Space: Stimulating Economic Growth Today and Tomorrow

253 Russell Senate Office Building Washington, DCJuly 27, 2009

Robert DickmanExecutive Director, AIAA

David LogsdonExecutive Director, Space Enterprise Council/ Techamerica

Edward MorrisExecutive Director of Strategic Business Development, ITT Space Systems

John PorterCEO, Astrogenetix

Saving lives on Earthby developing products in space

Company Overview

• Subsidiary of Astrotech Corporation (Nasdaq: ASTC)

• Astrotech (formerly SPACEHAB) has a 25 year heritage in space, sending science and cargo to microgravity

• Astrogenetix is a biotechnology company engaged in biomarker discovery and drug development utilizing microgravity

ISS Utilization

• In 2005 Congress passed law designating a portion of the International Space Station (ISS) as a National lab

• Astrogenetix entered into Space Act Agreement for use of the shuttle and ISS for its R&D activities

• Company’s activities have been designated National Lab Pathfinder (NLP) missions by NASA

Vaccine Development

• Discovered increased microbial virulence in microgravity

• Applied knowledge to develop space flight platform for identifying factors responsible for increased virulence

• This leads to viable targets for commercial vaccine development

• Speeds up development timeline

• Reduces cost for drug/vaccine development

Salmonella Development

• Salmonella vaccine target identified– Plan to seek Institutional Review Board (IRB) and submit an

Investigational New Drug (IND) application to FDA

MRSA Development

• Methicillan-resistant Staphylococcus aureus (MRSA)– Survey flight on Shuttle Discovery (STS-119)

– Additional research aboard Shuttle Atlantis (STS-125)

– Planned manifest aboard Shuttle Discovery (STS-128)

Pierre ChaoManaging Partner, Renaissance Strategic Advisors

Molly Macauley, Ph.D.Senior Fellow and Director, Academic Programs, Resources for the Future

Space and Economic Growth

Comments for “Space: Stimulating Economic Growth Today and Tomorrow – Current and

Future Impact of Space Technology and Development”

Senate Committee on Commerce, Science and Transportation

27 July 2009

Molly K. Macauley

Economic Growth• Defined and measured as output per capita overtime• Widely acknowledged as an imperfect definition and hard to measure• Often incorrectly equated with ‘number of jobs’

– Example: Increase jobs simply by replacing bulldozers with people and shovels but may not contribute to economic growth

– Example: Increase ‘high-skilled’ jobs but usually implies loss of other jobs; ambiguous outcome for growth

• As conventionally defined omits or only indirectly reflects value of:– public goods (for example, national security, freedom of expression,

Yellowstone and other national parks, research and development)– improvements or reductions in quality of public health and the environment– value of many benefits commonly attributed to space activities (for example,

as given in forthcoming NRC “America’s Future in Space” study: new knowledge, inspiration, ‘cultural enrichment,’ ‘strategic leadership’, ‘stewardship of earth’)

– Can tangle causality (growth may foster freedom of expression and vice versa)

• In short, may underestimate or overestimate ‘quality of life’

Redefine economic growth as ‘productivity’ or

‘vitality of the economy’• Easier to discuss what influences economic vitality• Influenced markedly by

– Technological progress• Defined as resulting from something in-between (Mokyr, 2005)(a) unexplainable (even ‘miraculous’) and (b) the ‘rational and purposeful application of R&D’ and ‘growth of

complementary human and physical capital’• Further defined as knowledge

– Institutions and governance (domestic and other countries’ markets, competition, cooperation; international trade; and restraints on these)

– Information (information itself, and the free flow of information)

Previous studies of the contribution of space activities to economic growth

• Summaries and references in: Reinventing NASA (CBO, 1994), Encouraging Private Investment in Space Activities (CBO,1991), The NASA Program in the 1990s and Beyond (CBO,1988), How Federal Spending for Infrastructure and Other Public Investments Affects the Economy (CBO,1991)

• Reinventing NASA (1994)– Management and procurement reform, new relationships

with the private sector, intragovernmental coordination and international cooperation

