Space Economics And Geopolitics: New Frontiers Of Global Power

Today, space exploration is more of a challenge to the technological and strategic dominance of countries and large corporations than a purely scientific exploration.

To understand where the need for joint solutions to space economics and geopolitical risks arises, we should start with general considerations: geopolitical facts, economic development and financial markets are correlated with each other. The reason is easy to explain: uncertainty is the main “enemy” of the economic and financial system. And we know that no other area than geopolitics can cause uncertainty about the future.
Moreover, geopolitics is a special area of ​​confrontation/clash of economic powers, and for this reason it inevitably becomes a testing area for all countries wishing to put forward their candidacy for the level of hegemony, at least at the regional level.

“New Territories”: Conquering the Sky, Sea, Arctic and Internet

At this historical juncture, a “new region” has emerged at the center of world geopolitics. In fact, these regions have become the site of the most heated debates over global hegemony. Three of these “new territories” refer to physical “places”: (i) the first is precisely space, understood as the territory extending above our heads, which is precisely the arena of the space economy; (ii) the second is the sea, with its new exploitation possibilities and its importance in world trade; the third is the Arctic, which has become more strategically important than ever, since climate change has led to a reduction in its ice-covered surface; and the fourth and final area is virtual space, pertaining to the cyber world. Obviously, given the topics we promised to cover in these articles, we will focus here exclusively on space geopolitics, although, as we will see later, it will be useful to make some cross-cutting comparisons with other areas.

Interest in space is an integral part of geopolitical elements.

In fact, when we talk about space geopolitics, we are not proposing anything new. Space exploration was born in a geopolitical context: the confrontation between two superpowers and the Cold War, the United States and the Soviet Union. The beginning and acceleration of the conquest found its contextualization in the struggle for hegemony between the two blocs.
It was October 1957, and the Soviet Union surprised everyone by launching the first artificial object into space: Sputnik. What could be a better statement of the power of Soviet science and technology than its launch? From a scientific and technological point of view, a small sphere 58 cm in diameter with 4 antennas and a total weight of 83 kg was launched into orbit, capable of sending signals to Earth.

The rhythmic signal, launched from space and reaching every point on the planet, became a record that was hard for the entire West to digest; as if that were not enough, at the end of the year the first living creature was released into the water – the dog Laika. But most importantly, in April 1961 the first manned flight around the Earth took place – the flight of Yuri Gagarin. The Smolensk cosmonauts, immediately proclaimed heroes of socialism, became symbols of the new Soviet man.

In boxing parlance, this meant a series of knockouts. A political and cultural shock to the United States that left it racing against time to catch up. However, with the Apollo project and the conquest of the moon, Western superiority was soon recognized. In retrospect, we can perhaps say that the first act of the future decline of the Soviet Union and its political and social model took place in space.

Italy in the San Marco project, ENI by visionary Enrico Mattei

Although the standoff between the United States and the Soviet Union dominated the first phase of the geopolitical confrontation in space, other players faced the same problem, trying to defend strategic positions with rich propaganda and political implications. Among them was Italy, which was trying to restore its international reputation and power after its defeat in World War II.
This task has a name – the San Marco project, a scientific father – Luigi Broglio, but above all a decisive sponsor – Enrico Mattei.
The launch of the San Marco satellite from an Italian base off the coast of Malindi in Kenya , which celebrated its sixtieth anniversary last December, was a significant event in the balance of power within the Western alliance. With this launch, our country became the fifth in the world to launch a satellite into space, but the third after the two superpowers to do so using national personnel and equipment. It is no coincidence that behind this geopolitical success of Italy stood none other than Enrico Mattei, who is considered by many to be the true architect of the national foreign policy of those years.

Economic hegemony and the growing role of individuals

If, in essence, the conquest of space was born as a geopolitical fact, now this connotation is no longer associated exclusively with the assertion of political and cultural hegemony, but clearly concerns economic hegemony as well. Space, in fact, is one of the main spheres of future economic confrontation: an economy that is rapidly approaching a turnover of 1000 billion dollars.
However, in recent years the number of participants has increased: first of all, because the world has become multipolar, and various protagonists have appeared in space, and not only the USA and Russia , but also Europe , China , India , Brazil , Japan .

The second difference is that the state is no longer the only major player in the sector, and the role of individuals is becoming increasingly decisive. This does not mean that government and state have lost their role; it is true that they retain a corresponding position; for example, even giants like Space X benefit from billions of dollars in federal contracts.
However, nation states are no longer the only players in space exploration: private companies like Space X or Blu Origin have joined them, taking up a significant share of the market. The infographic recently uploaded by Elon Musk on X shows a spaceship launch in 2024 and speaks for itself. Space X is backed by four national agencies (China, Russia, Japan and India) and many other launches by private companies. The delays of the European Space Agency (ESA) are also noteworthy.

In addition, in many countries, national space agencies have created commercial companies to manage the new space economy; for example, the Indian Space Research Organisation (ISRO) has created a private, though wholly ISRO-controlled, company, Antrix Corporation, whose task is to market satellite launches and space services. At the same time, national agencies have entered into cooperation agreements with private companies. The presence of these private actors becomes even more significant when one looks at the supply chain of components behind each launch.

A constellation of companies and startups born from cost cutting

However, the real novelty of what has been defined as the new space economy is the constellation of companies and startups that have taken advantage of the falling costs to “commercialize” space or to influence the supply chain. A real industry that plays a vital role in every country’s national security strategy. Obviously, beyond these economic goals, there are many strategic services – from communications to satellites and military services – that use space as their operational scenario. All elements that are related to national security issues. We have a lot to think about in the future.