingHOMs.ThisstudypresumesthedevelopmentofrelativelyfreerglobalHOMs.Therefore,wefindthattheutilizationofonlyhistoricalU.N.ComtradedataontraditionalaerospacemarketstoassessnationalcompetitiveadvantagewithintheHOMsinappropriate.Whenencounteringinsufficientindustrydata,wehavefollowedPorter’sadvice,“Therewasnochoicebuttomakejudgmentsbasedoninputsfrommanysources.Thealternative,toleaveoutallindustriesnotshowingupintheUNtradestatistics,wasdeemedunacceptablebecauselargegroupsofimportantindustriesinsomenationswouldbeignored”(Porter2011,lc.13518).Therefore,analternativemixedmethodssolutionwasdeveloped.WheretheComtradedatawasjudgetobeirrelevant,weanalyzedeachindustryqualitatively,

integratingproductionandfinancialdatafrommanysources.Weusedourownjudgmentandadviceofindustryexpertstoassignalevelofnationalcompetitiveadvantagefrom0(none)to3(significant)innationalcompetitiveadvantageforeachunitanalyzed.Theselevelsaredescribedandsymbolizedas:NoAdvantage‐0Advantage‐+SignificantAdvantage‐++VerySignificantAdvantage‐+++III.DefinitionofPotentialHumanOrbitalMarketsTheHOMstudygrouppresumesthatthehumanorbitalspaceflightmarketisglobalinnatureandthereforetheanalysisisbestconductedatthegloballevelratherthannationallevel.ThisstudydoesnotdirectlysurveyU.S.marketdemand.BasedontheassumptionsoftheIAAstudyandtheresultsofprevioussurveysweassumethatacommercialmarketforhumanorbitalspaceflightwillemergewithsufficientdemandtosupportanumberofinternationalplayersinagenerallyfreemarketeconomy.3

Existing Market Studies Therehavebeenseveralmarketstudiesandsurveysofhumanspaceflightandrelatedmarkets.ThemostthoroughsurveytoaddressHOMdemandisthe2002SpaceTourismMarketStudybyFutron/Zogby.Thisstudyindicatedsignificantdemandfororbital

3Theauthorsarefullycognizantoftheenormityoftheseassumptionsandthehistorical,economic,andpoliticalchallengestheysuggest.

12

flights,with35%ofthehighnetworthindividualsbeing“definitelylikely”or“verylikely”toparticipateinorbitaltravelwhenpricewasnotafactor.Asexpected,participationratesdroppedwithprice.Atapriceof$25milliononly6%werewillingtoparticipate.At$1milliontheparticipationrateroseto30%.Futronnotedthatanimportantfactorinthedevelopmentofasuccessfulcommercialmarketwasthepresenceofacommercialdestinationfortourists(otherthanISS).Thisstudyprojecteddemandforover400tourismonlypassengersperyearby2020withindustryrevenuesof$297million.TheAdventurersSurveyofPublicSpaceTravelconductedbySpaceportAssociatesin2006concludedthat47%ofself‐identifiedadventuretouristswouldbeinterestedinorbitalflight.viiA2013studyconductedbystudentsattheUniversityofCalifornia,Irvinesuggeststhat35.3%ofrespondentswould“payanypricetheycouldafford”foranorbitalflight,verycloselyparallelingtheearlierFutronresults.viiiA2011statementbySpaceAdventures,theonlyfirmthathasdeliveredorbitaltourismtrips,estimatedthatby2020morethan140privateindividualswouldhavemadeatriptospace.ixNASA’sCommercialMarketAssessmentforCrewandCargoSystemsstudydidnotincludeasurveybutdidanalyzethenon‐governmentalmarketsaddressedinthisstudy.NASAconservativelyconcludedthattheupper‐enddemandforallnon‐governmentalorbitalhumanflightswasapproximately350overaten‐yearperiod.

History of Human Orbital Markets Governmentalspaceprogramshavealreadydemonstratedseveralcommercialmarketsandhaverevealedpotentialdemandinothers.Figure3listsmarketsidentifiedinthisstudy.Thehistoryofotherdisruptivetechnologiessuggests(e.g.Christensen,1997)thatmanyapplicationsofcommercialhumanorbitalspaceflighthavenotbeenidentified.Itispossiblethatthemarketdrivingapplicationhasyettobeidentified.Forthepurposesofthisstudy,ademonstratedmarketisdefinedasoneinwhichtherehavebeenre‐occurring(morethanonce)andsustained(stillon‐going)revenues.Apotentialmarketisoneinwhichopeninteresthasbeenexpressedbypartiescapableofpayingthefareandinwhichlimitedtransactionsmayhaveoccurred.TheexistenceofdemandforprofitabletransportationtoLowEarthOrbithasbeenconclusivelydemonstratedinthemarketsforTourism,U.S.DomesticCrewTransportationandForeignAstronautCorpsflightsbytheRussianandU.S.governmentmannedspaceprograms.

Tourism ThefirstpaidflighttospacebyatouristwasthenotablecaseofDennisTito.TitofirstarrangedforatriptotheMirspacestationonaRussianSoyuzvehicleviaanarrangementwiththeAmericanfirm,MirCorp.DespitesignificantoppositionfromtheAmericanspaceagency,Titoeventuallypaid$20millionforatriptotheInternationalSpaceStationin2001bookedthroughanotherU.S.firm,SpaceAdventures(Dubb.&Paat‐Dahlstrom,2011).

13

FollowingTito’smissiontherewereseveraladditionalspacetourismflights,includingtwoflightscommissionedbyMicrosoftbillionaire,CharlesSimonyi.Since2009therehavebeennotourismflightsavailable,astheretirementoftheSpaceShuttlealongwithanincreasedISS

crewstandardhasresultedintheavailablesupplyofSoyuzseatsbeingconsumedbyNASAastronauts.However,demandremainsdemonstratedbythe$51milliontriptoISSplannedbyBritishsinger,SarahBrightman.x

Figure 3. Identified Human Orbital Markets

BothSpaceAdventuresandBritishbasedExcalibur‐AlmazhaveannouncedplansforcircumlunarcommercialflightsbasedonupdatedSovietspacetechnology.In2011,SpaceAdventuresannouncedthatonetickethadbeensoldatapriceof$150million.xi

U.S. Domestic Crew Transportation DuringthedevelopmentoftheInternationalSpaceStationproject,NASAanticipatedutilizingtheRussianSoyuzspacecraftforcrewtransportationandnegotiatedabilateralagreementforcrewexchanges.xiiNASAassistedinthespecificationandfundingofmodificationstotheTMAversionofSoyuzdesignedtoaccommodateawidervarietyofpassengersizes.FollowingthelossoftheColumbiaOrbiter,shuttlelaunchesweresuspended

(February1,2003‐July26,2005),andcontinuedconcernswiththesheddingoffoamfromtheshuttle’sexternalfueltankprecipitatedasecondsuspension(August9,2005‐July4,2006).ThesesuspensionsandareducedflightschedulerequiredNASAtoscheduleanumberofU.S.astronautflightsonSoyuz.InitiallyunabletopayRussiadirectlyforspacehardwareorservicesduetoprovisionsoftheIran,NorthKorea,andSyriaNonproliferationAct,NASAmadeotherindirecttransfersofconsiderableeconomicvalue,includingtheclearingofadebtofflightservicehoursvaluedatupto$60million.xiiiCongressprovidedfordirectpaymentstoRussiaforspaceflightserviceswiththepassageofspeciallegislationin2005.xivFollowingtheretirementoftheU.S.shuttlefleet(July21,2011),NASAnegotiatedabulkcontractwith

14

Roscosmosfor12passengerseatsatacostof$753million($63millionperpassenger).In2013,itextendedthiscontractwithanadditionalsixseatsatacostof$424million($71millionperpassenger).Followingthepublicannouncementofthatcontractextension,theNASAadministrator,CharlesBolden,explicitlyexpressedsupportforthePresident’sgoalof“AmericancompanieslaunchingourastronautsfromU.S.soil.”xvAmarketintransportingAmericanastronautstoandfromtheISShasbeenclearlyestablishedandasuccessfulU.S.commercialfirmcouldgenerateseveralhundredmillionsinrevenueannuallyfromthismarket.

Astronaut Corps of Foreign Nations Thetransportationofastronautsfromnon‐spacefaringnationstolowearthorbithasbeendemonstratedbymanyflightsofforeignnationalsaboardbothU.S.andRussianspacecraft.ThefirstsuchflightswerethelaunchofcosmonautsfromCzechoslovakia,PolandandEastGermanybytheformerSovietUnionin1978.xvi

Research and Development In1984,NASAaccepted$40,000toflyMcDonnellDouglasengineerCharlesDavidWalkeronSTS‐41‐DsothatWalkercouldoperateaspacepharmaceuticalmanufacturingexperimentknownastheContinuousFlowElectrophoresis(CFES)device.Walkermadetwofurtherflightsinconnectionwiththiswork.Thoughthefeewasclearlyatokeneconomictransfer,itdidsuggestthatfirmswerewillingtopayforhumanorbitalflightinsupportofresearchanddevelopment.TheChallengerdisasterof1986endedNASA’sexperimentationwithpaidspaceflight(Walker,2006).

Media and Promotion In1990,theTokyoBroadcastingSystempaid$28milliontoflyJapanesereporterToyohiroAkiyamatoSpacestationMirforaseriesofone‐weektelevisionspecials.In1991,HelenSharmanwasflowntotheMiraspartofaprogramcalled“ProjectJuno.”JunowasoriginatedbyaconsortiumoffirmsintentoncreatingpublicitysurroundingthefirstBritishcitizeninspace.Thoughtheconsortiumfailedtodeliverthefunds,theSovietsflewSharmananyway(Dubb&Paat‐Dahlstrom,2011).DuringherstayontheInternationalSpaceStationin2006,FemaleSpaceTourist,AnoushehAnsaribecameoneoftheworld’smostpopularbloggers.Thisstudyconcludesthatwhiletherehasbeensomedemonstrateddemandforpromotionalandmedia‐relatedspaceflight,itisunclearifitissufficienttosupportanHOMmarket.

Future Markets Atleasttwofirms,PlanetaryResourcesandDeepSpaceIndustries,havebeenfoundedwiththegoalofextractingmineralresourcesfromasteroids.SuchoperationsmightinvolvehumantransporttoroboticallycapturedasteroidsbroughtintoEarthorbit.NASAhasalsoproposedademonstrationmissionofthisnature.xviiSincethefoundationalworkofGerardK.O’Neillinthe1970sxviii,manyproposalshavebeenmadetolocatepopulations,powerstationsandmanufacturingplantsinEarthOrbit.Suchfacilitieswouldlikelyrequirehumanassemblyandpossiblymaintenance.Withtheestablishmentofsignificantindustryinspaceitislikelythatmanagerswillconductreviewvisitsatspacefacilitiesandmayeventually

15

establishanonsitepresence,drivingafuture“businesstravel”marketinspace.Whilehighlyspeculativeatthistime,suchamarket,beingdrivenbymoredirecteconomicreturns,wouldbemorerobustandsustainablethanexistingmarkets.

Other Markets Othermarkets,ofunknownpotentialthathavebeensuggestedinclude:zerogravitymedicaltreatment,spiritual‐religioustravelandend‐of‐lifetravel.IV.CommercialU.S.HumanOrbitalIndustriesFollowingPorter’sframework,abriefhistoricalreviewoftheU.S.SpaceLaunchindustryanditsrelatedindustriesispresented.

Government Funded Space Efforts AlthoughsignificantresearchwasconductbyRobertGoddard4andothersbeforeWorldWarII,actualspaceflightstartedintheUnitedStateswiththelaunchofvehiclesrecoveredfromtheGermanlong‐rangemissileprogram.SeveralV2rocketslaunchedfromtheWhiteSandsMissileRangefrom1946‐1952crossedtheKarmenline(demarcatedat100km)intospace.TheUnitedStatesgovernmentuseddomesticallyproducedmilitaryhardwareforthefirstAmericanorbitalsatellitelaunchin1958,shortlyaftertheSovietUnionlaunchedSputnik.Shortlyafterward,HumanU.S.spaceflightprojectsweretransferredtoanewlyreformedciviliangovernmentagency,theNationalAeronauticsandSpaceAdministration

4Goddard’sgroundbreakingworkwasheavilybackedbygrantsfromtheSmithsonianFoundation.

(NASA).However,rocketdevelopmentremainedcloselytiedtothemilitaryprogram.ThefirstU.S.humanspaceflightsweremadein1961,againcloselyfollowingthatoftheSoviets.Sincethattime,theU.S.hasachievedseveralmilestonesincludingdockingoperationsinspace,long‐termspacehabitation,lunarexplorationandtheoperationofreusablespacecraft.TheUnitedStateswasanearlyentrantingovernmentalspacelaunchesandhasmorethansixtyyearsofspacelaunchexperience,withmorehumanspaceflights(166)thananyothernation.TheU.S.hasalsoproducedawidervarietyofhumanratedspacecraftthananyothernation.NASAhasflownsub‐orbitalandorbitallaunchsystemswithvehiclescapableoftransportingonetoeightpassengers.Thesespacecrafthaveusedparachutesforlandandsearecoveryaswellaswings.Theagencyhasdevelopedlunarorbital,landingandreturnvehicles.Despitethishistory,theAmericangovernmentalhumanspaceflightprogramiscurrentlyentirelydependentonforeignlaunchvehicleswhileitawaitstheconstructionofanewdomesticallyproducedgovernmentalvehicleand/oranapprovalofacommerciallyprovidedhumanorbitalspaceflightsystem.TheU.S.governmentalhumanspaceprogramhasalsohistoricallyutilizedamorecommercialsupplychainthanitscompetitors,withthemajorityofdevelopmentandconstructionconductedbycommercialandoftenpubliclytradedfirms,albeitwiththetoptierdominatedbyasmallcohortoflargefirmscloselyassociatedwiththeU.S.military.TheprogramsoftheSovietUnion/Russiaand

16

Chinahavebeenexplicitlysuppliedbymilitaryandstate‐ownedenterprises.

Commercial Space History TheUnitedStatesgovernmenthasbeenaleaderintheefforttocommercializeaccesstospacesincethe1980swithlegislationaimedatprivatization(Autry,2013).ThefirstprivateinvestmentinanAmericanNewSpacefirmoccurredin1975,followedbyseveralsignificantprivatelyfundedspaceprojectsintheearly1980s,producingthefirstsuccessful(sub‐orbital)commercial,unmannedspaceflightin19825(Autry,2013).Finally,theUnitedStates(asof2013)remainstheonlynationwithasuccessfulprivately‐fundedhumanspacelaunchproject:thethreesub‐orbitalflightsmadebyScaledComposite’sSpaceShipOnein2004.Nonationhasattemptedanorbitalcommercialflight,thoughitwouldappearthatU.S.basedSpaceExplorationTechnologiesisontracktodosoasearlyas2015.Infact,itappearsthatSpaceXisfullycapableofmakingsuchalaunchandrecoveryatthistimeandisonlydelayedbytheprocessofhuman‐ratingtheirsystem.TheULA+BoeingandULA+SierraNevadaprojectsarealsoonaverycredibletracktoachievethisgoalbeforetheendofthedecade.NoothernationhasacomparablycrediblecommercialHOMeffort.V.FactorConditionsandtheSupplyChainThebasicfactorsofnationalcompetitiveadvantagearebothendowedandcreated(Porter,2011).Whilethenatural

5SpaceServices,Inc.’sConestogaIlaunchedfromWallopsIsland,VAreached313kmwhereitejecteda500kgtestpayload.

endowmentofbasicfactorinputsvariesbynation,Portersuggeststhat,“thefactorsmostimportanttocompetitiveadvantageinmostindustries,especiallythosemostvitaltoproductivitygrowthinadvancedeconomies,arenotinheritedbutarecreatedwithinanation.”(Porter,2011:lc.2009)Theindustriesthataresupportedbythesecreatedfactorstendtoaddconsiderablymoreeconomicvaluetothesupplychainthantheextractiveindustriesassociatedwithendowedfactors.ThesuperiorvaluecreationofsuchcreatedfactorsoverendowedfactorswaskeenlyillustratedinthesecondhalfofthetwentiethcenturybytherapideconomicadvancementoftherelativelyresourcepoorEast‐AsiannationsofJapan,SingaporeandHongKong.DuringthissameperiodmanyresourcerichnationsinAfrica,CentralAsiaandLatinAmericastruggledwithsustainingbasiclevelsofgrowth.