– The ‘breaking bow wave’ of an inadequate NASA budget for the coming decade

– Acknowledging different perspectives on the benefit of people in space

– The problem of cost overruns

Reinventing NASA (CBO,1994)• Findings related to short- and long-run economic growth

– “NASA’s spending does not have a uniquely large short-term effect on the US economy; all federal spending for goods and services tends to stimulate the economy temporarily, increasing growth and employment for a short time (unless at full employment)”

– “Under certain conditions, NASA’s expenditures could have a slightly larger or smaller short-run effect on the growth of the economy and on employment compared with federal spending overall

• Slightly larger - although still temporary - if concentrated in industrial sectors or regions with high unemployment

• Slightly smaller - and still temporary - if in industries with high value added per worker

• On balance, nothing suggests that unique aspects of NASA’s spending cause it to affect the economy differently from other types of federal spending for goods and services”

– ‘Multiplier’ effects (returns to the economy for every $1 spent) incorrectly model diffusion of NASA spending to be like that of R&D in health and agriculture

– ‘Spinoffs’ are a problematic measure because an alternative may have been devised, possibly at lower cost and sooner

– Not in the report, but additionally: Counting on spinoffs to justify investment is not a sound approach; can justify pretty much any investment on such a basis

Economic vitality: role of competition• Significantly less domestic competition within traditional aerospace industry

– Restricts government’s choices; few alternatives if government is not satisfied; limits government’s ability to reduce cost

– May lessen creativity and innovation that contribute to economic growth• Yes, if traditional industry prefers status quo and uses ‘rent-seeking’ (redistributes wealth

rather than creates it)• No, if healthy internal corporate R&D budget and ability to ‘appropriate’ return on a new idea

(therefore, have incentive to come up with a new idea)• Increase in opportunities from new people and ideas, outside of traditional

industry– Return to Lindbergh/Goddard era of risk taking, private wealth

• Response by government and traditional sector?– History of technological progress emphasizes that “protection of innovators and

entrepreneurs… [is] of central importance …” (Mokyr, 2005)– Some suggest NIH-like centers of excellence (see Major General James Armor,

comments at “A Day Without Space,” 16 Oct 2008)– Some suggest ARPA-S (forthcoming NRC report) – sort of “back to the future” since

part of DoD’s ARPA in 1958 was transferred to NASA in 1960

Economic vitality: role of international ‘coopetition’*

• Fortune Magazine, 1990s “100 Things America Makes Best” – communications satellites

• Now, “Buy America” advantages are much less clear for a host of space activities

• “Not made here” gives us more choice (consumers of space services benefit from international competition)

• What are ‘appropriate opportunities for international collaboration’ (charge to the Augustine II panel)

• …..And what are not – competition can be a very very good thing• Some guidelines

– “absolute advantage” and “comparative advantage” – “coopetition” – blending cooperation and competition as in practices of

multinational corporations* Luo, 2004

Economic vitality: role of information and

information infrastructureAn illustration at the intersection of the

Administration’s objectives for reshaping the nation’s energy markets and climate policy

Role of Earth observations data and ongoing R&D for how best to use them

– Renewable energy: in mapping and managing renewable energy resources (see CCSP, 2008)

– New roles for agencies: in supporting regulatory and statutory responsibilities (see Energy Independence and Security Act of 2007, Section 712)

– Informing climate policy and leveraging emerging (Europe) and possible (US, other) related markets (see H.R. 2454, The American Clean Energy and Security Act of 2009)

Two examples: GHG trading and offsets

Example 2: “offsets” and forest carbon

• Above-ground carbon– Tropical forests: 300 billion tons– Old-growth forests: 0.3 to 0.5 billion tons– Back-of-the envelope: about $44 billion (with CO2 trading

at $110/ton, 2008, European Climate Exchange) • Information leverages dollars. Earth observations

data are essential to inform carbon measurement and markets.

