The Real Picture of the $686 Billion Space Economy as Reflected in the Space Foundation Report

The latest annual report, "The State of the Global Space Economy," released by the US think tank Space Foundation. The first figure that caught my eye when opening this thick report was that the global space economy reached $686 billion in 2025. The 12% year-on-year growth rate is the second highest in the past decade, following the post-COVID recovery period in 2021. This time, I would like to organize the vast amount of data packed into this report as comprehensively as possible.

The commercial sector accounts for 79% of the space economy

First, let's look at the big picture. Of the $686 billion, the commercial sector accounts for $544.3 billion (+13% year-on-year), making up 79% of the total. Government budgets are $141 billion (+7.4%). In other words, the space economy is no longer a "national project" but a "private business" battlefield.

Looking at the breakdown of the commercial sector, the largest sector is Positioning, Navigation, and Timing (PNT) services at $279.9 billion (+18.3%). This includes many of the services we use daily, such as smartphone map apps, car navigation, and logistics tracking systems. Next is ground stations and equipment at $139.8 billion (+12.7%), with sales of GNSS-enabled devices alone reaching $103.6 billion.

On the other hand, in terms of growth rate, satellite manufacturing at +67.2% and the launch industry at +49.4% show outstanding growth on the infrastructure side. In 2025, 4,492 satellites were launched, a 62% increase from the previous year. Of these, nearly 90%, or 4,040, are commercial satellites. SpaceX's Starlink alone accounts for 3,174, highlighting the company's significant presence once again.

Rapid growth of emerging sectors

What was impressive in this report were the figures for emerging fields that, while still small, are expanding rapidly.

• Lunar activities (a newly established category this time): $360 million (+23.2%)

• In-space servicing, assembly, and manufacturing (ISAM): $304 million (+42.9%)

• Space Situational Awareness (SSA): $196 million (+42.9%)

• Space insurance: $686 million (+22.4%, though insurance claims also surged to $508 million)

Regarding lunar-related activities, Firefly Aerospace's "Blue Ghost" mission achieved the first fully successful private landing in March 2025, delivering NASA scientific payloads. The company's lunar business revenue was $131.2 million, Intuitive Machines' was $210.1 million, and Japan's ispace also recorded net sales of $22.9 million for the fiscal year ending March 2026. The combined commercial lunar activity revenue for these three companies is calculated to be approximately $364 million.

The following was also helpful regarding the growth patterns of the space economy.

The perspective of "moving from infrastructure development to a mass application phase" overlaps significantly with the figures in this report, and I feel it confirms that space infrastructure is actually beginning to function as a foundation for business.

Launch market, at a pace of "once a day"

Returning to the topic of launches, there were 324 orbital launches in 2025 (up 28% year-on-year), with 315 of them successful. The US led with 193 (141 by SpaceX alone), followed by China with 92.

Even more interesting is the momentum since the start of 2026. It reached 153 launches in the first half alone, a pace exceeding the 149 in the same period of 2025. If this continues, 2026 is likely to set a new record for the full year. Launch costs have also dropped dramatically, from $54,000 per kg in the NASA Space Shuttle era to under $3,000 with SpaceX's Falcon 9.

However, this rapid expansion seems to have side effects. In a May 2026 report, the Commercial Spaceflight Federation pointed out that if adjustments to existing launch facilities and new investment do not keep up, the US may not be able to meet demand over the next decade. There are also reports from SpaceX partners that Transporter mission bookings are already filled through late 2028 to early 2029.

Government budget rankings and the temperature difference between countries

Government space budgets (2025) are as follows.

• United States: $78.3 billion (+1.4%)

• China: $19.0 billion (+10.3%, 0.25% of GDP)

• Europe(Combined EU, ESA, EUMETSAT): $15.7 billion

• Japan: $5.5 billion (+13.5%)

• Russia: $3.9 billion (+24.0%)

The fact that the top five countries and regions account for 87% of the total speaks to the high concentration of this industry.

On the other hand, looking at growth rates, some countries are showing interesting movements. Canada has more than doubled its budget to $612 million. Pakistan's space agency (SUPARCO) has reached $129 million, a staggering year-on-year increase of +289%. Israel is also up +105% to $17.8 million. Conversely, the Philippine Space Agency saw a significant decrease of -47% due to austerity measures.