Relevant U.S. Endowed Factors

Human Resources Thequantity,demographicsandqualityofthenationalpopulationarefundamentaltonationalcompetitiveadvantage.Basicfactorpoolsseldomestablishcompetitiveadvantageinandofthemselves,howevertheyserveasthebasisforadvancedfactorsthatdoso(Porter,2011:lc.2049).Nationalpopulationconstitutesthefundamentalfactorpoolofpotentialpersonnelinthenecessaryspecialtiestoestablishcompetitiveadvantageinindustrieswithacomplexandhighlydiversifiedsupplychain.Alargerpopulationprovidesthepotentialforcompetitiveadvantagebyincreasingthecandidatesavailableforspecializedfactors.AsofNovember2013,thepopulationoftheUnitedStateswas

17

317millionxixandthenationwasrankedasthethirdmostpopuloussovereignnationonEarth.xxWithrespecttocompetingspacefaringnationswithdemonstratedhumanspaceflightcapacity,theU.S.rankssecond,farbehindChinawith1.3billionandsubstantiallyaheadofRussiaat143million.Thereislittlereasontopresumethathundredsofmillionsofcitizensarerequiredtosustainasuccessfulmannedspaceflightprogram.Severalmid‐sizednationssuchasGermany(81million)andSouthKorea(49million)haveenteredtheinnovationstageandsupportextremelycomplexindustriesincludingautomobile,shipbuilding,machinetoolsandelectronicssustainedbysophisticatedandhighlyspecializednationalsupplychains.PopulationgrowthisafundamentaldriverofGDPgrowth.Enteringtheseconddecadeofthe21stcentury,theUnitedStatefacesademographicchallengewithasteadilydecliningfertilityrateof1.93wellbelowthereplacementlevelof2.1.Therateamongcollege‐educatedwomenisevenlowerat1.6.xxiTheprimarysubstitutefordomesticbirthisimmigration.Notonlydoimmigrantscontributetothepopulationdirectly,butfirstgenerationimmigrantsalsohavedisproportionatelyhigherbirthrates.AculturaldispositionmarkedbyanacceptanceofimmigrantshaslongprovidedtheUnitedStateswithanadvantageinpopulationgrowthovereconomiccompetitors,likeJapan.A2013WallStreetJournalarticlesuggestedthat,“immigrationhaskeptAmericafromcareeningoverthedemographiccliff.”xxiiImmigrantsandforeignworkershavealsobeennotedtoexhibithigherratesofentrepreneurialactivity(Fairlie,2012).xxiii

Thisisevidentwithinthe“NewSpace”community.ThefoundersoftwoofthemostvisibleandarguablymostviableAmericanspacecraftfirmsarenon‐U.S.born.ASouthAfricanImmigrant,ElonMusk,foundedHawthorneCaliforniabasedExplorationTechnologiesin2002.BritishNational,SirRichardBranson,establishedVirginGalacticin2004atMojave,CA.However,demandforimmigrationtotheU.S.hasdeclinedinrecentyears.xxivForexample,netimmigrationfromMexicototheU.S.hasbeenflatornegativeforfiveyearsfrom2007to2012(Passel,etal,2012).xxvPopulationagedemographicsareanimportantmoderatingfactoronnationalhumanresourceendowments.Adultsbetweentheagesof18and65aremostlikelytobeinthelaborforce.Populationswithmoreworkersatthestartoftheirprofessionalcareers,between20to30yearsofage,haveanadvantageinlowerwagecost.Youngerworkersalsodemonstrateincreasedproductivityandmentalacuity(Skirbekk,2004).Theyaremorelikelytobeskilledinproblemsolving,learningandmath(Skirbekk,2004).Economiesdependentontheskillsandentrepreneurshipofyoungerpopulationsareabletosustaintheiradvantagelonger.Economiesdependentonagingpopulationsfacehighersocialservicescostsfromretirementandentitlementprograms.Ingeneral,ayoungerpopulationoffersnationalcompetitiveadvantages.ThisposesademographicchallengefortheU.S.wherethemeanpopulationageintheUnitedStateshasrisenfrom28.1in1970to37.2in2010(U.S.Census).

18

Aginghasbeenparticularlydistinctwithinaerospaceengineering.Themajorityofourinterviewsubjectsexpressedconcernwiththisphenomenon,specificallynotingacoming“retirementwave”ofseniorengineersqualifiedtomanagecomplexprojects.IthasbeenremarkedthattheaverageengineeratNASAduringtheApollomoonmissionwasinhismid‐twenties.Asof2009,thisaveragehasrisentothelateforties.Notably,themeanageofanewhireatNASAisnow41.xxviThelaborforceparticipationrateiscalculatedastheratioofthoseactuallyworkingtothoseofworkingagewhoarenotinstitutionalized(BureauofLaborStatistics).Thetrendsreviewedhere

wouldpredictafallingU.S.participationrate,andthatisindeedthecase(fig.4).However,theactualmeasurehasbeenfallingfasterthandemographicmodelspredict.A2006BureauofLaborStatisticsstudy(Tossi,2006)anda2002study(Szafran,2002)bothpredictedparticipationratesfor2012nearlytwopointshigher(approximately66%)thanwhathasbeenactuallyobserved(approximately64%).IthasbeenwidelysuggestedthatalackofeconomicgrowthintheUnitedStateshasresultedinfewerAmericansseekingwork.ThiswouldbesupportedandinlinewithPorter’sdescriptionofthewealth‐drivenphase(Porter,2011:loc.9830).

Figure 4. Labor force participation rate: Source: Bureau of Labor Statistics

Knowledge Resources AllHOMcareersareanticipatedtorequireasecondaryeducation/highschooldiplomaorequivalent.ThemajorityofHOMcareersrequirepost‐secondaryeducationinatechnicalfield.UnitedStatesspendingoneducationis7.3%ofGDP,wellabovetheOECDaverageof6.2%andtheOECDreports,“Acrossall

levelsofeducation,annualper‐studentspendingbyeducationalinstitutionsintheU.S.ishigherthaninanyothercountry,atUSD15,812”(OCED,2012).Yet,U.S.K‐12publicschoolsareregardedasmediocrebyinternationalstandardsandranklowincomparativestatisticsamongdevelopednations.Onthe2009PISAassessmentof15‐year‐olds,theUnitedStatesperformsaroundtheaveragein

19

reading(rank14)andscience(rank17),yetbelowtheaverageinmathematics(rank25)amongthe34OECDcountries(PISA,2012;OECD2013).Similarstatisticswerefoundinthe2012assessment(rank27)amongthe34OECDcountries,whereAmericanscoresremainedstagnant,butslippedinabsoluterankingbecausemanyoftheothercountrieshadimproved.TheAmericanUniversitysystem,bothprivateandpublic,iswidelyregardedasthefinestintheworld.U.S.studentshavea42%highereducationparticipationrate,whichissignificantlyabovetheOECDaverageof30%(OECD,2012,p.2).However,thecostofeducationintheU.S.highereducationremainssignificantlyaboveaverageaswellandstudentsareoftenburdenedwithdebtupontheirexitfromuniversity.TheUnitedStatesrank17thinPearson’sIndexofCognitiveSkillsandEducationalAttainmentwithascoreof0.35belowmanyEuropeannations(Finland=1.26,SouthKorea=1.23,UK=0.60)andwellaboveRussia(0.26).China’sextremelyuneveneducationalsystemisnotrankedinthisindex,thoughthecountryisnotedforhighliteracyratesandbeingthelargestforeignbeneficiaryoftheU.S.highereducationsystem.xxviiEducation(specific–STEM)SeveralintervieweesechoedtheconcernoftenexpressedwithinthenationalmediaxxviiithatAmericahasslippedin

Science,Technology,EngineeringandMath,theso‐calledSTEMfields.Figure5ashowsU.S.scienceengineeringdegreesawardedbyyearattheundergraduateandgraduatelevels.Figure5bshowsU.S.undergraduatedegreesinAerospaceEngineering,MechanicalEngineering,andComputerScience.Themid‐decadedeclineinenrollmentsinComputerScienceisparticularlynotablewitha48%dropbetween2000and2006.xxixDataforthelastfewyearssuggeststhatCSenrollmenttrendisimproving.However,thesegraphsoverlookthedominanceofforeignstudentsinadvancedcomputingdegreeprogramsatU.S.universities.AccordingtotheComputingResearchAssociation,62.3%ofComputerScienceand69.3%ofComputerEngineeringMastersdegreesawardedin2012wenttonon‐residentaliens.xxxForPhDs,thesefigureswere51.3%and55.3%respectively.xxxiTheU.S.usesitseducationalsystemtoeducatemoreforeignstudentsthananyothernation(OCDED,2012).ThisreportconcludesthattheU.S.educationalsystemiswellalignedwiththerequirementsofdevelopingHOMindustries.TheUnitedStatespossessesverysignificantnationalcompetitiveadvantage(+++)inhumanresourcesandeducation.

20

Figure 5a. U.S. Science and engineering degree awards by year, 2000‐2010

Source: National Science Foundation

Figure 5b. U.S. Degrees in Computer Science, Aerospace and Mechanical Engineering, 2000‐2010

Source: National Science Foundation

21

Basic Extractive Resources InreviewingthenationalcompetitiveadvantageoftheUnitedStatesinbasicextractiveresources,itshouldbenotedthatthesearegenerallyfullyfungible,globallytradedcommodities.Inarelativelyfree‐tradeenvironment,thepossessionofmineralassets,miningcapacity,refining,smeltingandproductioncapacityofferslittledownstreameconomicadvantage.Barringasignificantdisruptionofworldtrade,basicfactorinputscanbeassumedtobeeasilyaccessiblebyallspacefaringnations.6Possibleglobaldisruptions,suchasamajorwarwouldalsosurelypresumablydisturbthedemandforglobalHOMmarkets.Regionaldisturbancescancreatesupplyconstraintsinspecificfactorsthataresometimesreferredtoas“conflictminerals.”With9.87millionsquarekilometersofdiversegeology,theUnitedStatesrankshighinmineralreservesandpossessesanextensivenetworkofmatureandvibrantextractionandrefiningindustries.Abriefoverviewofinputsrelevanttospacecraftandlaunchvehicleproductionandoperationfollows.

Petroleum and Petrochemical Refining TheInternationalEnergyAgency(IEA)reportsthattheU.S.isexpectedtobetheworld’slargestoilproducerby2015andontracktobecomingaself‐sufficientsupplier.xxxiiU.S.andglobalpetroleumsuppliesremainmorethansufficienttosupporttheHOMmarket.U.S.refiningcapacityhasstrainedtokeepupwiththeincreaseddomesticproduction

6OtherthanaspirantssubjecttosanctionregimesuchasIranorNorthKorea.

broughtonbythecommercialsuccessofhydraulicfracturing.U.S.refiningcapacitypeekedinthelate1970sandbeenconstrainedbyfederalandstateenvironmentalregulations.xxxiiiTheEIAreportsthatthelastmajorU.S.refinerywasconstructedin1977xxxivandthatU.S.iscurrentlyoperatingatabove90%utilization.xxxvHowevermuchofU.S.oilrefiningcapacityisorientatedtowardsprocessingimportedoil.BoththeCouncilonForeignRelationsxxxviandtheEIAxxxviihavenotedthatamismatchinrefiningcapacitywiththevolumeandqualityofdomesticoilposesaconcern.ThisstudyconcludesthattheU.S.petroleumproductionismorethansufficientandthatpetrochemicalrefiningissufficientlyalignedwiththeneedsoftheHOMindustries.TheU.S.holdssignificant(++)competitiveadvantageinpetroleumproductionandpetrochemicalrefining.

Metals and Minerals TheU.S.isagloballeaderintheextractionofmetallicandnon‐metallicminerals.Intotal,miningoperationscontributed$102.6billiontotheU.S.economyin2011accordingtoareportbytheNationalMiningAssociation.Coalaccountsfor$37.4billionofthiseconomicactivity;non‐metallicmineralscontribute$36billionwithmetalscontributing$29.2.xxxviiiAccordingtothe2010BritishGeologicalSurvey(BGS),theU.S.isamajorproducerofmanymetalsincludingIron/Steel,Copper,Bauxite/alumina/aluminum,Silver,Gold,andUranium.xxxixTherearesomespecificminerals,essentialtotheaerospaceindustryandtechnologyingeneral,inwhichtheU.S.currentlylacks

22

eithersufficientknownreservesorproductioncapacity.Titaniumalloysarenotedfortheirlightweighttensilestrengthandcorrosionandfatigueresistancewhichmakethemanextremelyimportantbasicinputforspecializedspacecraftcomponentsusedinstructuresandmotorsaswellasbeingusedasapigment(Ti02)inthebrilliantwhitepaintmostcommonlyassociatedwithspacecraft.Whilenotasignificantsourceofore,theU.S.doesproduceamoderateamountoftitaniummaterials.TheU.S.GeologicalSurvey(USGS)reportsthatthenation“hasbecomehighlydependentonimportsofthemineralsusedtomaketitaniumandTiO2.”HoweverthesematerialscomeprimarilyviaverystabletradingrelationshipswithAustraliaandCanada.”xlRussiaandChinaaremajorproducersoftitaniumwithsourcematerialfromtheUkraineandAustraliarespectively.Nonetheless,duringtheColdWar,theU.S.DODmaintainedaNationalDefenseStockpile(NDS),whichincludedstrategicreservesofspongetitaniummetalfortheaerospaceindustry.Cobaltisimportantinanumberofspacerelatedmaterialsincludinghighstrengthalloydrillbits,powerfulmagnets,andrechargeablebatteries.Itisalsoacatalystmaterialusedinchemicalproductionreactors.TheUnitedStatesisnotasignificantproducerofcobaltandimportsmuchofthematerialfromAfrica,thoughBGSreportsthatitdoeshaveahighqualitydepositunderdevelopmentinIdaho.TheU.S.isnotasignificantproducerofchromium,whichisusedintheproductionofstainlesssteel,asignificantinputtospacecraftandlaunchvehicles.TheU.S.alsolacksreservesoftantalum,animportantinputforelectronics.Tantalum

hasbeenconstrainedinrecentyearsresultinginrisingprices.xliTheNewYorkTimesreportsthat“TheUnitedStatesdependsfullyonforeigngalliumandindiumandis80percentdependentonimportedgermanium”xliiallofwhichareimportantinspecializedelectronics.A2012reportbyAmericanResourcesPolicyNetworksuggeststhattheU.S.ishighlydependentonforeignsourcesfor:antimony,arsenic,bauxite,cobalt,fluorspar,gallium,hafnium,lithium,manganese,nickel,platinum,rhenium,strontium,tantalum,tellurium,tin,vanadium,andzinc.U.S.suppliesofsilicon,essentialtotheproductionofelectronics,areample.TheUnitedStatesistheleadingproducerofcrystallinesilica,theessentialinputtotheproductionofopticalglass,ceramicsandinsupportofoilproduction(usedinfracking).RareEarthsThegroupofexoticmetalsknownasthe“RareEarthElements”(REEs)includes15LanthanidestogetherwithYttriumandScandium.Thesemetalsaregenerallyfoundtogetherinsedimentarydepositsandmustbeextractedusingsophisticatedrefiningtechniques.Smallquantitiesofthesemineralsareessentialtoproductionofanumberofhigh‐technologyproductscommonlyutilizedinspacecraft.TheseincludeLCDscreens,high‐performancebatteries,solarpanels,powerfulmagnetsandnavigationalsystems.TheUnitedStatespossessessignificantprovenreservesofrareearths.InfacttheU.S.possessestheworld’ssecondlargestconcentrateddepositatMountainPass,

23

California.However,productionattheminewashaltedin2002andthoughtheminehasbeenundergoingupgrades,areturntofullproductionhasbeendelayed.xliiiThisstudyconcludesthattheU.S.metalandmineralextractionandrefiningindustriesaresufficientlyalignedwiththeneedsoftheHOMindustries.TheU.S.holdssignificant(++)competitiveadvantageinmetalsandminerals.