• From Sedjo, 2009. Note: Emergence of a forest-carbon market would change the supply of carbon credits and in turn influence carbon prices

Summing up • Conventional definitions of economic growth are widely agreed to be

imperfect– Space activities and many other activities may not contribute to

economic growth as formally defined– … or, they may not make an easily discernible contribution to it– … but the activities may be worth doing

• Economic vitality and productivity are a more useful means of expressing benefits and valued results– Then: we can frame decisions around, and even measure

• technological progress, • institutions and governance, and • information to better insure that we contribute to growth

• In promoting long-term economic vitality, how we carry out space activities is almost as important as what we do

References• Cookson, Clive. 2009. “NASA Dominates as Rivals Play Catch-Up,” Financial Times 16 July.• “A Day Without Space: Economic and National Security Ramifications,” US Chamber of Commerce and

George C. Marshall Institute, 16 October 2008, at http://www.marshall.org/pdf/materials/695.pdf• Luo, Yadong. 2004. Coopetition in International Business (Copenhagen, Denmark: Copenhagen Business

School Press).• Mokyr, Joel. 2005 “Long-Term Economic Growth and the History of Technology,” Chapter 17 in Handbook

of Economic Growth, Vol. 1B, Philippe Aghion and Steven N. Durlauf, eds. (Elsevier).• National Research Council. Forthcoming. America’s Future in Space: Aligning the Civil Space Program with

National Needs (Washington, DC: National Academies Press)• No author. 2001. “US Industry Consolidation: A Work in Progress,” Aviation Week and Space Technology 3

December 2001, pp. 50-51. • Sedjo, Roger. 2008. “Avoided Deforestation: How costly? How Powerful a Tool?” Draft working paper,

Washington, DC: Resources for the Future, 16 April.• US Climate Change Science Program (CCSP). 2008. Uses and Limitations of Observations, Data, Forecasts,

and Other Projections in Decision Support for Selected Sectors and Regions, Synthesis and Assessment Product 5.1 at http://www.climatescience.gov/Library/sap/sap5-1/final-report/

• US Congressional Budget Office. 1994. Reinventing NASA: A CBO Study (Washington, DC: Congressional Budget Office), March.

• US Environmental Protection Agency, 2009. “EPA Analysis of the American Clean Energy and Security Act of 2009 H.R. 2454 in the 111th Congress,” 23 June at http://www.epa.gov/climatechange/economics/pdfs/HR2454_Analysis.pdf

Patrick LiuMarket Analyst, AIAA

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Space & TechnologiesSpace & Technologies

A space program has always been originated and funded from a national level

Space endeavor too large to be handled by the private sector: financial commitment, technical disciplines involved

Materials (composites, alloys, metals) Hardware and software Automation and robotics Electronics, sensors and optics Communications Power and energy devices

Investment cycles longer than most private investors would tolerate: human capital, expertise & infrastructure

Intangible benefits: inspiring, and pride

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Space Technology Space Technology CharacteristicsCharacteristics

Space research has focused on developing and perfecting technologies and processes to unprecedented levels, characterized by:

Low weight Strength and durability Efficiency and reliability Compactness Temperature resistance Radiation resistance Corrosion resistance

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Space Technologies in Our Life Space Technologies in Our Life

TV Satellite Dish

Ear Thermometer

Firefighter Equipment

Smoke Detector

Memory Foam

Courtesy to NASA

Medical Imaging

Scratch-resistant Lenses

Aircraft Ice Protection System

Laser Eye Surgery Equipment

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AIAA Emerging Space AIAA Emerging Space TechnologiesTechnologies

AIAA’s Emerging Technology Committee issued the 10-hot technologies for future aerospace

Advanced Materials, such as nanotechnology and composites used in space flight

Remote Sensing Technology, including UAVs and Satellites in GEOSS

UAVs outfitted with special sensors to help scientists collect data, predict hurricane's intensity, track fast Arctic summer ice will melt, etc.

