NASA Marshall Space Flight Center awarded a $1.8m contract to Futron Corporation to study all possible space markets, and thereby develop launch vehicle demand forecasts for the next twenty years. This was named the ASCENT Study, is now in the public domain, and the method and results of the Study are reported elsewhere in detail at this conference. This paper assesses the new insights that the ASCENT Study has brought. The results have implications in a number of key decision areas. Certain space market concepts that have been discussed for many years were effectively relegated as untenable in the twenty-year timeframe of the Study. Comprehensive price elasticity of demand data was developed that forces a new look at the question of what price level needs to be achieved to trigger new market developments. A new view of growth sectors emerges. In summary, the work of the ASCENT Study was massively important, and this paper uses its findings to bring some closure to a number of questions that have been out in the aerospace planning community for at least a decade. There are significant implications for the manufacturing sector, for the Spaceport Authorities and for those with responsibility for developing focus and budgets within the Federal space organizations.

NASA spent $1.8m on a market study in 2001 and 2002. What was different about this ASCENT Study, and consequently why can there be confidence in its results? There was a total rethink of prior market forecasts since the previous full-scale study, which was the CSTS Study of 1994. All the commercial markets were assessed using demand-based methodologies that were entrenched in end user buyer behavior.

New primary research was conducted. In summary, the ASCENT Study was an independent, rigorous, pragmatic and systematic reassessment of space markets. The Study is in the public domain and the two-volume Final Report may be downloaded from the Futron website www.futron.com.

We must of course be aware of certain caveats in using the Study results to guide strategy. For instance, the markets considered were all orbital in nature. NASA had not requested the assessment of sub-orbital markets for their ASCENT Study, even though, from other sources, aware of the potential of the sub-orbital space tourism sector. Furthermore, a twenty-year outlook may always be overcome by external government events, but even so, the forecasts for the commercial sectors are robustly based. For all such sectors, the forecasters applied the acid test of assessing the end user demand, and then determining if at that demand and price level, the business could make money.

What are the questions that have been troubling planners in the aerospace community, and which the ASCENT Study was established to answer?

• What is the likely outlook for satellite manufacturers?
• What does the future hold for launch vehicle providers?
• How will the US share of the commercial space business fare over the 20-year planning horizon?
• Will government or commercial payloads become the dominant sector?
• *Where will future growth come from-which of the new sectors become feasible?
• How low must launch prices go before space markets take off?
• What would be the impact of an RLV?

The study did provide definitive answers to these questions and more. Some of the answers are unexpected. Some are not a source of comfort. But all of them need to be understood and digested. A market study of this scale is only undertaken once in a decade, and its lessons need to be learned. The ASCENT Study was global in scope, and it provides within its findings, indicators of the way for US aerospace to begin to recover the ground it has been losing over the last 20 years. The findings should not be ignored.

The pragmatic approach adopted by the forecasters brought a cold blast of realism to some former projections. Some deeply held convictions were found to simply not meet the test of market realism.

One of the first realizations was that many previously "favorite markets" are just not realistic in the next twenty years. They do not meet basic commonsense feasibility checks. For example, the previous CSTS Study had included forecasts of several markets that faced significant regulatory or environmental policy barriers of a global nature, or whose very existence would depend on the prior existence of another space market that had yet to be established. None of these were therefore included in the ASCENT Study projections for the next twenty years. Examples of these rejected, or more strictly deferred, sectors were asteroid mining, lunar regolith energy sources, space solar power generation for terrestrial consumption and hazardous waste disposal. The wider implications of this important finding will be discussed later, but there would surely be benefits to the industry and the government in investing their energies, resources and where appropriate tax dollars on those sectors that have some probability of happening within the next 20 years. Such a focus is badly needed and would help in the incubation of some potentially useful markets that we shall see would be essential in maintaining long-term launch demand. And by the same token, it is time to reconsider any ongoing major spending on ideas and concepts that fail these tests of pragmatism. It is simply a matter of good management to allocate resources effectively.