Capital Resources Accesstoprivatecapitalisoneofthemostcriticalresourcesforthedevelopmentofanynewtechnologicalindustry(Porter,2011:lc.2022).Porternotesthatthe“globalizationofcapitalmarkets”hastendedtohomogenizenationalconditions.However,thenationalsecurityimplicationsofspaceflightdrivehighlyregulatedandconstrainedaerospacecapitalflows,makingavailableendogenouscapitalsignificantlymorepowerful.7Anationwithcaptive,privatedomesticcapitalavailableforspaceinvestmentthereforehassignificantnationalcompetitiveadvantage.TheUnitedStatesistheworld’swealthiestcountry.AccordingtotheInternationalHumanDimensionsProgrammeonGlobalEnvironmentalChangethe“inclusivewealth”,ameasureofa“country'scapitalassets,includingmanufactured,humanandnaturalcapital”intheUnitedStatesis$118trillion,morethantwicethatofsecondrankedJapanat$55trillion.xlivTheU.S.isrankedjustseventhinmeanwealthper

7e.g.ItisunlikelythataU.S.investorcouldmakeasignificantinvestmentaChinesespacefirmduetorestrictionsplacedonsuchaninvestmentbybothnations’governments.SimilardomesticownershiprestrictionsinregardstoaerospacefirmsarealsofavoredbyRussiaandEuropeannations.

individualaccordingtothe2012GlobalWealthReportbyCreditSuisseandevenlowerinmedianwealthindicatingunevenwealthdistribution.xlvHowever,highnetworthindividualsareparticularlyimportanttothefinancingofunusualandriskybusinessendeavors.Fromthisperspective,thenotedtrendofincreasingincomeandwealthdisparityinAmericaxlvidrivesanadvantageininvestablewealthconcentration.TheCreditSuissereportrevealsthattheU.S.hasmorethan35,000“Ultrahighnetworthindividuals”8,withChinaplacingsecondatunder5,000.EntryintothefirsttieroftheHOMsrequireshundredsofmillionsofdollarsofinvestment,necessitatingeitherbillionaire‐classangelinvestors.TheForbes’2013rankingof1,426billionaireslists442asbeingU.S.citizens,including13ofthetop20.TheAmericanbankingsystemismatureworldleadingindustrywithsophisticatedandtransparentgovernance.TheU.S.systemdidattractsignificantcriticismfollowingthe2007‐2009financialcrisis,buttheregulatoryreactiontothecrisiswasrelativelyresponsiveandrobust.However,BloombergplacesonlyoneU.S.institutiononits2012listof20“World’sStrongestBanks.”xlviiAmericanentrepreneursenjoydirectaccesstotheworld’smostvibrantnetworkofangelinvestorsandventurecapitalistswithaninterestinhigh‐technologycompanies.Whiletraditionalinvestorshavebeenhesitanttoembracespacestartups,theU.S.possessesasignificantpotentialadvantageincapitalresources.However,despitetheseadvantagesin8Definedaspossessing$50millionormore.

24

assetsandcapitaltheUnitedStateshasbeenrapidlyaccumulatingpublicandprivatedebt.AccordingtotheUSDebtClock.orgthetotalunfundedliabilities9oftheUnitedStatesareover$127trillion,farexceedingthevalueofallnationalassets.xlviiiThisrepresentsasignificantlong‐termconcernfortheU.S.economyandcapitalmarkets.Thisreportconcludesthatwhilethegrowingpublicandprivatedebtremainsaconcern,theU.S.privatecapitalmarketsandfinancialsectorareverywellalignedwiththerequirementsofdevelopingHOMindustries.TheUnitedStatespossessesverysignificantnationalcompetitiveadvantage(+++)infinance.

Infrastructure AsaleadingdevelopednationtheU.S.hasarobustlydevelopedinfrastructurethathasboastedworld‐classutilities,communicationsandtransportationsystemsforseveralgenerations.TheU.S.wasthegloballeaderinimplementationofmostmodernsystemsincludingtelephony,electricpower,automobilehighways,airportsandairtrafficcontrol,andtheInternet.SpaceSpecificInfrastructureTheUnitedStatesspaceinfrastructureisunparalleled.TheU.S.hasnolessthanfivegovernmentallaunchfacilitiesthathaveplacedpayloadsintoorbit:CapeCanaveral,Florida;VandenbergAirforceBase,California;WallopsIsland,Virginia;KwajaleinAtoll,MarshallIslands;andKodiakIsland,Alaska.

9Theunfundedliabilitiesconsistofcommitmentstogovernmentincomeandmedicalentitlementprogramsforretiredworkers–socialsecurityandMedicare.

Anumberofprivatespaceportsprimarilyfocusedonsuborbitalflightsarenowinoperationorinreview.OperationalfacilitiesincludetheMojaveAirandSpaceport,California;SpaceportAmericainNewMexico;andtheMid‐AtlanticRegionalSpaceport(MARS),Virginia.AcommercialorbitallaunchwasmadeatMARSbyOrbitalin2013.VerticalsuborbitallauncheshavebeenconductedatSpaceportAmericaxlix.Likewise,PaulAllen’sStratolaunchprogramproposesoperatingoutofhorizontalrunwayfacilitieslikeMojavetoconductorbitalairlaunchesasfaras1500milesaway.SuchasystemcouldconceivablylaunchHOMvehiclesfromanymajorairport.lTheU.S.governmentaerospaceeconomyhasalwaysbeencyclical.Currentlytheindustryisinalong‐termdownturnrelatedtodeepbudgetcutsindefenseandyearsofdeclininginvestmentinthecivilianspaceprogram.Thissituationhasresultedinsubstantialexcesscapacityinseveralareas.ThecancelationoftheSpaceShuttleprogramanditsreplacementConstellationprogramhasleftNASAwithoutamannedspaceflightprogram.TheNASAcentersinHoustonandattheCapehaveanumberoffacilitiesthatareentirelymothballedorunderutilized.TheseincludeR&Dlabs,windtunnels,launchpadsandastronauttrainingfacilities.Muchofthisexcesscapacityingovernmentalfacilitiesisbeingmadeavailabletocommercialspaceflightoperators,includingpotentialHOMparticipants.NASAhasopeneditsR&DfacilitiesandlabsforthetestingofcommercialspacecraftincludingrunningmodelsoftheSierraNevadaCorporation’sDreamChaserspacecraftinthehypersonicwindtunnelattheLangleyResearch

25

CenterinHampton,VA.liInanotableoperationalexampleofprivatization,NASArecentlytransferredoperationoftheir39AlaunchcomplextoSpaceXatnocharge.liiLC‐39Awasusedtolaunchmannedspaceflightsfromthe1960sApolloprogramthroughthefinalSpaceShuttlein2011.Houston’sJohnsonSpaceCenterhasbeenrentingoutitsextra‐largeswimmingpool,theNeutralBuoyancyLaboratory,toprivatetrainingfirmswishingtosimulatezerogravityconditionsforcommercialHOMastronautsandspaceflightparticipants.ThetwentiethcenturyU.S.investmentincommercialaviation,militaryaerospaceandthenationalspaceprogramhasalsoproducedsignificantexcessfacilitycapacityamongcommercialcontractors.TheprimaryproductionfacilityforSpaceExplorationTechnologiesinHawthorneCaliforniaisaformerNorthrupfactoryusedformanyyearstoproduceaircraftandcomponentsforbothmilitaryandcommercialaviation.liiiOceanicSupportCapabilitiesPriortotheSpaceShuttle,theU.S.traditionallyutilizeda“splashdown”techniquetorecovermannedspacecapsulesfromthesea.Thoughplanningtomovetoaland‐basedsolution,SpaceXhas,sofar,recoveredtheirDragoncapsulesatseaaswell.RecoveryandsearchandrescueoperationsforfutureHOMvehiclesmaytakeplaceatsea.TheUnitedStatesiswellequippedinthisregard,withsignificantcoastline.AccordingtotheCentralIntelligenceAgency’sWorldFactbook,theU.S.has19,924milesofcoastlineontwomajoroceans.TheU.S.alsooperatestheworld’slargestNavyfromdirectlycontrolledoralliedportsacrosstheglobe.393vesselsareregisteredinthe

U.S.merchantmarinefleet,thoughU.S.interestsownmanymore.liv

Factor Creation and Improvement Mechanisms Non‐endowedfactorscanoftenbeartificiallyestablishedandexistingfactorscanoftenbeimproved.Porternotes,“Well‐functioningmechanismsthatcreateandupgradefactorsprovidethefoundationforhigh‐orderadvantages”(Porter,2011,lc.9878).Thisappliestoinfrastructureaswellashumanandknowledgeresources.Theactualcompetitiveadvantagederivedfromfactorsdependsonhoweffectivelytheyaredeployed(Porter,2011,lc.2049).Overthelastdecade,sloweconomicgrowthandfederalbudgetsstrainedbyentitlementanddefensecommitmentshaveresultedinreducedinfrastructureinvestmentbybothprivateandpublicsectoragents.MuchconcernaboutAmerica’s“crumblinginfrastructure”hasappearedinthemedialvandithasbeenthesubjectofCongressionalhearings.lviIntervieweesindicatedthat,despiteappreciatingthisconcern,thecurrentU.S.infrastructureisentirelysuitablefortheneedsoftheirHOMfirms.ThisreportconcludesthattheU.S.infrastructureisverywellalignedwiththerequirementsofdevelopingHOMindustries.TheUnitedStatespossessesaverysignificantnationalcompetitiveadvantageininfrastructure.

The Aerospace and HOM Supply Chain TheMICaerospacesupplychainhastraditionallybeenviewedasaseriesof“Tiers”,theexactnumberofwhichvariesdependingonthedetailofthemodel.TheTier1supplieristhefinalor“PrimeContractor”(orjust“theprime”)responsibleforcompletesystems

26

integrationanddeliveryofacompleteandoperationalspacecrafttothegovernmentalclient:anationalspaceagencyormilitaryforce.TheTier1firmthensubcontractsmajorsubsystems,suchasengines,recoverysystemsornavigationsystems,tovariousTierTwosuppliers.Tiertwosuppliersrequireassembliesandsubcomponentssuchasmotors,pumps,wiringharnessesfromTierThreeandFoursuppliers,whoacquirebasichardwarelikegears,blades,circuitsandfastenersfromevenlowertiersuppliers.TheNewSpace,commercialfirmshave,ingeneral,retainedthisstructure10andutilizemostofthetraditionalsupplychaininparallelwiththeMIC.Figure6depictsthecurrentstateoftheSpaceSupplyChainwithexamplesofoutputproductsproducedateachtier.

UntiltheemergenceoftheNewSpaceindustries,innovationintheU.S.aerospacesupplychainhadbeenlimitedbygovernmentalregulationaimedatachievingextremelyhighdegreesofreliability.Requalificationcostshaveresultedinsystemsthatareessentiallyunchangedandunimprovedineitherperformanceorefficiencyformanydecadeswhichmakesdifferentiationonanycriteriaotherthancostdifficult.CostadvantagesinmatureproductsaregenerallyachievedbyscaleandthenaturalresultisamarketrifewithMonopoly,OligopolyandMonopsony(Davidian,2012).Suchamarketlacksthreatsofnewentrants,sufficientcompetitionand

10ItisnotablethatScaledCompositeschristenedthedevelopmentprogramthatresultedinthefirstcommercialhumanspaceflightas“TierOne”inhomagetothisconvention.

motivesforcooperationaswell.Whiledetailedspecificationsensureabaselineofquality,innovationanddeliveryspeedsufferfromthelackofcrediblethreats.Asimilarsituationispresumedtoexistinallgovernmentallydominatedspaceindustrialbases.Whilewehavenotidentifiedanyspecificsurveysofthecommercialhumanorbitalsupplychain,therehavebeenafewreportsthatarecloseparallels.A2012reportproducedbytheTaurigroupofAlexandriaVirginia,analyzedtheU.S.militarysatellitesupplychain.Tauri’sreportwaspreparedaspartofasector‐by‐sector,tier‐by‐tier(S2T2)surveyoftheU.S.industrialbasefortheDeputyAssistantSecretaryofDefenseforManufacturingandIndustrialBasePolicy(MIBP).Thisreportimportantlyidentified17“atrisk”technologiesinthemilitarysatellitesupplychain.Asummaryoftheseconcernsareincludedinthisstudyunder“areasofconcerns.”

27

Figure 6. The Space Supply Chain

The Commercial HOM Supply Chain Thecommercialspace/NewSpacesupplychainvariesfromthetraditionalaerospacechainbyremovingthedetailedqualificationrequirements.Thisisachievedeitherbyremovingthegovernmentasacliententirelyorbyrequiringthegovernmenttoassumetheroleofatraditionalconsumerofservicesratherthanthatofasystemdesigner.Inanimmaturemarket,lackingadominantdesignsandstandardorganizationalforms,awidevarianceofstrategiesarelikelytobeobservedinsupplychainmanagementasfirmssearchforsatisfactoryefficiencies.Ofthethreeprimarylaunchvehiclemanufacturesweseeonethatisextremelyverticallyintegrated(SpaceX)andtwohaveaggressivelypursuedoutsourcing(ULA,OrbitalSciences).Atthemomentthenumberoforbitalspacelaunchesperyearismeasuredinthe

dozensandthenumberofhumanratedspacecraftisamerehandful.Supplychainmanagersfindthatinsuringthetimelydeliveryofhighlyspecializedcomponentswithexactingtolerancesattheseverylowvolumesisachallenge.Vendorsarehesitanttoprioritizesuchlowvolumeworkatanyreasonableprice.InanefforttocontrolqualityanddeliveryratesSpaceExplorationTechnologies,hasbroughtmoreandmoredevelopmentin‐houseandproducesthevastmajorityoftheirownmajorassembliesthemselves.TheHawthorneCaliforniastartupdevelopsengines,fueltanks,capsules,rocketbodies,fairings,recoverysystems,electronics,softwareandevenspacesuitsforitsFalcon9launchvehicleandDragonspacecraftin‐house.Conversely,UnitedLaunchAlliance,aconsortiumfoundedbyaerospacegiantsBoeingandLockheedMartintooperatetheirlegacyDeltaandAtlaslaunchvehicles

28

hassoughttoaggressivelyreducedcostsviaoutsourcing.ULAoutsourcesasignificantportionoftheirAtlasVlaunchvehicle,includingtheentirefirststageRD‐180enginesystemfromRSCEnergomash.OrbitalScienceshasalsosoughtcostadvantagethroughoutsourcingitsfirstandsecondstageenginestospecialistsAerojetandATKrespectively.

U.S. HOM Spacecraft TheU.S.currentlypossessesnooperational,flightdemonstratedhumanratedspacecraft,eithercommercialorgovernmental.TherearethreemajorcommercialsystemsunderdevelopmentaspartofNASA’sCCDEV/CCiCapprogramandonewell‐fundedindependenteffort.DragonriderSpaceXhasmadesignificantprogressonDragonrider,aspacecraftbasedonitssuccessfulunmanneddragoncargovehicle.DreamChaserSierraNevadaCorporationiscurrentlyflight‐testingtheDreamChaser,areusableorbitalspacecraftdesignedtosurmountanynumberofverticallaunchsystem,immediatelytheULAAtlasV.SNChashasalsoannouncedcooperationwithEuropeanSpaceAgencyandmaylaunchDreamChaserfromtheArianelaunchvehicles.lviiTheDreamChaserisdirectlyderivedfromtheNASAHL‐20liftingbody,whichwasaprototypeCrewEmergencyReturnVehicleinspiredbythedesignoftheRussianBOR‐4prototype.11CST‐100Boeing’scommercialspacegroupisdevelopingtheCST‐100orbitalcapsulefor

11TheBOR‐4,itselfwasinspiredbyearlierU.S.liftingbodyprototypessuchasprojectDynasoar.

verticallaunchvehicles.IntheirCCiCapproposal,BoeinghasspecifiedtheULAAtlasVandnoteditsproventrackrecord.TheyhavealsoindicatedthecapsulecouldbelaunchedbytheSpaceXFalcon9inthefuture.TheBoeingcapsulefeaturesaclamshelldesignforeasycrewandmaterialsloadingandacustomizableconfiguration.ItwillbecapableoftransportingacrewofseventotheInternationalSpaceStationoraBigelowhabitat.Orion/ Multi‐PurposeCrewVehicle(MPCV)UndertheSLSprogram,NASAhascontinueddevelopmentoftheOriondeepspacespacecraftoriginallyslatedforthecancelledConstellationprogram.ThecurrentiterationisknownasMPCVandisscheduledforanunmanned,orbitaltestflightin2014afterlaunchfromaULADeltaIVheavyrocket.12OtherSpacecraftProjectsofNoteBlueOriginisreportedlyplanstodevelopanorbitalhumanspaceflightsystemasafollow‐uptotheirNewShepardsub‐orbitalcraftcurrentlyunderdevelopment.U.S.basedVirginGalactichasawell‐developedsub‐orbitalspaceplaneprogramandhasconductedseveralsuccessfuldropandpoweredatmosphericflighttestsofitsSpaceShipTwocraftfromitsfullyoperationalWhiteKnightTwocarriervehicle.Itcurrentlyplanstoconductspaceflightsin2014andhasadditionalvehiclesinproductionatitssubsidiary,TheSpaceshipCompany.Virginhaspublicly

12TheDeltaIVisnothumanratedandisbeingutilizedforunmannedtestingofthecraftuntiltheSpaceLaunchSystemisavailable.