Advanced Space Propulsion Technology, including plasma-based propulsion

Commercially useful for boosting communication satellites and other Earth-orbiting spacecraft to higher orbits, retrieving and servicing spacecraft in high orbits around the Earth, and boosting high-payload robotic spacecraft on very fast missions to other planets

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Technology Spin-offs at ESA & Technology Spin-offs at ESA & JAXAJAXA

European Space Agency (ESA) “Technology Transfer Programme Office” Successfully transferred over 200 technologies to

private sector ESA Business Incubation

Help start-up business to utilize space technology Provide funds and business development Bring in private investors

Japan Aerospace Exploration Agency (JAXA) “Industrial Collaboration Department” Work closely with Japan’s advanced commercial industry

to transfer technologies from space researches

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What we see at AIAAWhat we see at AIAA

Space related technical papers Professional members

domestic vs. int’l Aging domestic membership Engineers in the “pipeline”

Space programs Fundamental researches Very long lead time

Douglas ComstockDirector, Innovative Partnerships Program, NASA

Doug ComstockDirector, Innovative Partnerships Program - NASA

U.S. Senate Committee on Commerce, Science, and TransportationHearing Room 253, Russell Senate Office Building

Washington, D.C.

SPACE:Stimulating Economic Growth Today and Tomorrow

How Does Space Stimulate Economic Growth?

• Activity directly related to space products and services.

•Satellites, launch vehicles, ground systems.

•$257 billion in 2008.

• New capabilities, businesses, products and services derived from space technologies.

•Spinoffs from the space program.

•More than 1,700 documented from NASA alone.

• Productivity enhancements and quality of life improvements from the above, such as:

•Efficient tracking and positioning using GPS.

• Improved health from telemedicine, enriched baby food and other medical advancing spinoffs.

20052006

20072008

Space Commercial Transportation Services

Infrastructure Support Industries

International Government Space Budgets

U.S. Gov't Space Budgets

Commercial Services and Infrastructure

0

20

40

60

80

100

120

140

160

180

$ B

illio

ns

Global Space Activity

From the Space Report 2009, Space Foundation

$257 Billion in Space Activity

Globally in 2008

$257 Billion in Space Activity

Globally in 2008

Public-Private Partnerships

• NASA is looking for public-private partnerships in many areas that are Win-Win-Win.

•Private sector gains by having access to Government IP, facilities, expertise, resources, etc.

•Government gains by having access to private sector expertise, resources, innovation, etc.

•Taxpayer gains by leveraging tax dollars and getting improved government systems/services.

• Traditional roles between Government and private sector are beginning to shift.

•Private sector role as partner rather than contractor.

•Government purchase of services instead of hardware.

•Creating broader opportunities for innovation.

What Can NASA and IPP Provide?

• Funding or Leveraged Resources.

•NASA SBIR/STTR, over $100 million annually, funds several hundred small businesses.

•IPP Seed Fund partnerships leverage resources with private sector, academia, and Federal labs.

•Centennial Challenges offers millions in purses.

• Expertise, Technology, and Software.

•Access through licensing and partnerships.

• Facilities and Test Capabilities.

•Access to NASA’s facilities through partnerships.

•Technology demonstration opportunities – FAST.

• Facilitation to enable partnerships.

• Advocacy as a change agent to try new things

“My dream is that one day any American will be able to launch into space and see the magnificence of our home planet as I have been blessed to do.”

NASA Administrator Charles Bolden, from remarks at the National Air and Space Museum on Monday, July 20, 2009.

NASA Spinoffs Benefit Everyday Life• NASA has a long history of transferring space and aeronautics technologies for public benefit. • NASA’s direction to do this traces to the Space Act that created NASA in 1958:

“The Congress hereby declares that it is the policy of the United States that activities in space should be devoted to peaceful purposes for the benefit of all mankind.”

• The Act goes on to say that NASA should: “Provide for the widest practicable and appropriate dissemination of information concerning its activities and the results thereof.”