Another key finding is that existing space markets cannot achieve sustained growth in the next twenty years. The forecasters took into account global demand for satellite TV, Radio, telephony and broadband data services, and within each of these sectors there was a growth in demand over the period for end user services. However, because the satellites improve in efficiency by factors of ten or more from one generation to the next succeeding one, the overall impact in terms of satellites ordered and launches needed for these traditional sectors does not indicate any growth over the two decades forecasted. There are roughly 20 launches a year globally in order to service these markets now, and the figure will be no higher twenty years hence. The implication is clear for the manufacturers; the overall size of the pie for these sectors will not be growing. If the manufacturer intends to be a long term player, then not only must market share be at least maintained, but new growth areas must also be identified. This implies that a redirection of sales and business development efforts within the manufacturers will be required in order to achieve this redirection.

What, then, are the new growth areas identified in the ASCENT Study? And can these new areas, when added to the demand for the traditional services, result in overall growth? The main finding was that the global demand for launches (ie governmental plus commercial) would not vary much over the twenty-year period, and the annual global launch demand remains flat at around 65 to 75 launches per year for the next twenty years. But to achieve even this flat stable launch demand, some launches to service new evolving markets must be included during the second decade. In this twenty-year timeframe, the ASCENT Study tells us, the only evolving market that is going to provide the demand to fuel any potential growth will be public space travel. The implication of this finding is enormous. For one thing, at present the only way to service this demand is from Russia. If the traditional US aerospace manufacturers are in commercial space, or indeed the space business in general, for the long haul, then they will need to develop the combination of launch vehicle and spacecraft to enable this new sector to develop. The sub-orbital segment will be starting in the very near future building the experience and constituency for the new customers, and being driven by the new entrepreneurial spacecraft manufacturers. These new space-traveling customers will be looking for the next step of orbital flight during the succeeding decade. The OSP and its associated human-rated ELV would seem at present to be an initial means of addressing this need, providing that the government and the manufacturers take this into account in its initial design. It should be noted here that the forecasts for public space travel that were included in the ASCENT Study are real and robust and were derived from a conservative analysis of survey data taken from the Futron/Zogby survey, which interviewed a statistically valid sample of millionaires. For example, the survey respondents were aware that the price for an orbital flight of two weeks is about $20m, and that 6 months training is required. They were also aware of the risks and the possible medical complications that could result (this data was provided by a Shuttle Commander). They were also aware that at present the flights are only possible from Russia in a Russian spacecraft. Although there were questions on a range of prices, the baseline forecasts in the ASCENT Study assumed the $20m figure that is presently being quoted in the industry. The analysis of the data took into account the number of people in the world who could afford to spend that amount on a flight, as well as their inclinations and health levels. Clearly, if a spacecraft were specially designed to address this market, and could carry, say, a dozen travelers, then the price per traveler would be reduced and the demand would accordingly increase. The forecasts in the ASCENT Study, however, assumed only one or two passengers per flight on a Soyuz-type spacecraft.

Do possible reductions in launch price provide a solution to the launch vehicle demand problem?

Is it true that at $1000 per LB into LEO, there is a step-function increase in market demand for launches? Some very clear and important findings emerged on these questions. Perhaps the most important finding was that, contrary to many previous expectations, existing space markets are inelastic to the lowering of launch prices. This may seem to be counterintuitive, but the ASCENT Study carefully assessed a "launch price gearing factor" for each of the traditional markets, and this factor is the key to understanding the result. For example, if we take the case of a telephone user who happens to use a satellite for part of his intercontinental phone call, then the gearing factor turns out to be a mere 2%. In other words, only 2% of the cost of the call is attributable to the original launch cost of the satellite being used. The majority of operating costs, it turns out, are related to international access charges, ground segment equipment, and many levels of service provision infrastructure that results in the end user being very far removed from the original launch of the telecommunications satellite. It is apparent, then, that the user would not make any more phone calls in these circumstances, even if launch prices were reduced by an order of magnitude. This situation is not the case for the new markets, however. In the case of public space travel the market is very responsive to launch price reduction. This is because the travelers are paying from their own pocket the very considerable ticket price for the launches, and in any case the "launch price gearing factor" is relatively large for this market segment. We therefore find, perhaps surprisingly, that despite many years of assertions to the contrary, there is no single "magic number" of dollars per pound to LEO that makes sense as an overall target. It is pointed out in the Study that in any case, the various market segments have different starting points today for dollars per pound into LEO. We can forget forever the notion that achieving $1000 to LEO, or any other figure that comes in vogue, will solve the problems of the launch industry. We have learned instead that there needs to be a more segmented approach to this question. None of the markets that exist today will adequately repay the launch vehicle manufacturers for major price reductions. This is certainly the case for most governmental launches. But, in sharp contrast, a focus on public space travel from this standpoint will indeed repay the efforts.