29

stateditsintenttopursuetheorbitalmarketinthefuture.XCORAerospaceofMidland,TexasiscurrentlymanufacturingitsfirstLynxsub‐orbitalspaceplaneandplansflightsby2015.ThisstudyconcludesthattheU.Sisdevelopinganumberofstrong,commercialcompetitorsinthespacecraftmanufacturingbusiness.WhiletheRussianSoyuzandtheChineseShenzhou(aSoyuzderivative)remainprovenvehicles,theircoredesignisantiquatedandtheyarenotlikelytobetechnicallyoreconomicallycompetitivewiththemodern,reusabledesignsemergingfromU.S.producers.Thecommitmentofthesenationstostate‐ownedsolutionslimitsthelikelihoodthataninnovative,competitivemarketforspacecraftwillemergeinthosenations.Despitetheimmediatelackofanoperationalvehicle,itappearsthattheUnitedStateswillverysoonattainaverysignificantnationalcompetitiveadvantage(+++)inhumanratedorbitalspacecraft.

U.S. HOM Launch Vehicles TheU.S.currentlyproducesfourcommercialoperational,flightdemonstratedlaunchsystemsthatarecapableofloftingahumanintoorbit.TwoofthesevehiclesareintheprocessofobtaininghumanratingfromNASA.TheU.S.spaceagencyisalsodevelopingagovernment‐designedsystem,whichmaypotentiallycompeteintheHOMmarket.ULAAtlasVUnitedLaunchAllianceiscurrentlypursuingahumanratingfortheAtlasVinresponsetodemandfromthecommercialspacecraftmarket.BoeinghaschosentheAtlasastheprimarylaunchvehiclefor

theirCST‐100capsule.SierraNevadahasalsoselectedtheAtlasastheinitallaunchvehiclefortheirDreamChaserspacecraft.BigelowAerospacehasselectedtheULAforthelaunchofitsspacehabitats.lviiiPreviouslyOrbitalScienceshadproposedutilizingtheAtlasVfortheirproposedPrometheusspacecraft.13SpaceXFalcon9SpaceExplorationTechnologiesiscurrentlypursuingahumanratingfromNASAfortheirFalcon9launchvehicleaswellsasfortheirDragonRidercapsuleundertheNASAcommercialcrew(CCDev/CCiCap)program.TheFalcon9/DragonRidercapsuleconfigurationisslatedforfinaltestingofitspadabort/LESsystemsin2014.Humanflightsareanticipatedin2015.lixSpaceXhasstatedtheirintentiontomaketheFalcon9areusablesystemwithfullyrecoverablefirstandsecondstagesmakingcontrolled,verticallandingsafterlaunch.ULADeltaIVUnitedLaunchAllianceisnotcurrentlypursuingahumanratingfortheDeltaIVorDeltaIVheavy.NASAhasstatedthattheCBCandRS‐68engineswouldrequireanumberofmodificationsforhumanrating.Theseincludecontrollingthehydrogen“fuelrichenvironment”atliftoffthatcouldposearisktohumanoccupants.OrbitalAntaresOrbitalScienceCorporationisnotcurrentlypursuingahumanratingfortheAntarestwo‐stagelaunchvehicle.TheyhavedemonstratedtheabilitytodelivertheirCygnuscapsuletotheInternational

13PrometheuswasdevelopedasaproposedHL‐20derivedliftingbodyforNASA’sCCDEVprogram.DevelopmentwasshelvedwhenOrbitaldidnotsecureafundedslotintheCCDEVprogram.

30

SpaceStationaspartofNASA’sCOTSprogram.TheCygnuspayloadcapacityandcapsulesizesuggestAntarescouldbecapableoflaunchingahumanorbitalvehicle.Orbitalhasnotedthattheirsystemmeets“stringenthuman‐ratedsafetyrequirementsforISSoperations.”lxSpaceLaunchSystemWhilethescopeofthisanalysisisrestrictedtothecommercialHOMmarket,itshouldbenotedthatNASAismovingforwardwithdevelopmentofanewmannedlaunchvehiclebasedonshuttle‐derivedtechnology.The“BlockI”SLSfirststageisslatedtousefourRS‐25LH2/LOXengineswithtwostrappedonsolidboosters.Futureplansforliquidmotorboostersareunderconsideration.ThesecondstagewillinitiallyuseasingleRL‐10LH2/LOXengine,whiledevelopmentcontinuesonanewJX‐2motor(alsoLH2/LOX).Althoughdelaysandbudgetoverrunsplagueditspredecessor,ConstellationthecurrentprojectedlaunchdateforanunmannedSLSmissionisin2017andthefirsthumanSLSmissionissetfor2021.lxiThisstudyconcludesthattheU.Spossessesanumberofstrong,commercialcompetitorsinthespacelaunchvehiclemanufacturingbusiness.WhiletheEuropeanAriane,RussianSoyuzandtheChineseLongMarchrocketsarewellprovenlaunchvehiclestheirstate‐owned/dominatedproducingfirmshaveneveroperatedinanunsubsidizedmanner.TheyalreadyfacesignificanteconomicdisadvantagesagainstthesatellitelaunchpricingmodelSpaceXiscurrentlyutilizing.lxiiItishardtoimagineanydisposablelaunchvehiclecompetingagainstafuturereusablelaunchsystemoncost.Acompetitivedomesticmarkethas

SpaceX,ULAandOrbitalhighlymotivatedtoconstraincosts.Despitetheimmediatelackofahumanratedvehicle,itappearsthattheUnitedStateswillverysoonattainasignificantnationalcompetitiveadvantage(++)inhumanratedorbitallaunchvehicles.

Significant Sub‐Systems and Assemblies Thefollowinglistof20significantsub‐systems,assembliesandsuppliesforSpacecraftandLaunchVehicleswasdevelopedintheinterviewprocess.Thosefollowedby“SSIG”wereanalyzedtogetherintheSpaceSpecialtyIndustriesGroupingandthosefollowedby“EIG”astheElectronicsIndustriesGrouping.Abort/EVS‐SSIGCommunications‐EIGComputers‐EIGDockingSystem‐SSIGElectronics(general)‐EIGEngines(propulsive)/RocketMotorsEnvironmental&LifeSupport‐SSIGConsumableFuelsandGassesLandingSystem‐SSIGNavigation&Guidance/AvionicsPayloadDeploymentSystem‐SSIGPlumbingandTubingPowerSystemsPressureandSpacesuits‐SSIGPropellantandEnvironmentalGasTanksReactionControlandManeuvering‐SSIGReentrySystem‐SSIGSensors‐EIGShielding(InSpace)‐SSIGStructure/Airframes‐SSIGThermalControlSystem‐SSIG

Rocket Motors / Engines RocketengineproductionhasalonghistoryintheUnitedStates,beginningwiththefundamentalworkoftheAmericanphysicistandinventor,RobertGodard,in

31

theearlytwentiethcentury.Godarddemonstratedthefirstliquidfueledrocketenginein1926.SignificantproductionofrocketenginesbeganintheU.S.followingtheSecondWorldWar.DevelopmentofenginesapplicabletoHOMwasdrivenbythedemandsofthemilitarystrategicmissileprogram,civilianspaceprogramandthelaunchmarketfortelecommunicationsandothercommercialsatellites.CurrentU.S.producersofliquidfueledrocketenginessuitablefortheHOMincludeSpaceXandAerojet‐Rocketdyne.XCORAerospaceisworkingwithULAtoproduceaninnovativepistonpumpmotorthatcouldbeusedintheupperstageoftheAtlasV.CurrentU.S.producersofsolidfuelrocketenginesincludeATKandAerojet.Spacelaunchvehiclesandrocketengineshavetraditionallybeensingleuse,non‐recoverableassets.Enginesthatareabletorestartafterstageorspacecraftseparationandcontrolthedescentofareusablelaunchvehiclestagepromiseasignificantcostreduction.SeveralU.S.firmsarecurrentlydevelopingrestartableandreusablerocketmotorsandlaunchvehiclesforbothsub‐orbitalandorbitalapplications.Thesefirmsinclude:XCORAerospace,MastenSpaceSystems,ArmadilloAerospace,BlueOriginSystems,andSpaceX.FirstStageEnginesTheSpaceXFalcon9usesnineMerlin1DenginespoweredbyRP‐1andLOX.TheMerlinengineisdevelopedandproducedin‐housebySpaceX.TheUnitedLaunchAllianceAtlasVfirststageisaRD‐180liquidmotorpoweredbyRP1andLOX.ULAhasoutsourcedthefirst

stageengineintheAtlasVtoRussia’sRSCEnergomash.TheULADeltaIVfirststageknownastheCommonBoosterCore(CBC)utilizesRS‐68produceddomesticallybyAerojetRocketdyne.TheDeltaIVheavyutilizesthreeCBCfirststagesinaconfigurationwithtwoassidemountedboosters.TheRS‐68utilizesLH2andLOXastheoxidizer.OrbitalSciences,AntaresusesasingleAJ26RP‐1/LOXengineinitsfirststage.Theseenginesare1970svintageSovietproducedNK‐33motorsremanufacturedbyAerojet.lxiiiUpper(2nd)StageEnginesTheU.S.hasalonghistoryinmultistagerockets.RobertGodardpatentedthefirstdesignformultistagelaunchvehiclein1914.TheSpaceXsecondstageutilizesasingleMerlinRP‐1/LOXengine.TheAtlasVsecondstageutilizesoneortwoRL‐10LH2/LOXengines.ULAhasbeenindevelopmentwithXCORAerospacetoutilizeanXCORpistonpumpinanewupperstageengine.TheDeltaIVsecondstageusesasingleRL‐10LH2/LOXengine.TheOrbitalSciencesAntaressecondstageisaCastor30solidrocketmotorproducedbyATK.MuchoftheU.S.rocketmotorsupplychainisdependentonRussianimports.Nonetheless,weseethatdomesticfirmsarecurrentlydevelopinganddeployingauniquelineoflowcost,modernrocketmotorsfeaturinginnovationslike

32

restarablilityandreusability.SpaceX’sMerlinengineappearstohavealreadysuccessfullyloweredspaceflightcostsandXCOR’spistonpumptechnologypromisestolowercostsonULA’supperstages.SpaceXproposestobuildamorepowerfulengine,capableofcompetingwithRussia’shigherperformanceclosed‐loopKeroloxmotors.U.S.rocketenginesfromfirmslikeSpaceXalsohavetheadvantageofadvancedgimbalcontrollxivfornavigation,whereastheRussianandChinesehumanlaunchvehiclesutilizeoldervernierrocketslxvforinflightcoursecorrection.ThisstudyconcludesthattheU.S.currentlylackssignificantnationalcompetitiveadvantageinrocketmotors,butiswellpositionedtoattainasignificantcompetitiveadvantage(++)inthenextfewyears.

Structures TheU.S.hassignificantexperiencewiththeproductionoflaunchvehiclestructures.AnumberoffirmshaveproducedlaunchvehiclestructuresforthemilitaryICBMandspacelaunchmarketsaswellasforNASAhumanexplorationprogramssinceProjectMercury.CurrentlyNewSpacefirmsULA,SpaceXandOrbitalproduceand/orintegratedomesticallymanufacturedfirstandsecondstagelaunchvehiclestructuresusingstateoftheartforming,constructionandweldingtechnologies.SpaceX(andpossiblyBlueOrigin)aredevelopingreusablethefirstreusablelaunchvehiclestructures.ThisstudyconcludesthattheU.S.,withitscomparativelydiverseandcompetitivemarket,possessesacompetitive(+)advantageintermsoflaunchvehiclestructures.

Space Specialty Industries Grouping (SSIG) TheUnitedStatespossessesadiverseandgrowingnetworkofspacespecialtyindustries,composedoftiertwo,threeandfourfirmsproducingawidevarietyofspacerelatedsystems,assembliesandcomponentsforsatellites,launchvehiclesandspacecraft.Theseincludesatellitebusses,dockingsystems;reentryandlandingsystems,spacesuits,environmentalandlifesupportsystems,andemergencycrewescapeandabortsystems.Thescopeofthisstudydoesnotpermitanin‐depthanalysisofeachproductandserviceindividually.WehavegroupedthemundertheheadingSpaceSpecialtyIndustriesGrouping(SSIG).TheMantabusinessdirectorywebsitelists206firmsunder“U.S.SpaceResearchandTechnologyCompanies.”lxviThisisclearlynotacomprehensivelistingastheColoradoSpaceCoalitionwebsitecompanydirectorycurrentlylists435spacetechnologyfirmsinthatstatealone.lxviiTheCaliforniaSpaceAuthoritylists121memberfirms.lxviiiManyofthesecompaniesareverysmall,privatelyownedconsultingfirmsandjobshopsthatproduceproductsorprovideservicesoncontractforfirmsinthetiersabovethem.Whilenocomprehensivedatabaseofallspacerelatedmanufacturingandservicesfirmswaslocated,itistheopinionofthisstudy’sauthors,supportedbyinterviewswithindustryexperts,thattheU.S.hassignificantlymorespacemanufacturingandservicefirmsthananyothernation.Intervieweessuggestedthesesmallfirmsareoftenextremelyeffectiveforshort‐run,specializedmanufacturing.However,someintervieweesexpressedconcernabouttheabilityofthesesmallfirmstotransition

33

fromone‐offmanufacturingtoarate‐of‐productionmodelsufficienttosupportarapidlygrowingNewSpaceindustry.Challengesfacingsmallersuppliersincludetheirlackofaccesstofinancing,lackofexperienceinscalingproduction,andlackofexperienceinmanagingrapidgrowth.ThisstudyconcludesthattheU.S.possessessignificantcompetitiveadvantage(++)inspacespecialties.

Electronics Industries Grouping (EIG) TheUnitedStatespossessesadiverseanddevelopednetworkofelectronicdesignandassemblyfirmsmakingspace‐ratedelectronicsgearforsatellites,launchvehiclesandspacecraft.Theseincludesensors,computers,andcommunicationssystems.Nocomprehensiveindustrydatabasededicatedtospace‐ratedelectronicswasfound,thoughinterviewsandonlinesearchessuggestthattherearehundredsofU.S.firmsoperatingintheseindustries.Thebroadercommercialandconsumerelectronicsindustrysupportsthespacespecialtysupplychain.TheUNComtradedatabasereportsthatfortheUnitedStatesexported$41billioninelectroniccomponents(SITC776)and$42billionintelecommunicationsequipment(SITC764)in2012.TheU.S.importedover$212billionofelectroniccomponents(776)inthesameyear.ThistradeimbalancereflectssignificantlossofU.S.electronicsmanufacturingtoAsiaoverthelasttwodecades.Continuederosionofdomesticcapabilitythreatensthesupplychainforspacespecificelectronics.ComtradereportsChina’s2012exportofelectroniccomponents(776)was$82billion,orroughlydoublethatoftheU.S.

ThisstudyconcludesthattheU.S.possessescompetitiveadvantage(+)inspace‐ratedelectronics.

Navigation, Guidance, Avionics TheUnitedStatesisaworldleaderinspace‐navigation,guidanceandavionicssystems.TheU.S.militarydevelopedGlobalPositioningandAmericanfirmsbuiltanddeployedthefirstGPSconstellation.TheUnitedStatesGPSremainsthestandardforglobalnavigationandthemostrobustoperationalnavigationalsatelliteconstellation.AdditionallyU.S.firmshaveexpertiseininertialnavigationlxix,lxx,magneticnavigation,stellarnavigationandguidancesystemslxxi.U.S.firms,likeMicrosemi,haveyearsofexperienceproducingspace‐rated,radiation‐hardenedsolutionsspecificallyforsatelliteandspacecraftinboththegovernmentalandcommercialsectors.lxxiiThesesystemscombinedwithcommunicationsgearanduserinterfacesconstitutetheavionicspackageforanaircraftofspacecraft.Themilitaryandcommercialaircraftavionicsbusinessisasupportingindustryforspace‐ratednavigationandcommunicationssystems.U.S.firmslikeGeneralElectricandHoneywelllxxiiiareworldleadersinthisfield,oftenthroughtheacquisitionofsmallerinnovatingfirms,bothdomesticandforeignlxxiv.ThisstudyconcludesthattheU.S.possessessignificantcompetitiveadvantage(+++)inNavigation,GuidanceandAvionics.Pressure Tanks TheUnitedStatespossessesamatureanddiversepressurizedstorage,transportand

34

fueltankindustry.IBISworldreportsthattheindustryhad2012revenuesof$7.8billion.lxxvThecommercialandmilitaryaerospacesupplychaincontainsmanyfirmscapableofproducingmetallic,linedcompositeandmorerecentlyfullycompositefuelandoxidizer(ormonopropellant)tankssuitableforHOMlaunchvehicles.lxxviPressuretanksarealsousedforthestorageofenvironmentalgassesaboardspacecraftandspacestations.TheUNComtradedatabasereportstheU.S.asthethirdlargestexporterofmetalcontainersforstorageortransport(SITC692)with8.6%ofglobaltradevolumein2012.ThisstudyconcludesU.S.possessescompetitiveadvantageinpressuretanks(+).

