KEY WORDS: Space tourism, aerospace policy, EU unemployment, resource wars

The economic promise of space tourism has been discussed in some detail in earlier papers. Its potential to grow into a large-scale airline-like business was described in 1986 [1]. Based on a wide range of related research that has been published in the intervening 20 years, the potentially important economic benefits were described with detailed supporting evidence in 2006 [2]. The major points are summarised briefly here.

The 2001 orbital flight by Dennis Tito on a "Soyuz" rocket demonstrated the remarkable fact that, despite having spent the equivalent of $1 trillion since the same type of rocket launched the first satellite in 1957, the government space agencies of the OECD have not reduced the cost of getting to space at all in half a century. Soyuz remains the cheapest and safest means of space travel.

The 2004 flights of SpaceShipOne further demonstrated that sub-orbital flights could be made at a cost of about 1% of the expendable rockets used by space agencies, and that commercial passenger services could in principle have started in the early 1970s, if not earlier. From the economic point of view this would have been very desirable, creating new industries and employment. Consequently it is clear that governments' "space policies" have been responsible for a delay of 40 years so far in exploiting space travel economically.

Studies by Asford and Collins [3], the Japanese Rocket Society ( JRS) [4], the Space Transportation Association (STA) and Nasa [5], Ashford [6], Bekey [7], Futron (for Nasa) [8] and others have increasingly showed that space travel could grow into a large new business activity; that it could reduce the cost of traveling to orbit by 99% or more; and that this could lead on to other valuable activities such as CO2-free energy supply from space [9]. Reducing launch costs sharply would also enable large-scale economic development in space, contributing greatly to the resolution of global environmental problems, and removing the justification for "resource wars" by making the limitless resources of space economically accessible [2]. It could also have important cultural benefits [2, 10].

It is also important to recognise that, from an economic or business point of view, the space industry is today very unhealthy. Employment in rocket engineering in the USA fell from more than 28,000 in 1999 to less than 5,000 in 2002 [11], while European space industry employment fell by 20% from 1995 to 2005 [12]. The "bottom line" is that, like any other industry, unless the space industry starts to supply services that can grow to be sufficiently popular with sufficiently large numbers of the general public to reach substantial economic scale, it cannot become a major commercial activity, and will continue to impose a heavy burden on taxpayers. Against this background we can consider the potential benefits for Europe of developing passenger space travel services; how large-scale they might grow; and what role Europe might play in their growth. In order to clarify this, it is useful first to review the economic situation in Europe.

It is no secret that the major economic challenge for Europe today is unemployment, which has been close to double figures in the major continental economies for nearly 20 years, and also reached a 6-year high of 6% in Britain in late 2006 [13]. (It should also be noted that changes in the definition of unemployment now categorise many people as disabled who are capable of and wish to work; this substantially raises the real unemployment rate [14].) A tragedy for many people, such high unemployment is a major waste of economic potential, as well as being a source of social friction, cultural damage, and growing political cynicism. Youth unemployment, which is typically much higher than the overall average, is particularly destructive: energetic young men, if unable to earn income legally, will often find illegal and typically socially harmful ways of earning, such as theft and narcotics distribution. It should also be noted that high unemployment is not confined to Europe: it is at or near the highest level for decades in the USA (although disguised by the government's habit of removing those unemployed for longer than one year from the statistics) and Japan, as well as in most developing countries. It is in fact one of the major problems in the world today. Rapid growth in the numbers of the "working poor", caused by low pay, in the USA, Britain, Japan and other rich countries is a closely related, and similarly ominous problem.

While there are nowadays important differences in the preparation of national accounts in Europe and the USA (notoriously favouring the latter), Europe's high unemployment can be seen as a serious weakness in the European "social model". It is especially unsatisfactory at a time of rapid economic growth in China and India which are thereby becoming competitive in more and more industrial sectors. If current trade policies remained unchanged, European imports from these countries could increase by another order of magnitude within a few years, creating an even greater challenge for employment policies in Europe.