What are the findings in terms of shares of US versus the rest of the world, and between government and commercial launches? The results of the Study are that the US share of total global launches (ie governmental plus commercial) falls from around 40% today to around 25% by the end of the forecast period. The overall government share of global launches reduces from around 75% today to 50% by the end of the period. The implications of these findings are discussed later, but it should be stated here of course that each of these trends is not irreversible, whether or not it is desirable.

One way of massively affecting these baseline ASCENT Study projections is to consider the design, development, and introduction of a fully reusable orbital launch vehicle ( RLV). Indeed, it was the prime motivation behind NASA's letting of the ASCENT Study contract to understand the needs for the follow-on to the Space Shuttle. When the work was originally conceived, the Space Launch Initiative (SLI) and its Second Generation RLV was the anticipated route to the architecture. At the time of writing this paper (August 2003), it would seem that the Orbital Space Plane (OSP) could well be the route forward. It could potentially be totally reusable, or possibly a reusable spacecraft mounted on an expendable launch vehicle ( ELV) launcher. It could service either NASA's ISS needs only, a combination of NASA and US Airforce needs, or ideally also address the needs of the future market for orbital public space travel. Of course, it may be the case that the RLV is not introduced by the US at all, but by Europe, or elsewhere. There are profound implications, the Study tells us, about the introduction of an RLV into the launch vehicle market place. At a time where there is over-capacity in traditional launch markets, if an RLV were introduced, it would have devastating results to the global launch industry if it were to compete with existing ELVs for business. On the other hand, the ASCENT Study shows that introducing an RLV would have very positive results for the manufacturer and country that first introduced it, by both growing the overall market and then taking most of the demand. Strategically, therefore, it would require very careful and focused positioning. In particular, it would need to be focussed at the public space travel potential, and at those markets that require the attributes that an RLV possesses over and beyond the equivalent ELV, e.g. returning the payload (often human) safely to Earth. The cases analyzed in the ASCENT Study showed that, if an RLV were introduced in 2015 by a US manufacturer, then the US share of world markets would rebound back to around 60% of the total. Not covered in the Study report was the case of the introduction of a foreign RLV, but we can assume that in those circumstances the outcome would be devastating to the US industry. These are critical times, as the nation assesses the best way forward following the Columbia accident, and the purpose and architecture of the OSP. The ASCENT Study offers important guidance.

In the remainder of this paper, we address more specifically how the ASCENT Study findings affect industry, government and the new spaceports.