Plumbing TheU.S.possessesasophisticatednetworkofindustrialpipeandtubingfabricators.Again,thecommercialandmilitaryaerospacesupplychaincontainsmanyfirmscapableofproducingthespecializedandcomplextubingneededforfuelingandcoolingHOMlaunchvehicles.ThegeneralindustrialsupplychainofmetalandplastictubingsupportsthesespecializedproducersTheUnitedNationsInternationalMerchandiseTradeStatistics(Comtrade)databasereportstheU.S.isthe2ndglobalexporterofplastictubesandfittings(SITC581)with11.2%ofworldtradein2012.Inmetaltubes(SITC679)theU.S.exported7.2%oftheglobalvolume.ThisstudyconcludesthattheU.S.possessessignificantcompetitiveadvantage(++)inlaunchvehicleandspacecraftplumbing.

Power AmericahassignificantexperienceinspacecraftpowersystemsandseveralU.S.firmsprovidepowergenerationanddistributionsystems.FuelcellsandSolarPhotoVoltaic(PV)panelsandhavebeenthestandardforpowergenerationonhumanorbitalspacecraft.U.S.researchandmanufacturerspioneeredbothtechnologies.Americamaintainsasignificantpresenceinfuelcellmanufacturing.lxxviiU.S.firmssuchasBoeing‐SpectolabandEmcoreproducehighperformanceandreliablespaceratedsolarpanels.However,theU.S.manufacturingbaseforcommercialground‐basedsolarpanels,whichisimportanttosupportingtheoverallsolarPVmaterialsupplychain,hasbeennearlylostinrecentyears.lxxviiiLithium‐ion(L‐ion)batteriesareincreasinglytheshort‐termpowerstoragemediumofchoiceforspacecraftandlaunchvehicles.TheU.S.lacksdomesticproductivecapacityforthesebatteriesinthecommercialandconsumermarket.lxxixAsawhole,thisstudyconcludesthattheU.S.holdsacompetitiveadvantage(+)inpowersystems.

Systems Integration Thecombinationofspacecraft,launchvehicles,payloadsandfacilitiesintoroutineHOMspaceflightoperationspresentsanimportantengineering,logisticalandbusinesschallenge.U.S.firmshavesignificantexpertiseinsystemsintegrationformannedandunmannedvehicles.Withmorehumanlaunchesandagreatervarietyofvehiclesthananyothernation,U.S.firmshave

35

gainedmoreexperienceinrealworldintegration.AnumberofNewSpaceintegrationfirmshavealsoemergedtoprovidepayloadintegrationservicesinthesub‐orbitalrocketindustry.Asawhole,thisstudyconcludesthattheU.S.holdsasignificantcompetitiveadvantage(++)insystemsintegration.

U.S. Orbital Destinations TheHOMmarketimpliesthathumanspaceflightparticipantstransportedtoorbitwouldhaveadestination.TheU.S.currentlyoperatestheInternationalSpaceStation(ISS,or“station”)inconjunctionwiththegovernmentsofRussia,theEuropeanUnion,Japanandothers.Asnoted,severalspacetouristshavevisitedtheISS.BigelowBigelowAerospaceisdevelopinginflatablehumanratedorbitalhabitatsbasedontechnologyacquiredfromNASA.BigelowhaslaunchedunmannedscalemodelsoftheirstructuresfortestingandNASAhasagreeda$17.8millioncontractwithBigelowtoimplementaBigelowExpandableActivityModule(BEAM)ontheInternationalSpaceStation.lxxxBigelowplanstolaunchindependentinflatablespacestationsformarketsincludingspacetourism,R&D,andforeignastronautcorps.lxxxiBigelowhasreservedlaunchspaceonbothSpaceXandULAlaunchvehiclesandhasbeenpartneringwithBoeingonusingtheirCST‐100forhumantransporttothestation.AlthoughhavingonlyasinglecompetitorintheU.S.orbitaldestinationindustryissuboptimaltherearenosimilarlycrediblysupportedventuresoutsidetheUnitedStates.ThisstudyconcludestheUnited

Stateshassignificantcompetitive(++)advantageinorbitaldestinations.

Fuels

Bipropellant Liquid Fuels RocketPropellant1(RP‐1)RocketPropellant1isahighlyrefinedkerosenefuelderivedfrompetroleum.Removalofimpurities,particularlysulfur,isimportanttoitspurity.TheU.S.oilproductionandrefiningindustryismatureandasnotedearlierisrobustlyexpanding.RP‐1productionissimilartojetfuelproductionandrelatedtoautomobilegasolineproduction.IntervieweesreportnoconcernwiththedomesticproductioncapacityofRP‐1.However,itappearsthatalloperatorsobtaintheirRP‐1fromtheDefenseEnergySupportCenter(DESC),adivisionoftheU.S.governmentDefenseLogisticsAgency.AreviewofGSAawardsforRP‐1suppliessuggeststhatJohannHaltermann,Ltd.lxxxii,AKAHaltermannSolutions,holdsamonopolyonthisproduction.HaltermannislocatedinHouston,TexasandisadivisionofMonumentChemical.MonumentisaprivatelyownedfirmheadquarteredinIndianapolis,Indiana.LiquidHydrogen(LH2)Hydrogengascanbeproducedandmanufacturedbyseveralmethodsandthenliquefied.Themostefficientandmostcommonmanufacturingmethodisthesteam/catalyticreformingofmethane(naturalgas).Thisprocessisassociatedwithgasproducedasaby‐productoftherefiningprocess.lxxxiiiRefinersarealsoagrowingconsumerofhydrogen,utilizingthegastocomplywithEPArequirementstoreducesulfuremissions.lxxxiv

36

TheU.S.hasabundantsuppliesofnaturalgas.TheU.S.EnergyInformationAdministration(EIA)rankstheU.S.fourthinprovengasreservesat334trillioncubicfeet.lxxxvThecommercialsuccessofhydraulicfracturinghasgreatlyincreasedAmericansupplies(from224trillionft3in2009)anddrivendownthecosts.ThispromisesabundantAmericansuppliesofhydrogenanddecliningcosts.Hydrogenistraditionallytransportedfromlargeproductionfacilitiesbytruck,whichincreaseseconomiccostsandcreatesapotentialsupplybottleneck.AnewgenerationofsmallsteamreforminggeneratorsfacilitatestheproductionofHydrogenatconsumingfacilities.lxxxviHydrogencanalsobeextractedfromwaterviaelectrolysiswheresufficientsuppliesofelectricityareavailable.Sustainablehydrogencanbeproducedwithsolarorwindgeneratedelectricity.TechniquestoextracthydrogenfrombiomasshavealsobeendemonstratedbyU.S.basedresearchers.lxxxviiTheEIAreportsthatU.S.hydrogenproductioncapacityexceeds3billioncubicfeetperdaylxxxviii,whichissufficienttofillover56,000U.S.SpaceShuttleexternaltanksdaily.14Productionisgrowingrapidly.AirLiquidereportstheymorethandoubledtheirU.S.productionbetween2004and2009.lxxxix

Bipropellant Oxidizers LOXistheonlyoxidizerusedbyidentifiedsuppliersoftheHOMmarket.MoreexoticoxidizershavebeenidentifiedinthesatellitelaunchbusinessandNitrousOxide

14TheSpaceShuttleSuperLightweightTankhadacapacityof52,881ft.3

(N2O)hasbeenutilizedinhybridenginesforthesuborbitalmarket.N2Oiscommonlyusedinavarietyofindustrialandconsumerapplicationsandtherearenoapparentsupplyconstraints.ThisanalysiswillberestrictedtoLOX.LiquidOxygen(LOX)CommercialoxygenmanufacturingviaatmosphericextractionisamatureU.S.industry.Liquidoxygenisisolatedfromairviacryogenicdistillation.OxygenisusedinalargenumberofindustrialprocessesintheU.S.includingceramics,metallurgy,weldingandchemicalproduction.Themedicalandenvironmentalcontrol(wastewater,coalgasification)industriesarealsomajorconsumersofoxygen.CombinedU.S.oxygenandhydrogenproductiongenerated$8.5billioninrevenuesfor2012.xcMonopropellantSolidFuelsSolidfuelrocketsmotors(SRMs)havecommonlybeenusedasstraponboosterstoliquidfueledfirststages.BoththeSpaceShuttleandtheproposedSpaceLaunchSystemutilizethisconfiguration.ThoughnocommercialHOMvehicleiscurrentlyplannedtoutilizesolidfuelboosters,theOrbitalAntareslaunchvehicleusesasolidmotorinitssecondstagetoboosttheCygnuscapsuletotheISS.TheSLSdesigninitiallycallsforsolidboosters.ItisreasonabletoconcludethatsolidboosterscouldbeincludedinfutureHOMcommerciallaunchvehicles.TheU.S.hasalonghistoryofproducingsolidrocketmotors.ThemarketisdominatedbyATKCorporation,whichappearstoholdamonopolyonorbitalclassboosters.AmmoniumPerchlorate(AP)isthemostcommonsolidrocketfueland

37

currentlytheonlyproducerofAPisWECCOofUtah.Thissinglesourceissueisanotableareaofconcern.HybridSolidFuels–Currentlytherearenoorbitallaunchvehiclesorspacecraftinproductionthatusehybrid(solid+liquid/gas)motors,thoughsuchmotorshavebeenutilizedinthesuborbitalmannedspaceflightmarketandtheycouldconceivablebeusedasboostersinanHOMvehicle.Thetypicalfuelsaresyntheticrubberorhydroxyl‐terminatedpolybutadiene(HTPB).Thesematerialsdonotappeartobeconstrained.InertUllageGasses–Chemicallynonreactivegases,suchasheliumandnitrogenarepressurizedtoforceliquidfuelsintothecombustionchamberandtofillvacantspaceinthefueltank.NitrogenisthemostcommoncommercialgasproducedintheU.S.Heliumisproducedinlargequantitiesforanumberofcommercialandconsumerproducts.Bothareavailableinquantityfromanumberofcompetitivedomesticsources.Thesegassesarenotsupplyrestrained.ThisstudyconcludesthattheUnitedStatespossessescompetitiveadvantage(+)intheproductionoffuelsandoxidizers.VI.RelatedandSupportingIndustriesForfirmsinthecommercialhumanorbitalmarket,relatedandsupportingindustriesareparticularlyimportant.Withonlyahandfulofmannedspacelaunchesoccurringinagivenyear,HOMvehiclesrepresentrelativelysmalldemandyethaveveryspecializedproductionrequirements.Addinginunmannedlaunches,themarkethasremainedlimitedtolessthana

hundredorbitalflightsperyearforthelasttwodecades.Supportingmarketsarerequiredtosustaintheirsupplychain.

Military and Commercial Aerospace Allintervieweesagreedthatthemilitaryaerospaceindustryandthecommercialaviationandsatelliteindustriesarecriticaltotheexistenceoftheirsuppliersinthecommercialspacecraftindustry.TheUnitedStatesaerospaceindustrystandsfaraboveallothernationsinbreadthanddepthofitsdevelopment.A2010OECDreportontheglobalaerospacemarketrankedtheU.S.#1in“valueaddedbyaerospaceindustry”at$66billion.TheUKandGermanycameinsecondandthirdwithjustover$8billioneach.Halfofthetop20firmslistedinthereportwereAmerican,includingthreeofthetopfourfirms.xciU.S.aerospacecontributesverysignificantlytonationalcompetitiveadvantage(+++)intheHOMs.

Governmental Space Exploration TheUnitedStateGovernmentalSpaceExplorationprogramunderNASAhasbeenamajordriverofbasicresearchanddevelopment,education,infrastructuredevelopment,aerospaceemploymentandaerospacemanufacturingcapacity.Sinceitsestablishmentin1957NASAhasspentapproximately$500billion.xciiThisisfarinexcessofanyothernationalspaceprogram.The2012NASAbudgetallocationwas$17.7billion.TheincreasedRussianspacebudgetannouncedfor2013is$7.9billion,aheadofChinaandonparitywithEurope.xciiiU.S.governmentalspaceexplorationcontributesverysignificantlytonationalcompetitiveadvantage(+++)intheHOMs.

38

Automobile Theautomobileindustrialsupplychainwasalsomentionedbythemajorityofintervieweesasbeingcriticaltothecommercialspacebusiness–eitherdirectlyforcommercialspacecraftorasabiggerclientfortheirsuppliers.Theautomobilesupplychainsupportstheproductionofmanybasicmaterialsincludingmetals,electronics,fabrics,pressurehosesandchemicals.ItadditionalprovidessomedirectcomponentstoNewSpacefirms.TheU.S.hasamature,robustandcompetitiveautomobileindustry.U.S.firmsproduceover17millionvehiclesperyear.AccordingtotheInternationalOrganizationofMotorVehicleManufacturers,theUnitedStateswasthesecondlargestproducerofmotorvehiclesbycountin2013.GeneralMotorsistheworld’ssecondlargestautomobilemanufacturerbyvolumeandFordrankedfifth.xcivSignificantqualitycompetitorsexistinJapanandEuropeandChinesefirmshavecapturedalargepieceoftheverylow‐endmarketvolume.TheU.S.automobileindustrycontributestonationalcompetitiveadvantage(+).

Personal Computer and Internet EntrepreneursfromthePersonalComputerandInternetindustrieshavedemonstratedaparticularenthusiasmforestablishingandfundingNewSpacecommercialventures.BillionsofdollarsofwealthgeneratedfromprevioussuccessinthePCandInternetindustrieshasflowedintoNewSpace.Continuedrevenuesfromthoseindustriesareimportanttothecontinuedgrowthanddevelopmentofthesefirms.

SignificantNewSpaceentrepreneursandtheirPC/Internetfirmsinclude:SpaceX:ElonMusk,PayPalStratoLaunch:PaulAllen,MicrosoftBlueOrigin:JeffBezos,Amazon.comPlanetaryResources:EricSchmidt&LarryPage,GoogleU.S.multinationalfirmssuchasApple,Microsoft,HPandDellhavedominatedtheglobalpersonalcomputingbusinesssinceitsinceptioninthelate1970s.EconomicallysignificantforeigncompetitorsremaingenerallylimitedtoAsianfirmscompetingonpriceinthecommoditycomputermarketandspecializedsoftwarefirmsfromEuropeandAsia.HP,DellandAppleaccountedfor61%ofU.S.domesticPCshipmentsin2013and32%ofglobalshipments.AmericanPCfirmsarefocusedonthehigher‐endofthemarketcapturingdisproportionaterevenuesandprofits.A2013reportbyAsymconotesthatU.S.basedApple,isbyfarthemostprofitablePCmanufacturerintheworld,capturingafull45%ofglobalPCprofitsforitselfin2012.DellandHPaddedanother20%,bringingtheU.S.totaltoatleast65%.xcvWhile,productionofnearlyallU.S.PCshasbeenoutsourcedtoAsia,theadvantageofthesupportingrelationshipinthisspecificcaseisreturnsoninvestmentnotmanufacturingcapacity.SuchreturnsgenerallyaccruetostockholdersregardlessofproductionlocationanddisproportionallybenefittheU.S.DespitethesignificantgrowthofChineseInternetfirmswithinthe“GreatFirewall”oftheirdomesticmarket,U.S.firmssuchasGoogle,Amazon.com,andFacebook

39

continuetodominantglobalInternetmarkets.Ina2013calculationofmarketvalueU.S.companiesGoogle,Amazon,andeBayweretopranked.U.S.firmsenjoyedacombinedmarketvalueofmorethanthreetimesthatoftheirglobalcompetitors.xcvi

TheU.S.hasverysignificantnationalcompetitiveadvantage(+++)inthePCandInternetindustries.Figure7summarizingthisanalysisoftheU.S.HOMrelatedindustriesinamodifiedPorterstyleclusterchart.

Figure 7. HOM Cluster Chart

VII.FirmStructureandRivalryAsnotedearlier,firmsintheUnitedStatesenjoyssubstantialeconomicfreedomandtheU.S.businessclimateisrankedasrelativelycompetitive.Thegovernmentisstableandtheruleoflawissecure.BusinessformationisrelativelyeasyandtheAmericanmodelofcorporategovernancehaslongbeenthestandardfortheworld.Accesstocapitalanddebtfinancingisrobust.