This problem was put into sharp focus in a recent article about Chinese companies' ambitious growth plans: the chairman of the Ford motor company, which is building a large factory in China for export production, stated: "Americans don't get it; they have no idea what's coming" [15]. This development raises such economically important questions as: "In 10 years and 20 years, what percentage of world car production will be in China?" and "By what percentage will European car production fall?" and "What will take the place of employment in the motor industry in Europe?"

There is long-running controversy over the most appropriate policy response to the challenge of unemployment; for simplicity, the two main approaches are here labeled "Neocon" and "Left". They were broadly represented by candidates Sarkozy and Royal in the 2007 Presidential election in France.

Broadly following such European politicians as Thatcher, Blair and Berlusconi, presidential candidate Sarkozi advocated the implementation of "neo-conservative" policies in France - that is, cutting government expenditure, privatising publicly owned assets, and liberalising trade to put pressure on companies to cut wages sufficiently to enable French companies to compete with the poorest developing countries. This approach is viewed by critics as a threat to the fundamental value of Europe, which has enabled half-a-billion people to live stable and productive lives, in large part due to the social security system; however, as unemployment has grown, the sustainability of this system is increasingly in question. Critics of neocon policies ask such questions as: "Once a "race to the bottom" is started - that is, competitive reduction of job security, pension provision, health insurance, public education, social welfare services, etc - how can it end, other than in reducing European living standards to the world average?" and "It would be better to raise other countries' living standards to those in Europe"

By contrast, presidential candidate Royal advocated such policies as improving re-training services to help the unemployed, experiments in work-sharing, and controls to limit the rate of growth of imports from low-cost countries. This approach is criticised in turn as creating the danger of economic stagnation due to lack of competition, and military weakness through lower GDP growth. For many reasons, including international strategic competition, and political pressure from large multi-national corporations, rapid growth of imports is currently under way. As countries such as China and India follow policies to catch up with richer countries, the latter need to keep ahead or be swamped. But how can they keep ahead without reducing living standards?

Independent of political views underlying the above two policy approaches, a necessary component of any effective response to the problem of unemployment is accelerated growth of new industries: this can create new employment to replace jobs being lost to business rationalisation and competition from low-cost countries. A policy to encourage growth of new industries cuts across the previous two policy approaches, and continues the centuries-long pattern of economic history: growing labour productivity, innovation and international trade endlessly reduce the demand for labour in older industries, while the growth of new industries endlessly creates new demands for labour. This pattern is seen clearly through the twentieth century: major employers at the start of the century in Europe included farming, horse-drawn transport, textiles and clothing production, coal-mining, steam-engines and domestic labour. By the end of the century major employers included car manufacturing, concrete construction, oil production and sales, electricity generation and distribution, government services, air travel, hotels and tourism. Incomes rise with the growth of productivity of work; consequently a rising world average living standard requires a growing number of different industries.

It is argued in this paper that a key economic benefit of developing a passenger space travel industry arises because a policy of maximising the creation of new industries in the early 21st century specifically requires extending economic development into space, for which adequate know-how has existed for decades. From this point of view, the question of how large the space tourism industry might grow is therefore of great importance. Unfortunately, in comparison with the $1 trillion that has been spent by OECD space agencies, only very little research has been done on this subject. However, as discussed in [2], the data available on both the demand for and the potential supply of space tourism services suggest strongly that this new industry can grow sufficiently large that cost-benefit analysis justifies substantial public investment in its growth.