Some rather stark messages for US spacecraft and launch vehicle manufacturers emerge from the ASCENT Study. Fortunately, representatives from all of the major manufacturers were involved and briefed on the findings of the ASCENT Study as they were emerging, so they should at least already be beginning to take the necessary strategic swings in direction. Furthermore, the preliminary results of the Study were already taken into account by the Aerospace Commission late last year, and have thereby found their way into the Final Report of that body. The message of the ASCENT Study, amplified through the Aerospace Commission findings, is that US aerospace manufacturers are declining in importance on the world stage, and need to take steps to reverse the trend, otherwise there will be far-reaching implications in employment and even the education sector. The US manufacturers need to take very seriously the message from the report that the party is over. It will no longer be possible to compete in the world by simply pursuing "business as usual". The way towards growth and recovery involves diverting some effort and resources away from the comfort zone of familiar customers and markets and towards the needs of the coming new market areas, and specifically towards the public space travel sector. None of the major manufacturers has taken a position in the race for the far easier sub-orbital tourism blue ribbon. And now, this lucrative growth market will be developed instead by totally new entrepreneurial space vehicle manufacturing companies, such as Burt Rutan's Scaled Composites. Peter Diamandis, the X-Prize organizer, advises that the "?.industry dinosaurs, if they are wise, should start noticing the little furry animals running around their feet."! But to develop and operate orbital RLV's will be much more challenging, and will take a decade, once the challenge is accepted. Although it is now clear from the meticulous research captured in the ASCENT Study that the ultimate markets are assured, it is nevertheless a strong technological challenge to produce the launch vehicle/ spacecraft combination that will service this new major industry of orbital space tourism. But the US manufacturers have help. The OSP would provide an excellent starting point, with initial funding provided by the government. But there needs to be an understanding of the commercial market opportunity that a suitably designed OSP would create for its manufacturer, in addition to its governmental uses. And the US industry needs to contemplate the disastrous consequence of such a vehicle being developed elsewhere. There is both a carrot and stick associated with this particular learning experience. It is a difficult strategic trick to pull off. The existing ELV's are very profitable for their manufacturers. Introducing a new class of vehicle- the RLV- brings about a paradigm shift that drastically reduces the market for the bread- and-butter ELVs. But it is the only way to bring about overall growth in the industry, and it is the only way to be a part of the new global industry of public space travel. In any event, the ELV story will largely be over once the RLV generation is introduced anywhere else in the world. Far better, one would suppose, to be in the driving seat. It is all about phasing and resource allocation and seizing the opportunity - in other words, leadership. The government has spent the money on this study to come up with the conclusions. Those conclusions could not possibly have been any clearer.

The Final Report of the President's Commission on the Future of the US Aerospace Industry came out with some very strong recommendations. And it did so at a time when the country is re-evaluating its commitment to the further exploration and development of space, in the aftermath of the loss of the Space Shuttle Columbia. It is not necessary to repeat here all of the recommendations of the Commission. But instead it is worthwhile to pick out those aspects that derive directly from the ASCENT work, and of which NASA and other government agencies associated with the development of space, need to be aware. The country has already lost its leadership in space. US industry has only 40% of global launches today, and the ASCENT Study indicates that unless there is a shift in focus and priorities, then the figure will be down to 25% twenty years from now. There are ramifications both in employment and in the education of our future generations. Even the financially stretched Russian industry is doing better in terms of market share, and is already taking the initiative in the early development of the new commercial opportunities represented by public space travel. The Europeans are gearing up to use the Russian Soyuz system capabilities for their own purposes from the European launch facilities at Kourou. It seems clear that the Chinese will not be far behind, with imminent launches of their first Shenzhou crews. The message for the US government is therefore no less than a need to seek to bring about a reversal of the relative decline of the US as a space power. One part of doing this is to remove some of the impediments for foreign customers to fly their payloads on US launch vehicles. Another way is by taking steps to encourage those infrastructure-and regulatory- developments that will facilitate the growth of a domestic space tourism industry. In this context one must include both sub-orbital and orbital developments and facilities, although the ASCENT Study focused on the latter. The States seem so far to be way ahead of the Federal government in this regard. Many States are exploring the possibilities of having spaceports within their territories to help in their employment and other needs. The Federal government should play its part in facilitating these first steps as the spaceports are being established. The commercial development of space, and its next logical step of space tourism, is the most American of endeavors: it is a way to make money out of people being free and having fun. Of course, down the road, there are other benefits for the nation, and even the world. But at least the ASCENT Study makes abundantly clear that the US cannot expect to rank itself amongst the world's most thriving civilizations if it does not continue on the road that it set for itself at the start of the space age. The more entrepreneurial parts of the commercial sector have seized the message already, and soon we shall see the first sub-orbital space tourists follow in Alan Shepard's footsteps. The Federal government must also play its part. NASA can be directed to work with these new realities. The Aerospace Commission identifies public space travel as an important new sector "??.that holds the potential for increasing launch demand and improvements in space launch reliability and reusability?.?? and would ultimately support a robust space transportation industry with "airline-like operations"?..?" Perhaps the best way for this redirection of NASA to take effect would be in terms of budgetary resource re-allocation. As was discussed earlier, there is no justification for significant expenditures to be taking place on ideas and concepts that have no likelihood of taking place within the next twenty years. The ASCENT Study provides the guidance for this necessary resource reallocation, as discussed earlier in the paper. By the same token, there is a need to actively support initiatives to bring about the new industry of space tourism. At the very least, NASA needs to create a small Office of Public Space Travel to facilitate the needs of the emerging sector, and to coordinate those needs with the Administration's other long-term plans. A good example of an early role for such an office would be an involvement in the OSP architecture design discussions to find ways to ensure that the resulting OSP vehicle design can play a useful part in the future of orbital space tourism. This can be the way in which the US takes back the lead from the Russians in this area, and/or prevents the Chinese from taking this initiative of providing trips for American space tourists. The ASCENT Study makes it very clear what the implications will be if the US does not develop an RLV that can eventually be used for public space travel purposes. The OSP is the best shot we have at this for the short term.