SpaceexplorationandsuccessinaerospacehasbeenimportanttoU.S.nationalprestigesincethe1950s.TheU.S.governmenthasdemonstratedasustainedcommitmenttotheprivatizationofspaceactivitiesanddevelopmentofacommerciallaunchindustry.Whilethespacemarketisfarfromperfectlycompetitive,theU.S.marketisnearlyfreeofthestateownedenterprisesthatdominatecompetingnations.OurinterviewssuggestagrowingsenseofhealthymarketrivalrypervadesthedomesticNewSpaceindustries.

40

Industry Geographic Clusters Industryclustersspurinnovationthroughreadyexchangeofideas,materials,facilitiesandpersonnel.Asthetechnologyindustrymaturesintomanufacturing,productionefficiencyisimprovedbyshortingsupplychains.Figure8showsnascentNewSpaceindustryclustersintheU.S.Themapdepictstotalandfailedfirmsofsignificance.TheSouthernCaliforniacluster,withaconcentrationaroundMojave,CaliforniaandthegreaterLosAngelesarea,nowcomprisesatleast13significantlivefirms.ThisincludesleadingHOMcompetitorSpaceX,inHawthorne.DenverColoradohaslongbeenthecenterofaverysignificantclusterofspacesuppliersassociatedwiththeUniversityofColoradoandColoradoStateUniversity.A

growingclusterofNewSpacefirmshasdevelopedintheareaandeffortsareunderwaytocreateaspaceportnearDenverInternationalAirport(DIA).xcviiSeveralfirms,includingOrbitalSciences,arealsolocatedneartheWashingtonDCareaforaccesstoNASAHQ,DOD,MARSandpotentialgovernmentclients.Texashasalonghistoryasagovernmentalspacecenter.ThestateandmunicipalgovernmentsofTexashasbeenaggressivelyrecruitingNewSpacefirmsfromCaliforniaandColorado.SpaceXconductsengineandlowaltitudeflight‐testingthere.BlueOriginhasestablisheditsflightoperationsinthestate.ThereisalsoanefforttoestablishaspaceportoutsideofHouston.xcviii

Figure 8. New Space Clusters (Total, Failed Firms) 15

15Thedesignationoffirmsas“NewSpace”or“significant”isinvariablyamatterofjudgmentonthepartoftheauthors.Thecriteriaappliedwerethatthatfirmsorcorporatedivisionsoperateinafee‐for‐service(notcostplus)marketandpossessrevenue,employeesorapermanentphysicallocation.

41

VIII.ChanceandGovernmentPorteridentifiestwoforcesexternaltothediamondmodelthatinfluenceindustrycompetitiveness:chanceandgovernment.ChanceThefutureoutcomesofchancearebydefinitionunquantifiable.Thepastinfluenceofchanceincludesthealreadydocumenteddistributionofbasicresourceendowments.ItmightalsobenotedthatthecommercialHOMmarketisdevelopingatatimethatappearstobemostfortuitousforAmericanfirms.However,thisishighlycoincidentalwiththeincreasingcapabilitiesandmediaattentiongarneredbythesuccessoftheseemergingfirms.GovernmentTheU.S.governmenthasofficiallysupportedcommercialactivityinspacesincetheenactmentoftheCommercialSpaceLaunchActof1984xcix,whichwasintendedto“facilitatecommercialspacelaunches”andtolimittheregulationoflaunchesincompliancewithinternationaltreaties,insuranceofpublicsafetyandtheinterestsofnationalsecurity.ThisactdirectedtheDepartmentofTransportation(DOT)toestablishanexecutiveagencytohandleallcommercialspacelaunchlicensingandactivities.TheFAA’sOfficeofCommercialSpaceTransportationcurrentlymaintainsthisrole.Congresshasrepeatedlyreinforceditssupportforcommercialspacelaunch.The1990LaunchServicesPurchaseActcrequiredtheuseofcommercialvendorswhenappropriate.The1998CommercialSpaceActcisought“toencouragethedevelopmentofacommercialspaceindustryintheUnitedStates”.Humanflightwasaddressedwiththe2004Commercial

SpaceLaunchAmendmentsActciidesigned“topromotethedevelopmentoftheemergingcommercialhumanspaceflightindustry.”SeveralU.S.statesandmunicipalitieshavesoughttofacilitatecommercialspaceoperationsintheirjurisdictionsbylimitingliabilityorextendingtaxwaiversorothersubsidies.ThegovernmenthasalsobeenarepeatedimpedimenttoU.S.privatefirms.Nationalsecurityandpublicsafetyinteresthavecreatedanextremelyregulatedbusinessenvironment.AgeneralsensedevelopedamongNewSpacefirmsthatthismarketturnsthenormsofU.S.governanceonitshead,inthat,spacelaunchactivitiesareassumedtobeprohibitedunlesstheyareexplicitlypermitted.Cooperationwithinternationalcustomers,partnersandsuppliershasbeentroubledbygovernmenttraderestrictions.(SeethesectiononITAR).IX.AreasofConcernThefollowingareissuesimpactingU.S.nationalcompetitiveadvantagenotedbyintervieweesasconcerns,identifiedduringindustryanalysis,ornotedinpreviousreports.

Concerns Raised by Interviewees or Noted During Analysis

ITAR and Trade Restrictions NoareaofthespaceindustrialbaseismorecontroversialthantheexportrestrictionsonU.S.spacetechnologyundertheInternationalTrafficinArmsRegulationregime(ITAR).CallsforITARreformhavebeenproliferatingforyears.ciiiBasedonanecdotalobservation,thevastmajorityofcommercialspaceexecutivesfeelthatITAR

42

undulypunishesU.S.firmsintheglobalmarketplaceandstimulatesforeigncompetitors,particularlyinregardstosatellitemanufacturing.Ithasalsobeencitedasacomplicationinaccessingtheglobalsupplychain.Inparticular,thishasinvolvedtheneedforsharingdesigninformationtofacilitatetheintegrationofmajorforeignassembliesintoU.S.vehicles.InregardstoITAR,a2012AerospaceIndustriesAssociationpaperstates,“Ifwecontinueonthispath,withoutimplementingtherightreforms,ournationrisksthescenarioofaweakenedspaceindustrialbasethatisunabletofullymeetU.S.nationalsecurityneedsorsustainourtechnologicaledgeagainstforeigncompetitors.”civU.S.spacefirmsaregenerallyverysupportiveofgenuinenationalsecurityanddefenseinterests.WeheardacallforamorepracticalinterpretationofwhattechnologiesaretrulystrategicandactuallyprotectableundertheunilateralcontrolofU.S.policyaswellasfordifferentiatingmoreclearlybetweenhostileandnon‐hostileforeignsuppliersandcustomers.Theanalysisofthisstudyalsonotesthatthereisapotentialupsideinrestrictionsonforeignsuppliersandpartnershipsinfosteringanascentindustryanddevelopingstrongdomesticcustomers.Reservingtheworld’slargestspacecustomer(theU.S.government)andmostsignificantcommercialmarketwillproduceshort‐termcompetitiveadvantagefordomesticfirms.Similarindustryspecifictradeprotections(formalandinformal)havebeenverysuccessfullyimplementedbymanydevelopingnations,notablythe“Asiantigers”tosecurefootholdsinstrategicindustriesformerlydominatedby

theU.SandEurope.ThecollapseofmanyU.S.strongtechnologyindustries(e.g.electronicsmanufacturing,chipfabrication,solarpanelproduction)competingunderafreetrademodelinthefaceofheavilyprotectedforeigncompetitorsshouldnotbeunderstated.Thetraditionaltradecorrectionmechanisms(bilateralnegotiations,counter‐sanctions,WTOcomplaints)havebeentooslowandnon‐responsivetodefendU.S.firms.SuccesswithU.S.complaintfilingsoftencomeslongaftertheAmericanfirmhaseithercollapsedoroffshoreditsproductiontothecompetingnation.Porteracknowledgesthissuccessoftheprotectioniststrategyincases,butstronglycautionsthatsustainedprotectionofdomesticindustriesengendersdependency,stiflesinnovation,makesdomesticproductslesscompatiblewiththeglobalmarketandproducesweakercompetitorsinthelong‐term(Porter,2011:lc.13361).

Small Shop Suppliers Thebottomtiersoftheaerospacesupplychaincontainmanysmall,independentshopsthatproduceitemsincludingmachinedmetalpartsandwiringassemblies.Thismodelhasworkedwellforanindustrythatproducesrelativelyfewcopiesofunique,custompieces.Intervieweesexpressedconcernwiththeabilityoftheirsmallpartssupplierstomeetproductionschedulesandmaintainqualityinthetransitionfromlow‐volumespecialtyproductiontoarate‐basedmodel.Engineersandmachinistswithexperienceinverylargeaerospacefirmsoftenestablishthesesmallbusinesses.Limitedaccesstocapitalanddebtaswellaslackofexperiencewiththemanagementofhigh‐

43

growth,mid‐sizebusinessescanbeachallengeinscalingtheseoperationseffectively.

Supply of Senior Aerospace Engineers Intervieweesexpressedconcernwiththesupplyofmanagement‐qualifiedengineers.Thecyclicalnatureofthespaceanddefenseindustrieshascreatedanaerospaceworkforcethatisnotablymature.cvManyengineersbegantheircareerduringtheheydayofthespaceraceinthe1960sandearly70s.Theyarenowapproachingretirement.Thelayoffsofthepost‐Apolloperiodinducedrelativelyfewyoungerengineerstoreplacethem.Whilenewengineersarenowjoiningtheindustrythereisagapinengineersaged30to50whowouldnormallyfillmanagementpositions.

Supply of Skilled Production Workers IntervieweesexpressedsomeconcernthatageneraldeclineinU.S.manufacturingcapacitydrivenbyoffshoringofsuchworkhasresultedinalackofexperiencedyoungmachinists,CNCoperatorsandproductionengineers.

U.S. Military Budget Cuts ThemilitaryaerospaceindustriesareextremelyimportanttothesharedaerospacesupplychainthatfeedstheHOMandotherNewSpaceindustries.ThevolumeofdemandfromimmatureNewSpacefirmsaloneisinsufficienttosupporttheoperationofmanylowertiersuppliers.Thesesuppliersrequireadditionalcustomersandformostofthem,militaryprojectsaretheirmainstaybusiness.ContinuallyshrinkingfederalbudgetshaveplacedsignificantpressureontheU.S.DepartmentofDefense.Apermanentdeclineinthedefenseaerospaceindustriesisassumed.Thisisagrowingconcernforthesupplychain.

Additionally,militaryR&Dhaslongbeenanimportantsourceofinnovationforcommercialaerospacebusinesses.Jetengines,radarandtheglobalpositioningsystemareexamplesofmanyspinoffsfrommilitaryinvestmentthatarecriticaltothecommercialsector.ThemilitaryalsoprovidesNewSpacefirmswithimportantinfrastructureincludingtheGPSconstellationandlaunchsites.

Inconsistent Government Support ManyNewSpaceadvocateshavenotedthatpoliticalconflictsandapparentregionalfavoritismhaveresultedinunpredictablebudgetingforprogramsexecutedundertheCommercialSpaceActAgreements.Specifically,whilethePresidenthasadvocatedfullfundingoftheCCDev/CCiCapprograms,forcesintheU.S.Congresshavesoughttoderailthatfundingeachyear,oftentomaintainworkatNASAcentersorproductionfacilitiesintheirdistrictsorstates.Budgetnegotiationsdragonformonths,andplaceNewSpacefirmsinanenvironmentofdemanduncertainty.ThisuncertaintycreatesbusinessriskthatislikelytodissuadeinvestmentinU.S.spacefirms(Autry,2013).ItwasalsonotedthatdevelopmentoftheSLSsystemeffectivelyestablishesastate‐ownedlaunchservicesenterprisethatwillcapturegovernmentcrewopportunitiesthatprivatefirmsmightotherwiseexploit.Worse,withtheSLSlackingaspecificmissiongoalandfacingevertighterfederalbudgets,theprogrammaychoosetofillitsmanifestandjustifyitsoverheadbycompetingwiththeprivatesectorforthecommerciallaunchesintheHOMs.Introductionofalargegovernmentalcompetitorintoanascentmarketcreates

44

anextremelyundesirableeconomicsituation.

Governmental Market Distortions Disrupt Clustering TheU.S.politicalsystemhaslongfavoredspreadingNASAResearchCenters,grantsandcontractawards,acrossmultiplestates.Amajorreasonforthisistheefforttosecurebroadcongressionalsupportforfederalspaceprogramsthroughthecreationoflocaljobs.ThishasresultedinaspaceinfrastructurethatisinefficientlydistributedacrosstheUnitedStateswithlongsupplychainsandlogisticalinefficiencies.Ithasalsoimpededthenaturalformationofindustryclusters,whichasnotedearlierareimportantsourcesofnationalcompetitiveadvantage.IntheNewSpaceenvironment,thevariationinstateregulatoryenvironmentsandtheintentionaluseofstateandmunicipalsubsidiestolureNewSpacefirmsintonewareasimpedestheorganicorganizationoffirmsintonaturalclusters.AnotableexampleistheplannedrelocationofXCORAeropsacefromthemajorNewSpaceclusterinMojave,CaliforniatoanisolatedlocationinMidland,Texas.XCOR’sdevelopmentatMojavewasanoutcomeofnaturalclustering,beingoneofthefirmsbenefitingfromthedistributionofemployeesofthefailedRotaryRocket.XCORCEO,JeffGreason,hascitedbothCalifornia’sburdensomeregulatoryenvironmentandincentivesfromMidlandasinfluentialtothismove.cviAnumberofstatesandmunicipalitiesacrossthecountryhavesettheirsightsoncapturingNewSpacefirmstotheirtechnologydevelopmentzonesorproposedspaceportswithtaxincentivesor

outrightsubsidies.Whilepotentiallybeneficialforthesejurisdictions,thedistributiveeffectreducesoverallU.S.nationalcompetitiveadvantage.Thesignificantvariationbetweenstatesinregardstolabor,environmentalandsafetyregulationsalsothreatenstodisruptclusterformation.California,thelocationofthedominantNewSpacecluster,isoftenlistedasamongtheleast“business”friendlystatesintheUnion.cviiIthasbeennotedaspossessingparticularlyinflexibleemissionsregulations,whichimpedeenginetestingandaDivisionofOccupationalSafetyandHealth(Cal‐OSHA)thatduplicatestheburdenoftheFederalagency(OSHA).WhiletheUnitedStatesenterstheNewSpaceerawithasignificantnascentclusterinSouthernCalifornia,theU.S.isatacompetitivedisadvantageinsustainingclustergrowthwhencompetingagainstnationspossessingmorehomogenoustaxandregulatoryregimesandthosethatstrategicallyplanindustryclustering.Specifically,Chinacviiihasimplementedgovernment‐directedindustryclusteringwithgreatsuccessandobtainedworlddominatingcompetitiveadvantageinseveralindustries(Navarro,2011).ItshouldbepresumedthatifChinachoosestopursueacommercialapproachtotheHOMindustriesitwouldfollowasimilarstrategy.

Critical Supply Chain Elements from China ThisstudyhasidentifiedtwocriticalsupplychaincomponentsinwhichtheU.S.isdependentonChina:REEsandSolarPanels.ChinahasalreadydemonstrateditswillingnesstodisrupttheflowofREEstotradingpartnersinresponsetoaminordisputeinvolvingasinglefishingvesselimpoundedbyJapan.Thisincident

45

impactedtheJapaneseelectronicsandautoindustrysupplychains(Navarro&Autry,2011).GivenChina’sincreasinglycompetitivegeopoliticalpositionvs.theU.S.andthepotentialforeitherbilateraltradedisputesorcounter‐entanglementsinseveralgrowingregionalterritorialconflicts16,thesituationposestheriskofasupplychaininterruptionforlowertierU.S.HOMspacecraftsuppliersinanumberofassemblies.ThisplacesU.S.HOMmanufacturersatrisk.

Rare Earth Elements Untilthelate1990s,theMountainPassmineinCaliforniaproducedmorethan80%oftheworldsupplyofREEs.ExtremelyaggressiveextractionandpricingbyChinesestateownedfirmsintheearly2000sresultedinclosureoftheMountainPass.AmericanindustryisnowentirelydependentonimportedREEsupplies(Navarro&Autry,2011).Currentmineowner,Molycorp,reportsthatitisnearlyreadytoresumeproductionatMountainPassunderitsProjectPhoenixPhaseIeffort.However,thefullproduction,PhaseIIeffort,appearstobestalledduetodecliningREEprices.cixWithmorethan90%ofglobalREEmarketheldbyChina,U.S.HOMfirmsaresubjecttoasupplychainriskwithvarietyofelectronicandnavigationassembliesaswellascomponentsutilizinghighpowered

16TheU.S.andChinahaveengagedinvaryinglevelsofdirectandproxyconflictregardingtheKoreanPeninsulaandtheTaiwaneseStraightssincethe1950s.TensionhasalsodevelopedintheEastandSouthChinaSeas.U.S.andalliednavalvesselshavehadrecentincidentswithChinaininternationalwatersandinareasclaimedbyJapanandthePhilippines.

magneticcoupling,sensorsandspecializedmetalalloys.