Unfortunately, if judged by the level of activity seen in 2006 (when this paper was prepared), one would have to conclude that Europe and European companies will play little role in the growth of space tourism. The only significant investment had been in US projects, as shown in the following list of recent progress towards passenger space travel in the USA:

• The X-Prize Foundation was established in 1996 to set up a $10 million prize for sub-orbital space flights in reusable vehicles.
• The Space Tourism Society (STS) was also established in California in 1996, and has held a number of major events
• The Space Transportation Association established its Space Travel and Tourism Division in 1998, which held annual one-day conferences from 1999 through 2001.
• The first university course on space tourism started at Rochester Institute of Technology in 1999. (The second and third such courses are in Japan.)
• The Suborbital Institute (SOI) was established in 2000.
• In 2000 the FAA Associate Administrator for Commercial Space Transportation drafted plans for the innovations needed in airspace management, such as creating a system of "Space Transition Corridors" (STC) to blend air travel and space travel, and invited international collaboration [16].
• The development of "SpaceShipOne" and its successful capture of the $10 million "Ansari X-Prize" in 2004 proved that space flights could be performed safely at a small fraction of the cost of space agencies' expendable rockets. This stimulated other companies, notably including Virgin Galactic, Rocketplane-Kistler, X-Rocket, Armadillo Aerospace and X-Cor to plan sub-orbital passenger flight services in the USA.
• The FAA published safety rules for sub-orbital passenger flights in 2005.
• The Personal Spaceflight Federation was established in 2005 to represent the interests of the growing commercial human space flight industry.
• As of late 2006 commercial Spaceports for sub-orbital passenger flights are currently under development or being planned in California, New Mexico, Oklahoma, Virginia, Ohio and Florida in the USA (as well as in Singapore and United Arab Emirates).
• A demonstrator for the sub-orbital, vertical take-off and landing ( VTOL) passenger vehicle, Blue Origin, made its first test-flight in Texas in late 2006, and the company Orbital Outfitters Inc was also established.

Compared to this growing stream of activities, the amount in Europe is still small (although it has grown in early 2007). However, this failure of Europe to match the USA in activities supporting the development of a passenger space travel industry is not for lack of either ideas or innovative individuals in Europe, as can be seen from the following list:

• The first book on space tourism was published in England in 1990 [3].
• Bristol Spaceplanes Ltd was established in 1990 to develop passenger-carrying spaceplanes.
• The first International Symposium on Space Tourism (ISST) was held in 1997 in Bremen; it was a popular success with great media coverage.
• The British Interplanetary Society held the second "Anglo-Japanese Space Tourism Conference" in London in 1999.
• The second ISST was held in 1999 in Bremen; this was also very successful. However, the 3rd ISST planned for 2001 unfortunately became impossible due to opposition from senior space industry staff.
• The British Interplanetary Society held conferences on space tourism in London in both 2005 and 2006.
• In 2006 an EU contract was awarded to EADS and Dassault to study legal aspects of space tourism [17].
• In January 2007 an Esa study contract was awarded to Starchaser Industries Ltd for work on a passenger rocket project.
• In June 2007 the major aerospace company EADS announced its "Spacejet" project. This may lead to the change in European policy which the author advocates, though this is not yet clear; having uncompetitively high costs is a risk facing all European industry in the era of global competition.

In summary, there has been very little investment in relevant research and development activity in Europe, including in vehicle development. (Although the Virgin Group is a British-based company, it established a US corporation to invest in a US-built vehicle to operate in the USA.) There has been no European response to the FAA's invitation in 2000 [16]; to date this represents 7 years of silence, letting the USA run ahead of Europe in establishing the fundamental regulatory infrastructure for integrated aerospace management.

This raises the question: "Why are European leaders so slow?" It will be interesting to read historians' explanations in due course. However, all space agencies have shown strong resistance to developing passenger travel: Nasa remains as resistant to the subject as Esa. Within the US federal government it is the FAA which is supporting efforts to develop sub-orbital space travel services. This begs the further question: "Why are European aviation authorities so much slower than the FAA?" It is noteworthy that progress in the USA is largely driven by private individuals and companies. Civil aviation authorities work primarily to help the growth of commercial aviation, not to perform their own "missions" like space agencies. Early investment in innovative and therefore risky new ideas is a very important role in the economy which is not being performed on a sufficient scale today, as discussed above. Moreover, the venture capital industry in the USA is proportionately several times larger than in most European countries. It is therefore an interesting challenge for Europe to mobilise some appropriate quantity of its immense financial resources in this direction. Some suggestions are made in the final section below.