Economic Growth• New Jobs• New Markets• Increased Efficiency• Improved Competitiveness

Quality of Life• Improved Safety• New Products• Lives Saved or Extended• Green Technologies • Environmental Cleanup

Health and Medicine

Transportation

Public Safety

Consumer, Home & Recreation

Environmental and Agricultural Resources

Computer Technology

Industrial ProductivityNASA @ Home & NASA City

http://www.nasa.gov/city

Applications of NASA-Derived Technology

Public Benefits of NASA-Derived Technology

Historical Views of Space Technology Benefits

“As we look to the future, the benefits that we will have for example in fields like health are simply unimaginable.”

“What impresses me about the program is the sheer number of spin-offs and their great variety.”

“I have to admire what our efforts in space have produced. Better tools for heart surgery, improved techniques for fighting cancer and many more achieve-ments which can help all of us live longer .”

“People are not aware of the enormous tech-nological achieve-ments that directly benefit and will continue to benefit all of us, not only in this country but all over the world.”

Legacy of Economic Benefit

• “The Apollo program itself produced technologies that have

• improved kidney dialysis and water purification systems;

•sensors to test for hazardous gasses;

•energy-saving building materials;

•and fire-resistant fabrics used by firefighters and soldiers.

• And, more broadly, the enormous investment of that era – in science and technology, in education and research funding – produced a great outpouring of curiosity and creativity, the benefits of which have been incalculable.”

Remarks of President Barack Obama – As Prepared for Delivery at the National Academy of Sciences, Washington, DC, April 27, 2009

Innovative Partnerships Program

Matching Technology Needs with Technology Capabilities

Contributions to Sustainability

• Assistance to Developing Countries– Clean Drinking Water– Improved Agriculture– Telemedicine and wireless

networks– Improved Environmental

Decision Making

• Disaster Warning and Relief– Earthquake relief– Tsunami Warning– Wildfire Response– Hurricane Warning

• Environmental Cleanup– Groundwater Remediation– Land Mine Cleanup– Landfill Cleanup– Oil Spill Cleanup

• Use of Green Technologies– Aeronautics Technologies– Green Buildings– Encouraging Green Technologies– Solar Power Applications– Paint Stripping– Global Research into Energy and

the Environment at NASA (GREEN)

NASA-derived technologies are saving lives and improving the quality of life all over the globe.

NASA-derived technologies are saving lives and improving the quality of life all over the globe.

NASA-Derived Technologies Contributing to Security

• Improving Operational Systems– Health & Performance Monitoring for Aviation

Security– Safe Composite Over-wrap Pressure Vessels– Fire-Protective Fabrics & Smoke Masks– Intumescent Materials– Neutralizing Land Mines– Secure Networks for First Responders and

Military

• Threat Detection– Detection/Warning of

Chem/Bio Attack– Hyperspectral Imaging for

Counter-Terrorism– Anthrax Smoke Detectors– Fiber Optic Chemical Agent

Sensing

• Inspection Technologies• Crack Detection in Nuclear Power

Systems• Hyperspectral Imaging for Food

Safety• Inspection of Suspicious Liquid/Solid

Substances

• Identification & Investigation• Pattern Recognition for

Security Applications• Video Enhancement

Supporting Criminal Investigations

These examples represent how NASA-derived technologies are being put to work and making the world a safer and

more secure place.

These examples represent how NASA-derived technologies are being put to work and making the world a safer and

more secure place.

Spinoff Database – How to Learn More

• Database of more than 1,700 documented Spinoffs

• Fully Searchable by various fields

• Keyword(s)• Year• NASA Field Center

http://www.sti.nasa.gov/spinoff/databasehttp://www.sti.nasa.gov/spinoff/database

Security

Outreach & Publications

http://www.techbriefs.com/

Electronics & ComputersSemiconductors & ICsMechanicsInformation SciencesMaterials SoftwareManufacturing & PrototypingMachinery & AutomationPhysical SciencesBio-Medical Test & Measurement

http://www.sti.nasa.gov/tto/ http://www.sti.nasa.gov/spinoff/searchrecord

http://ipp.nasa.gov/innovation/index.html

Visit us atipp.nasa.govVisit us at

ipp.nasa.govNASA @ Home & NASA City

http://www.nasa.gov/city

National Aeronautics and Space Administration

www.nasa.gov

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