Solar Panels Domesticoralliedproducersofspecialized,spacegrade,solarpanelassembliesrequirearobustsupplychain,whichtheirrelativelysmallindustrydoesnotsupport.Thissupplychainissignificantlysupportedbytherelatedcommercial,landbasedsolarpanelmanufacturingbusiness.ThemajorityofthatindustryandmuchofitsrelatedsupplychainrelocatedtoChina.In2012,theU.S.produced3%ofcommercialPVsolarmoduleswhileChinaproduced64%.cxEventuallymultinationalfirmsarelikelytomovesolarR&Dinvestmentsclosertothesourceofproduction,puttingtheAmericantechnologicaladvantageatrisk.

Counterfeits and National Security ThedominanceofChinaasasupplierforelectroniccomponentsisanissueforreasonsofqualitycontrolandnationalsecurity.Counterfeitorcompromisedcomponentshavefoundtheirwayintothemilitaryandspacesupplychains.cxi,cxiiFearingqualityorsecuritycompromisesinfromcomponents,intervieweesnotedtheymakespecialeffortstomaintaina“Chinafree”supplychain.Russian Engine SupplyTheU.S.andRussiahaveenjoyedseveraldecadesofsuccessfulcooperationinspace,includingconstruction,operationandsupplyoftheISS.RussiaiscurrentlytheonlysourceofcrewtransportservicesforNASAandhasincreasinglysoughtbusinesssupplyingU.S.spacemanufacturerswithavarietyofprovenmaterials,componentsandassembliesdevelopedbytheSovietandRussianspaceagencies.

46

Russianbuilt,closed‐loopKeroloxengineshavelongprovidedhigherperformanceinasmallerpackagethancomparableU.S.Kerosenebasedengines.cxiiiRD‐180rocketmotors–producedbystate‐ownedNPOEnergomashunderajointpartnershipwithRocketdynecalledRD‐AMROSS–haveproventobeaveryreliablefirststageenginefortheULAAtlasVandhavesignificantlyreducedcostsforthatvehicle.However,advocatesofafullydomesticoralliedmilitarysupplychainhaveexpressedskepticismofthismodel.SincetheriseofthePutinregime,tensionshaveoccasionallyflaredbetweentheU.S.andRussia.OnAugust27,2013Russia’sRTNewsreportedthatRussia’sSecurityCouncilwasconsideringhaltingtheexportofRD‐180engines.cxivThoughnoofficialconnectionwasmade,thetimingwashighlycoincidentalgiventhelowpointinU.S.‐Russianrelationsatthetimecxv(tensionsoverSyriaandEdwardSnowden.)Bufferingagainstasupplyinterruptionordelay,ULAmaintainsasignificantinventoryofengines.Twoormoreyearshasbeensuggestedinnewsreports.cxviTheeventualdomesticproductionofRD‐180typeengineshasalsobeendiscussedasasolution.ULAisalsopreparedtotransferunmannedlaunchestoitsDeltalaunchvehicle.WhiletheDeltaisnothumanrated,itcouldconceivableacquirethisrating.cxviiAsimilarissuemayexistwiththeAerojetAJ26motorcurrentlyusedinthefirststageoftheOrbitalSciencesAntareslaunchvehicle.TheAJ26isbasedonremanufacturedSovietNK‐33motorsshippedfromRussia.Withalimitedsupplyoftheseengines,OrbitalhassoughtaccesstotheRD‐180supplyaswellasrequesting

resumptionofproductionoftheNK‐33inRussia.ThisenginedependencyonRussiaposesapotentialriskofamajorsupplychaininterruptionforU.S.HOMlaunchvehiclemanufacturers.

Solid Rocket Motors SomeintervieweesnotedtherehasbeengeneralconcernwiththeSolidRocketMotor(SRM)supplychain.SeveralDODandCongressionalreportshavealsohighlightedtheshrinkingSRMindustrialbase.Specifically,reducedopportunitiesinthelargeSRM(40in.+)marketduetothelackofdevelopmentofanewU.S.launchsystems.U.S.ICBMprogramshavenotseenanewmissiledevelopedindecades(MinuteManIIIcirca1968andTridentD5circa1987).Additionallycancellationofthekineticinterceptorprogram,retirementoftheSpaceShuttleandcancellationofNASA’sAreslaunchvehiclereducedopportunitiesforSRMproducers.Between1995and2004,thenumberofprimecontractorsforSRMsshrankfromsixtojusttwofirms,withonlyATKandAerojetcurrentlyproducingSRMsintheU.S.cxviiiFurther,theonlyNorthAmericanmanufacturerofAmmoniumPerchlorate(AP),theprimarySRMfuel,isaWECCOplantinUtah.cxixWECCO,adivisionofAmericanPacificCorporation(AMPAC)hadafatalexplosionatthissitein1997.In1988thePEPCONdivisionofAMPACwascompletelydestroyedinamajorAPproductionaccidentthatkilled3andinjuredover300.cxxDespiteWECCOsimprovedsafetyrecordoverthelastdecade,dependenceonasingledomesticplantrepresentsasignificantsupplychainriskforHOMfirmsthatutilizeSRMs.

47

Inthisregard,theNASAmannedexplorationprogram,whichcontinuesuseoftheSpaceShuttlederivedSRMboostersinSLS,constitutesasignificantsupportiveindustryforthecommercialspacesupplychain.

RP‐1 Supply Chain RP‐1/LOXappearstobeemergingasthe“fuel/oxidizercombinationofchoice”forcommercialorbitallaunchvehicles,particularlyinfirst‐stageengines.SpaceX,ULAandOrbitalhaveallstandardizedonthispropellantmix.ThenationalsupplychainforRP‐1appearstobebothadistributionandproductionmonopoly.OurreviewindicatesthattheDefenseEnergySupportCenter(DESC),adivisionoftheU.S.governmentDefenseLogisticsAgency,isthesoledistributorandJohannHaltermann,Ltd.adivisionofMonumentChemical,istheonlyproducer.Itappearsthatthereisonlyoneproductionfacility,locatedinHouston,Texas.Monopoliespresentasupplyrisk,anationalsecurityrisk,repressinnovationanddecreaseeconomicinefficiencythroughlackofcompetition.Industriesthatdevelopindomesticmonopoliesarelesscompetitiveininternationalmarkets(Porter,2011).Inafreeglobaltraderegime,thismonopolywouldreduceU.S.nationalcompetitiveadvantageinHOM.However,itshouldbenotedthatRP‐1suppliesincompetingnationslikelytobegovernmentalmonopoliesofbothproductionanddistribution.

Concerns Noted by Other Studies

Tauri Group Report on Space Industrial Base Several“technologyriskareas”werenotedina2012paperentitledTrendsandDynamicsintheLowerTiersoftheU.S.SpaceIndustrialBasepresentedtotheAIAASPACE2012ConferencebyDolgopolov,Maliga&SmithoftheTauriGroup.ThatpaperreportedontheinsightsfromasignificantstudyproducedforDeputyAssistantSecretaryofDefenseforManufacturingandIndustrialBasePolicy(MIBP)byTauri.TheTaurireportlistsbothnewriskareasandthoseidentifiedbyproceedingstudies.AlthoughthescopeoftheTauristudywasbroader(encompassingtheentireU.S.spaceindustrialbase),withalternatefocus(specificallyexaminingsatellitelaunchsystemsandmilitaryobjectives),intervieweesagreedthattheoverlapoftechnologyinlaunchessystemsandspacecraftissignificantenoughtoranktheseasareasofconcernforU.S.nationalcompetitiveadvantageinHOM.Tauriconcernsincludedtheitemslistedbelow.SpacequalifiedSolarCellGlasscoversandSolarOpticalReflectorsHigh‐energyradiationdetectors(Cadmiumzinctelluride)AmmoniumPerchlorateforsolidfuelrocketmotors(previouslydetailed)Spacequalifiedelectronicsubcomponentsincludingpotentiometers,opticalencodersandtravelingwavetubes

48

Spacequalifiedmechanicsforlaunchvehiclesincluding:Harmonicdrivetransmission,torquerods,andsliprings.RayonbasedcarbonclothphenolicAdditionaldetailscanbefoundintheaforementionedTauripublication(Dolgopolov,Maliga&Smith,2012)andthe2012DepartmentofDefenseAnnualIndustrialCapabilitiesReporttoCongress,whichincorporatethefindingsofthatstudy.Furtherinformationcanbefoundinthe2011presentationentitledU.S.IndustrialBaseAnalysisforSpaceSystemspresentedatthe2011DefenseManufacturingConference.cxxiX.ConclusionsTheconclusionofthisstudyisthattheUnitedStatesholdsaverysignificantcompetitiveadvantageinHumanOrbitalSpaceflightMarkets.Rarelyhasanationheldsucharichlyappropriatecombinationofresources,skill,experienceandinfrastructureinthefaceofnewindustryemergence.ThefourdeterminantsofthePorterdiamondmodelaremutuallyreinforcingintheU.S.HOMindustries.U.S.firmshavetheadvantageofacaptivecustomerinthegovernmentcrewtransportationbusiness,whichconstitutesthesinglelargestopportunityintheHOMmarket.Further,U.S.firmsenjoya“homefield”advantageindomesticdemandfromthelargestnationalmarketofcorporateandindividualconsumers,aswellassubstantialnationalcredibilityintheglobalmarket.

Asthisstudyhasshown,theU.S.isendowedwithnearlyeveryappropriatenaturalresourcerequiredtosupportavibrantHOMindustrialbase.Accesstoothersisathandthroughglobalmarketswithfriendlytradingpartners.TheU.S.alreadypossessestechnologicalsuperiorityinnearlyeverysignificantspacecrafttechnology17andispoisedtogaininseveralareas.TheU.S.highereducationsystemiscapableofsupportingthedemandsoftheHOMindustries.TheUnitedStateshasanentirelysufficientnationalinfrastructureforHOMactivitiesaswellasauniquelydiversesetofvaluablespacespecificfacilitiesandassets.TheU.S.federalgovernmentissupportiveofmakingthesefacilitiesavailableforprivateuse.StateandlocalgovernmentsareactivelydevelopingsupportinginfrastructureforNewSpaceoperations.TheAmericanbusinessenvironmentiswellsuitedtodevelopingstrongHOMcompetitors.Capitolandfinancingareabundant;presuminginvestorsandlenderscanbeconvincedoftheviabilityoftheHOMindustries.TheU.S.hasastrongadvantageinanumberofindustriesthatsupporttheHOMsupplychain.PortermightsuggestthattheUnitedStatesisactuallytoowellendowed,lackingthesortofselectivefactordisadvantagesthatdriveinnovationthroughtheattempttoovercomesomeimportantyetsurmountableshortcoming.(Porter,2011:2218).AtpresenttheabsenceofsuchachallengedoesnotappeartobeimpedingAmerica’sspaceentrepreneurs.

17WiththenotedexceptionofrocketengineperformanceheldbyRussia’sclosed‐loopkeroloxsystems.

49

AcknowledgementsTheauthorswishtothankthefollowingorganizations:CommercialSpaceFlightFederation,OrbitalSciencesCorporation,SierraNevadaCorporation,SpaceExplorationTechnologies,UnitedLaunchAlliance,andXCORAerospace.(Thisacknowledgementdoesnotattributeanyspecificstatementsorpositions,nordoesitimplyanendorsementofthisstudyoritsconclusionsbyanyorganization,firmorindividual.)

50

Appendices

A. Common Space Acronyms AP–AmmoniumPerchlorate,aprimarysolidrocketfuelCBC–CommonBoosterCore(RS‐68engine/1ststageDeltaIV)COTS–CommercialOrbitalTransportServices,aprogramfundedbyNASAtospurreliableprivatere‐supplyservicestotheISS.SpaceX,OrbitalSciencesarefundedCOTSparticipantswhichhavecompleteddemonstrationflights.CCDEV–CommercialCrewDevelopmentProgram,aNASAprogramsupportingthedevelopmentofindependentfeeforserviceorbitalspaceflightfirmscapableoftransportinggovernmentcrewtoandfromtheISS.BlueOrigin,Boeing,Paragon,SierraNevada,ULA.CCiCap–CommercialCrewIntegratedCapabilities,the3rdphaseoftheCCDevSpaceprogramsundertheSpaceActAgreement.SierraNevadaCorporation,Boeing,andSpaceXhaveareparticipants.CCtCap–CommercialCrewTransportationCapabilityContract,AFAR(traditionalFederalAcquisitionsRegulationcontract)basedextensiontoCCDev/CCiCap.ISS–TheInternationalSpaceStationITAR‐InternationalTrafficinArmsRegulationregime,exportcontrolsonmunitionsincludingmostrocketandspacetechnologyLES–LaunchEscapeSystemLH2–Liquidhydrogenusedasarocketfuel.LOX–Liquidoxygenusedasanoxidizerinrocketengines.N2O–NitrousOxideusedasanoxidizerinhybridrocketmotorforsuborbitalflight.RP1–Highlyrefinedkeroseneusedasarocketfuel.SLS–SpaceLaunchSystem,thecurrentNASAmannedspacecraftandlaunchvehicledevelopmentprogram.SRM–SolidRocketMotorULA–UnitedLaunchAlliance,theassemblerandoperatoroftheDeltaandAtlaslaunchvehicles.

51

B: Note on Citing of e‐Books Electronicbooks(e‐books)havebeenreferencedinthispaper.Followingwhatarebelievedtobecurrentbestpracticesinadevelopingfield,andinkeepingwithrecommendationsfromtheModernLanguageAssociation(MLA),guidelines5.7.1818,specifice‐bookreferenceshavebeencitedwithchapternumbersratherthanpagenumbers(e.g.Corbin&Strauss,2008:Ch.9).Additionally,wherepossible,KindleLocationnoteshavebeenaddedtochapternotations(e.g.Corbin&Strauss,2008:Ch.9,Lc.2707,indicatingChapter9andKindlelocation2707).

18http://www.mla.org/style/handbook_faq/cite_an_ebook

52

ReferencesAutry,G.(2013).ExploringNewSpace:GovernmentalRolesintheEmergenceofNewCommunitiesofHigh‐TechnologyOrganizations.PhDdissertation,UniversityofCalifornia,Irvine.BureauofLaborStatisticsGlossary,online,accessed10/20/13,http://www.bls.gov/bls/glossary.htm#LChristensen,C.(1997).Theinnovator'sdilemma:whennewtechnologiescausegreatfirmstofail.Cambridge:HarvardBusinessPress.Davidian,K.(2012)SpaceIndustrialBase.PresentationtoNASAInstituteforRocketPropulsionStudies,SeniorSteeringGroupMeetingJune12‐13.Davidian,K.,&DiPippo,S.(2013).AnOutlineoftheStudyGroup'Public/PrivateHumanAccesstoSpace'.IAC.Dolgopolov,A.,Maliga,K.,&Smith,P.(2012).TrendsandDynamicsintheLowerTiersoftheU.S.SpaceIndustrialBase.AIAASPACE2012Conference&Exposition.Pasadena:AIAA.Dubbs,C.&Paat‐Dahlstrom,E.(2011).Realizingtomorrow:Thepathtoprivatespaceflight.Lincoln,NE:UniversityofNebraskaPressFairlie,R.W.(2012).ImmigrantEntrepreneursandSmallBusinessOwners,andtheirAccesstoFinancialCapital.Washington:U.S.SmallBusinessAdministration.FutronCorp.(2002).SpaceTourismMarketStudy:OrbitalSpaceTravel&DestinationswithSuborbitalSpaceTravel.Harrison,GlennonJ.(2012).TheCommercialSpaceIndustryandLaunchMarket.CongressionalResearchServiceReportforCongress.R42492Navarro,Peter&Autry,Greg.(2011).DeathbyChina:ConfrontingtheDragon,aGlobalCalltoAction.UpperSaddleRiver,NewJersey:PrenticeHallPorter,M.E.(2008).Competitiveadvantage:Creatingandsustainingsuperiorperformance.NewYork:SimonandSchuster.Porter,M.E.(2011).CompetitiveAdvantageofNations:CreatingandSustainingSuperiorPerformance.NewYork:SimonandSchuster.