In view of the potential importance of opening the resources of space to large scale use, Europe's currently lagging behind the USA raises broad questions such as: "What role does Europe intend to play in the world?" and "Are European leaders content merely to follow the USA?" A policy of following behind the USA would bring economic and strategic risks for Europe, in view of the rapid growth of low-cost competition from rapidly developing countries such as China and India, which are also targeting the space industry and competing for resources worldwide. A European space policy of merely continuing "business as usual" would thus bring the danger of losing the whole space industry to other countries. The author argues that, rather than continuing to fall behind the USA in this field, Europe would benefit greatly by making the efforts needed to catch up. Moreover, interestingly, Europe undoubtedly has the ability to do so.

European governments' resistance to even considering passenger space travel is somewhat surprising, because Europe's aerospace industry is large, and civil aviation is successful and ambitious. Moreover, among other assets of value for developing a vigorous space tourism industry, European engineers have a history of pioneering rocket-planes. First developed before jet aircraft during the 1930s, military rocket-planes such as the German Me-163 were developed to operational level during the 1940s. Experimental rocket-planes such as the French Sud-Ouest SO.9000 and the British Saunders Roe SR.53 were developed and test flown during the 1950s. In the early 1950s also, a rocket-assisted Comet airliner was test-flown to enable rocket-assisted take-off for passenger flights. Pioneering work on reusable, vertical take-off and landing ( VTOL) passenger rockets was done in Germany in the early 1970s [18].

Furthermore, Europe has a potentially great advantage over other countries in the form of the experience it accumulated in developing, manufacturing, test-flying, certificating, operating, maintaining and repairing the fleet of Concorde supersonic airliners. If this experience with Concorde is used to develop a sub-orbital travel industry, rather than allowing the accumulated know-how to disappear now that Concorde services have ended, it could prove to be a very valuable precedent. This is because many aspects of the Concorde project were pioneering, involving developing the entire system for a technologically unprecedented, commercial, passenger-carrying vehicle. This involved extending test and certification procedures for aircraft and equipment to a new flight regime, which in turn required innovative engineering design, lifetime testing and maintenance procedures, and related staff training and accreditation.

Another field for innovation was developing new international air traffic rules on every route. These were necessary to ensure that no airliner flew directly underneath Concorde, so that it could descend to low altitude immediately in the case of a solar flare which would give crew and passengers an unacceptably heavy dose of radiation. This system also required innovation of solar weather-monitoring and flight crew radiation dose monitoring.

Concorde marketing too included many types of trip - not just the daily "bread and butter" flights for transatlantic commuters, but a range of offerings including supersonic flights over the Bay of Biscay, day-return trips from Europe to the Pyramids, round-the-world trips, and others. This involved not only market research, package development and advertising, but also international itinerary planning and negotiations, insurance and legal issues. All of the above experience is directly relevant to developing passenger space travel services.

In addition to the required technological know-how and facilities, Europe also has a good market environment, including a large population of technically educated young people, unique cultural vigour, excellent international relations, and a large population with high disposable incomes. Hence Europe surely has the potential to play a leading role in establishing and supporting a healthy commercial passenger space travel industry. Consequently, if European policy-makers provide sufficient budgetary support soon to civil aviation organisations, European companies could dominate this new industry.

The commercial failure of Concorde is said to have had a negative impact on European aerospace technology development; for example, it may have delayed European policy-makers from recognising the potential value of space tourism. In narrow accounting terms the project's return on investment would be calculated as close to -100%. However this excludes the many positive "spillover" benefits of pioneering a range of technical capabilities that have since been used in other European aerospace projects. It is widely agreed that a new generation supersonic airliner is not commercially promising (although substantial funding of SST research continues). However, this is not the only way of using the know-how developed with Concorde; it has been well argued that experience of developing Concorde made Airbus possible. Furthermore, sub-orbital spaceplanes, which have been technically possible for 40 years, offer a much better follow-on project, not least because their initial cost is much lower than a follow-on supersonic airliner, and the potential demand revealed by market research is much higher.