These new entities have been discussed above. But are there any specific messages from the ASCENT Study that need to be conveyed to their Boards of Management to assist in drawing up their business plans? Well, the ASCENT Study contains both good and bad news for the spaceport developers. The good news is that there is an assured market for public space travel, and incidentally the commercial spaceports are probably better placed to take advantage of the opportunity than are the current governmental launch sites. The bad news is to do with timing. The sub-orbital business will be ready to start very soon now, but it will be probably more than a decade before the orbital demand may be serviced, because the vehicle has yet to be developed. So the spaceport planners need to be very pragmatic in their plans. There is not much likelihood of attracting a significant part of the regular current launch business for commercial payloads to the new spaceports. There are too few anticipated payloads over the next two decades to be worth changing existing practices and launch sites. Also, the ASCENT Study has laid to rest the wilder notions of potential markets, such as space solar power and asteroid mining as potential sources of customers, placing their development beyond the 20-year horizon of a business plan. So, the spaceport authorities must concentrate for success on those markets that do have a high probability of happening within a reasonable time frame. This will therefore probably consist initially of sub-orbital markets such as sub-orbital tourism, with possibly some sounding rocket missions for scientific research purposes. It would be wise, therefore, to focus on providing the terrestrial infrastructure that will be needed to support these types of missions. Since it is unlikely that these sectors on their own will provide enough income over the next decade to support the initial spaceport investment, there will be a need to also use the facilities as a high-tech incubator for space-related industries to augment the early revenue flows. By the second decade, it might be assumed that the public space travel industry would begin to make a positive contribution to the profitability of the venture. And from that point onwards, the prospects are very positive indeed. Tourism is one of the biggest industries on the face of the Earth, and space tourism will grow to become a major generator of prosperity and jobs. Of course, there will be benefits from the point of view of employment statistics even from the early years of spaceport operation before full profitability is recorded.

NASA showed great foresight in defining and funding the ASCENT Study, which was a major investigation into understanding current and future space markets. Its findings are now in the public domain and need to be studied by those responsible for managing the future developments within the aerospace manufacturers, the government agencies with aerospace oversight, and at the spaceport authorities. This paper has focused attention on the implications of the ASCENT Study findings for each of these communities in turn. The Study findings are unequivocal, and call for a direct response. They point to the need for some major changes in the way the US approaches its options in order to regain its former pre-eminence in the space business, and in order to seize its part of the prosperity being offered by the new markets that are just emerging. The paper has suggested some initial steps to be taken to this end.