53

Szafran,R.F.(2002).Age‐adjustedlaborforceparticipationrates,1960‐2045.MonthlyLab.Rev.,125,25.TauriGroup.(2012)SuborbitalReusableVehicles:A10‐YearForecastofMarketDemandPassel,J.S.,D'VeraCohn,G.B.A.,&Gonzalez‐Barrera,A.(2012).NetMigrationfromMexicoFallstoZero‐‐andPerhapsLess.PewResearchCenter.PISA,L.F.(2010).StrongPerformersandSuccessfulReformersinEducation.PISA(2012).WhatStudentsKnowandCanDo:StudentPerformanceinMathematics,ReadingandScience.OECD(2013)EducationataGlance,UniteStatesCountryNote.Skirbekk,V.(2004).Ageandindividualproductivity:Aliteraturesurvey.Viennayearbookofpopulationresearch,133‐153.Walker,C.D.(2006,November7).InterviewwithCharlesD.Walker.(S.Johnson,Interviewer)NASAJohnsonSpaceCenterOralHistoryProject.ihttp://data.worldbank.org/indicator/IC.BUS.EASE.XQiihttp://www.forbes.com/lists/2011/6/best‐countries‐11_land.htmliiihttp://rankings.ft.com/businessschoolrankings/global‐mba‐ranking‐2013ivhttp://www.spacenews.com/article/civil‐space/34107arianespace‐chief‐likely‐to‐take‐french‐space‐agency‐helm(accessed12/31/13)vhttp://www.thespacereview.com/article/375/1(accessed1/10/14)vihttp://www.usnews.com/news/articles/2013/01/31/regulation‐reform‐may‐help‐commercial‐spaceflight(accessed12/31/13)viihttp://www.incredible‐adventures.com/space‐survey/space‐adventurers‐survey.pdf(accessed1/2/14)viiiAggarwal,Barnum,Emigh,Nguyen,Tinker,WernersurveyconductedbyMBAstudentsworkingwiththisstudy’[email protected]://www.spaceadventures.com/index.cfm?fuseaction=news.viewnews&newsid=827(accessed1/4/14)xhttp://www.dailymail.co.uk/tvshowbiz/article‐2212535/Sarah‐Brightman‐outbids‐NASA‐join‐space‐expedition.html(accessed12/31/13)xihttp://web.archive.org/web/20100102213413/http://astronautix.com/craft/dsealpha.htmxiihttp://www.spacenews.com/article/end‐soyuz‐deal‐near‐nasa‐explores‐limited‐optionsxiiihttp://www.nbcnews.com/id/6640347/#.Un_1DKWLc8Mxivhttp://www.spaceref.com/news/viewpr.html?pid=18128xvhttp://blogs.nasa.gov/bolden/2013/04/30/post_1367334429451/

54

xvihttp://news.google.com/newspapers?nid=1817&dat=19780826&id=OkggAAAAIBAJ&sjid=‐p0EAAAAIBAJ&pg=5039,6208016xviihttp://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCgQFjAA&url=http%3A%2F%2Fwww.nasa.gov%2Fmission_pages%2Fasteroids%2Finitiative%2F&ei=19a‐UtOPIszrkAevwoHIDA&usg=AFQjCNFAcSftgUILqm7V4zcq6MOf537mCA&bvm=bv.58187178,d.eW0(accessed12/28/13)xviiihttp://www.nss.org/settlement/physicstoday.htm(accessed12/27/13)xixU.S.CensusPopulationClockaccessed11/10/13http://www.census.gov/popclock/xxCentralIntelligenceAgencyaccessed11/10/13https://www.cia.gov/library/publications/the‐world‐factbook/rankorder/2119rank.htmlxxihttp://online.wsj.com/news/articles/SB10001424127887323375204578270053387770718xxiihttp://online.wsj.com/news/articles/SB10001424127887323375204578270053387770718xxiiihttp://www.sba.gov/advocacy/7540/141841xxivhttp://refugeeandimmigrantnetwork.wordpress.com/2012/08/02/358/xxvhttp://www.nytimes.com/2012/04/24/us/mexican‐immigration‐to‐united‐states‐slows.htmlxxvihttp://www.popularmechanics.com/science/space/nasa/4318625xxviihttp://www.pbs.org/newshour/rundown/2013/11/chinese‐students‐boost‐us‐universities‐to‐all‐time‐high‐foreign‐enrollment.htmlxxviiihttp://www.cnn.com/2012/02/09/opinion/bennett‐stem‐education/xxixhttp://ieeexplore.ieee.org/xpl/login.jsp?tp=&arnumber=5752953&url=http%3A%2F%2Fieeexplore.ieee.org%2Fxpls%2Fabs_all.jsp%3Farnumber%3D5752953xxxhttp://cra.org/uploads/documents/resources/taulbee/CRA_Taulbee_CS_Degrees_and_Enrollment_2011‐12.pdfxxxihttp://cra.org/uploads/documents/resources/taulbee/CRA_Taulbee_CS_Degrees_and_Enrollment_2011‐12.pdfxxxiihttp://www.voanews.com/content/iea‐us‐worlds‐biggest‐oil‐producer‐by‐2016/1788573.htmlxxxiiihttp://www.rand.org/content/dam/rand/pubs/monograph_reports/MR1707/MR1707.ch3.pdfxxxivhttp://www.eia.gov/tools/faqs/faq.cfm?id=29&t=6xxxvhttp://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MOPUEUS2&f=Mxxxvihttp://www.cfr.org/oil/case‐allowing‐us‐crude‐oil‐exports/p31005xxxviihttp://www.eia.gov/conference/2013/pdf/presentations/powell.pdfxxxviiihttp://www.nma.org/pdf/economic_contributions.pdfxxxixhttp://www.bgs.ac.uk/downloads/start.cfm?id=1574xlhttp://minerals.usgs.gov/minerals/pubs/commodity/titanium/stat/xlihttp://agmetalminer.com/2013/04/03/why‐us‐tantalum‐imports‐and‐prices‐are‐skyrocketing/xliihttp://www.nytimes.com/gwire/2009/06/09/09greenwire‐imported‐minerals‐metals‐fuel‐us‐shift‐to‐home‐57275.htmlxliiihttp://seekingalpha.com/article/1106271‐molycorp‐the‐pain‐is‐herexlivhttp://www.ihdp.unu.edu/article/iwr/xlvhttp://www.thefinancialist.com/wp‐content/uploads/2012/10/2012‐GlobalWealthReport‐.pdf(accessed12/26/13)xlvihttp://www.forbes.com/sites/dalearcher/2013/09/04/could‐americas‐wealth‐gap‐lead‐to‐a‐revolt/(accessed12/26/13)

55

xlviihttp://media.bloomberg.com/bb/avfile/rxfIKJLQ7yMA(accessed12/26/13)xlviiihttp://www.usdebtclock.org/#(accessed12/25/13)xlixhttp://spaceportamerica.com/press‐release/nasas‐sl‐8‐rocket‐flight‐becomes‐spaceport‐americas‐20th‐launch/lhttp://www.stratolaunch.comlihttps://www.google.com/#q=nasa+wind+tunnel+test+dreamchaser(accessed12/26/13)liihttp://www.nbcnews.com/science/spacex‐wins‐nasas‐nod‐take‐over‐historic‐launch‐pad‐39a‐2D11741834liiihttp://www.wired.com/autopia/2012/05/the‐rocket‐factory‐spacex‐builds‐them‐from‐top‐to‐bottom/(accessed12/26/13)livhttps://www.cia.gov/library/publications/the‐world‐factbook/rankorder/2108rank.html(accessed12/26/13)lve.g.http://www.huffingtonpost.com/2011/07/27/transportation‐infrastructure‐cost_n_911207.htmllvihttp://www.jec.senate.gov/public/index.cfm?p=Hearings&ContentRecord_id=0a406522‐5fdd‐4bc6‐bda0‐a0741e5a3d24(accessed11/25/13)lviihttp://www.parabolicarc.com/2014/01/08/esa‐outlines‐cooperation‐sierra‐nevada‐dream‐chaser/(accessed1/8/13)lviiihttp://www.sunshinestatenews.com/story/nevada‐aerospace‐company‐aims‐floridalixhttp://www.nasa.gov/press/2013/july/nasa‐commercial‐crew‐partner‐spacex‐completes‐two‐human‐critical‐reviews/#.UqoI_qWLfRolxhttp://www.orbital.com/NewsInfo/release.asp?prid=869lxihttp://www.nasa.gov/exploration/systems/sls/eft1_ksc.htmllxiihttp://www.spacenews.com/article/spacex‐undercut‐competition‐clinch‐head‐turning‐iridium‐deal(accessed12/29/13)lxiiihttp://spaceflightnow.com/news/n1003/15nk33/lxivhttp://www.nasa.gov/offices/c3po/partners/spacex/index_prt.htm(accessed1/2/14)lxvhttp://www.spaceflight101.com/soyuz‐fg.html(accessed1/2/14)lxvihttp://www.manta.com/mb_34_G0295_000/space_research_and_technology(accessed12/29/13)lxviihttp://www.spacecolorado.org/companies‐projects/directory.aspx(accessed12/29/13)lxviiihttp://www.californiaspaceauthority.org/membership/membership‐list(accessed12/29/13)lxixhttp://virtualskies.arc.nasa.gov/navigation/4.html(accessed1/2/14)lxxhttp://www.honeywell.com/sites/aero/Inertial_Navigation_Products3_CC2561849‐4833‐AC45‐9714‐E381D2C8E291_H2F689D55‐70D9‐172D‐9672‐4BEB35100A5B.htm(accessed1/2/14)lxxihttp://www.spacewar.com/reports/Northrop_Grumman_Stellar_Navigation_System_Makes_Its_First_Flight_On_RC_135_Aircraft_999.html(accessed1/2/14)lxxiihttp://www.microsemi.com/documents/products/Microsemi_Space_Solutions.pdf(1/4/14)lxxiiihttp://www.honeywell.com/sites/aero/Avionics_Electronics.htm(accessed1/4/14)lxxivhttp://www.geaviation.com/press/other/other_20070504.html(accessed1/4/14)lxxvhttp://www.ibisworld.com/industry/default.aspx?indid=633(accessed12/30/13viaUCIVPN)lxxvihttp://www.compositesworld.com/articles/the‐markets‐pressure‐vessels‐2012(accessed12/22/13)lxxviihttp://www1.eere.energy.gov/hydrogenandfuelcells/pdfs/2012_market_report.pdf(accessed12/30/13)

56

lxxviiihttp://www.washingtonpost.com/business/the‐global‐market‐for‐solar‐cells/2011/12/16/gIQATywQyO_graphic.html(accessed12/30/13)lxxixhttp://www.fas.org/sgp/crs/misc/R41709.pdf(accessed12/30/13)lxxxhttp://www.nasa.gov/mission_pages/station/news/beam_feature.html(accessed1/2/14)lxxxihttp://www.space.com/19291‐inflatable‐alpha‐station‐bigelow‐aerospace.html(accessed1/4/13)lxxxiihttps://www.fbo.gov/index?s=opportunity&mode=form&id=d776bfdf8afabea49f5a2c2847c88519&tab=core&_cview=1lxxxiiihttp://www.eia.gov/oiaf/servicerpt/hydro/appendixc.htmllxxxivhttp://business.highbeam.com/industry‐reports/chemicals/industrial‐gaseslxxxvhttp://www.eia.gov/cfapps/ipdbproject/IEDIndex3.cfm?tid=3&pid=3&aid=6lxxxvihttp://www.us.airliquide.com/en/brochure‐and‐video‐library/on‐site‐hydrogen‐production‐1.htmllxxxviihttp://www.vtnews.vt.edu/articles/2013/04/040413‐cals‐hydrogen.html?utm_campaign=Argyle%2BSocial‐2013‐04&utm_content=shaybar&utm_medium=Argyle%2BSocial&utm_source=twitter&utm_term=2013‐04‐04‐08‐30‐00lxxxviiihttp://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=8_NA_8PH_NUS_6&f=Alxxxixhttp://www.us.airliquide.com/en/rss/california‐air‐liquide‐starts‐up‐hydrogen‐unit‐for‐cleaner‐fuels.htmlxcIBISWorldIndustryReport32512Oxygen&HydrogenGasManufacturingintheU.S..Retrievedviahttp://www.ibisworld.com/industry/default.aspx?indid=459xcihttp://www.oecd.org/sti/futures/space/48301203.pdf(accessed1/4/14)xciihttp://www.theguardian.com/news/datablog/2010/feb/01/nasa‐budgets‐us‐spending‐space‐travel(accessed12/24/13)xciiihttp://www.spacenews.com/article/civil‐space/35638russia‐boosting‐space‐budget‐to‐surpass‐china‐equal‐europe(accessed12/24/13)xcivhttp://www.oica.net/wp‐content/uploads/2013/03/worldpro2012‐modification‐ranking.pdf(accessed12/30/13)xcvhttp://www.asymco.com/2013/04/16/escaping‐pcs/(accessed12/30/13)xcvihttp://www.statista.com/statistics/277483/market‐value‐of‐the‐largest‐internet‐companies‐worldwide/(accessed12/30/13)xcviihttp://spaceportcolorado.com(accessed1/14/14)xcviiihttp://mashable.com/2013/09/11/houston‐spaceport/(accessed1/4/14)xcixhttps://www.govtrack.us/congress/bills/98/hr3942/text(accessed11/22/13)chttp://archive.spacefrontier.org/commercialspace/lspalaw.txt(accessed11/22/13)cihttp://www.nasa.gov/offices/ogc/commercial/CommercialSpaceActof1998.html(accessed11/22/13)ciihttp://www.faa.gov/about/office_org/headquarters_offices/ast/media/PL108‐492.pdf(accessed11/22/13)ciiihttp://csis.org/files/media/csis/pubs/021908_csis_spaceindustryitar_final.pdf(accessed12/27/13)civhttp://www.aia‐aerospace.org/assets/CompetingForSpaceReport.pdf(accessed12/27/13)cvhttp://www.popularmechanics.com/science/space/nasa/4318625(accessed1/4/13)cvihttp://www.thespacereview.com/article/2120/1cviihttp://www.forbes.com/sites/mikepatton/2013/03/31/the‐most‐and‐least‐business‐friendly‐states/(accessed12/27/13)

57

cviiihttp://blogs.worldbank.org/developmenttalk/china‐s‐special‐economic‐zones‐and‐industrial‐clusters‐success‐and‐challengescixhttp://www.molycorp.com/about‐us/our‐facilities/molycorp‐mountain‐pass/cxhttp://www.greentechmedia.com/articles/read/Yingli‐Gains‐Crown‐As‐Top‐Producer‐in‐a‐36‐GW‐Global‐PV‐Marketcxihttp://www.levin.senate.gov/newsroom/press/release/senate‐armed‐services‐committee‐releases‐report_on‐counterfeit‐electronic‐parts/(accessed12/30/13)cxiihttp://www.hq.nasa.gov/office/codeq/trismac/apr08/day2/hughitt_NASA_HQ.pdf(accessed12/31/13)cxiiihttp://www.spacenews.com/article/launch‐report/36232space‐propulsion‐development‐of‐us‐closed‐loop‐kerolox‐engine‐stuck‐incxivhttp://rt.com/news/russian‐rocket‐engine‐ban‐039/cxvhttp://www.thespacereview.com/article/2384/1(retrieved12/29/13)cxvihttp://www.spacenews.com/article/military‐space/37962military‐quarterly‐ula‐finding‐its‐stride‐in‐rocket‐production(accessed1/14/14)cxviihttp://www.spacenews.com/article/opinion/37019sn‐blog‐report‐of‐possible‐rd‐180‐ban‐could‐mean‐many‐things‐including‐nothing(accessed1/14/14)cxviiihttp://www.acq.osd.mil/mibp/docs/presentations/DMC_SRM_brief_Dec_09.pdf(accessed12/29/13)cxixhttp://apfc.com/CORP/wec.php(retrieved12/29/13)cxxhttp://www.lasvegassun.com/news/1997/jul/31/cedar‐city‐explosion‐kills‐one‐brings‐back‐memorie/cxxipreviouslyretrievedfromhttp://www.taurigroup.com/files/U.S._Industrial_Base_Analysis_for_Space_Systems.pdf(nolongeranactivelink)ContacttheTauriGroup,6361WalkerLane,Suite100 Alexandria,Virginia 22310.

Download - Analysis of Competitive U.S. Commercial Human Orbital ... · PDF filesupply chain supporting commercial human orbital spaceflight. We utilize a multi ... Porter Diamond Components

Top Related