Regarding Japan, it is reported that 300 billion yen (approximately $1.2 billion) was allocated to private companies, universities, and research institutions in 2025 through the "Space Strategy Fund" (a 1 trillion yen scale, 10-year plan) operated by JAXA. Priority is being given to the development of high-frequency rocket manufacturing, optical communications, and in-orbit manufacturing technologies.

Military space budget to exceed $150 billion by 2027

The area that received the most attention in this report was actually the military sector. Global military space spending is expected to exceed $150 billion by 2027.

The U.S. Department of Defense's space-related budget is set to expand to $63 billion in fiscal year 2026 (a $13 billion increase from the previous year) and to $126.2 billion in the 2027 proposal. The budget for the Space Force alone is also set to reach $71 billion, with $40 billion planned for research and development and $17 billion for classified programs.

The report points out that the reality behind this is that "space has changed the battlefield," as demonstrated by combat in Ukraine and the Middle East. It means that all military functions, such as drones, missile defense, communications, positioning, and target acquisition, have become dependent on satellite infrastructure.

The "Golden Dome" initiative promoted by the Trump administration (a missile defense network reminiscent of the 1980s "Star Wars" program) is estimated to cost over $175 billion in total, making it the largest military space program in history. Japan's Ministry of Defense is also increasing its space-related budget year by year, which overlaps with the article below.

European countries are also increasing their budgets across the board, with France aiming for $11 billion by 2030, Germany for $41 billion, and Israel announcing a $111 billion 10-year plan. I felt that the German Defense Minister's statement, "If the satellites go silent, the nation becomes blind," symbolizes the sense of crisis in each country.

Investment in emerging technologies, AI and data centers become the main battlefield

Finally, here are the trends in technology investment. Private investment in the space sector exceeded $12 billion in 2025. The following five areas are particularly notable.

1. Reusable rockets: Market size of $8.4 billion (average annual growth rate of 13%). SpaceX reached a valuation of approximately $2 trillion in its June IPO, while Rocket Lab is valued at over $50 billion, and Relativity Space is valued at around $4 billion.

2. In-orbit manufacturing: California-based Varda Space raised $187 million in Series C funding. They aim to achieve "therapeutic effects that reach patients on Earth" through space manufacturing of pharmaceuticals.

3. AI utilization: AI has become essential for operating satellite constellations of 10,000 units, and capital continues to flow in, with Loft Orbital raising $170 million and K2 Space raising $250 million in Series C funding.

4. Lunar infrastructure: The cap for NASA's CLPS program is scheduled to increase from $260 million to $420 million. Zeno Power has raised $50 million to develop nuclear batteries to survive the lunar night.

5. Orbital Data Centers (ODC): A cutting-edge field that has been rapidly gaining attention since the beginning of 2026, with Cowboy Space (formerly Aetherflux) raising $275 million and Starcloud raising $170 million. The concept is to solve the three major challenges of terrestrial data centers—power, cooling, and land—in outer space. Major players like SpaceX and Google are also showing signs of entering the market.

Summary

Looking at the numbers, it is clear that the space industry is no longer just a "dream industry," but is becoming a foundational industry inextricably linked to terrestrial economic activities, ranging from positioning services to military infrastructure and data centers. In particular, the structure where falling launch costs drive the growth of all emerging fields (manufacturing, AI, lunar development, and data centers) is a point we will continue to monitor closely.

On the other hand, challenges behind this growth have also become apparent, such as the lack of capacity at launch facilities and the geopolitical tensions brought about by the rapid expansion of military spending. We intend to continue tracking developments in this field in future reports.

List of Reference Articles

○ The State of the Global Space Economy: 2026 Analysis of Commercial and Government Space (July 2026) Space Foundation

https://www.spacefoundation.org/events/global-space-economy/

○ The Road to $3 Trillion: Decoding the Expanding Space Economy (July 23, 2025)

○ Decoding Expectations for Private Companies and Market Opportunities from the Ministry of Defense's New Guidelines (August 1, 2025)