The Concorde project's total cost was some 1.5 billion pounds through the 1960s and 1970s [19]. Allowing for inflation, this would be of the order of 10 billion Euros today, which is equivalent to 2 - 3 years of the subsidy given to the space industry in Europe. If the engineering and financial resources used for Concorde had been used to develop space travel, starting with sub-orbital passenger flights in the early 1970s, the total cost would have been far less than cumulative government space industry expenditure, and it would have had far greater economic benefit - not least by sharply reducing the costs of other space activities. This gap between "aero" and "space" needs to be closed.

France has played the major role in financing space agency activities in Europe, and has also been the loudest European voice warning against US hegemony. However, to date France has been the major opponent of space tourism in Europe, with no substantive research on the subject being published by French researchers to date. Ensuring that Arianespace maintains an independent European launching capability has been valuable, but this is not a satisfactory end-point of space development in Europe: launching satellites on expendable rockets is a small-scale business with poor growth prospects, which faces increasing competition from lower-cost operations in China and India. By contrast, in 2002 a Nasa-funded study estimated that the demand for sub-orbital tourist flights alone may be as much as four times the commercial satellite launch market (which has received tens of $billions of subsidies) [8]. This shows that ignoring current US progress in the field of passenger travel to concentrate on satellite launch is clearly contrary to Europe's economic interests.

In addition, France has suffered from high unemployment for more than a decade, particularly among the young and among immigrant families (centred in subsidised housing estates in big cities). France therefore has a particularly urgent need for new industries. Yet French government staff have given the strongest resistance to permitting funding of research on space tourism. There is therefore a major disconnection between French economic policy-makers and space policy-makers, which needs to be resolved urgently in favour of economic growth in space - which requires space tourism. At worst, the alternative would be the tragic betrayal of France's long-standing international culture, through the entirely unnecessary creation of a divided society with a permanent and growing "underclass".

The US Department of Commerce explained in 2002 that sub-orbital travel services will be of great value towards developing orbital vehicles:

"Understanding the full significance of sub-orbital RLV (reusable launch vehicle) development requires recognition not only of what sub-orbital RLVs may accomplish in their own right, but also of their significance as a transitional step towards orbital RLV development . . an operational sub-orbital RLV . . will provide a technology "stepping-stone" towards orbital RLV development . . and will pave the roadway for appropriate RLV regulatory, insurance and financial policies and strategies" [20].

Consequently, if public funding to develop low-cost orbital travel services grew to reach even 20% of government support for existing space activities, or about 1 billion Euros/year, the much larger market for orbital travel could be growing rapidly within 15 years. This could create millions of jobs directly and indirectly, following the civil aviation paradigm, in which airline operations directly and indirectly create 20 times more jobs than aircraft manufacturing alone. In sharp contrast, current space activities based on expendable rockets which fly only once generate little more employment than their manufacture alone.

As discussed in an earlier JBIS paper [2], once started, low-cost orbital space travel could lead to rapid growth of a range of related service industries, including orbital accommodation and hotels, which could be handling millions of guests/year within a few decades. In doing so it would stimulate a wide range of other business activities in space, starting incrementally through selling a range of services and supplies to orbital hotels, and growing to include manufacturing in orbit, and use of non-terrestrial resources. Thus, one of the most valuable long-term effects of the growth of space tourism will be to stimulate the development of an extra-terrestrial economic system - which need have no damaging effects on Earth's environment. This is of the greatest importance for permanently ending the "resource wars" which have marked the start of the 21st century so ominously [21]. Continuing to live in an economically "Closed World" would lead humanity inescapably to endless warmongering [22]; this contrasts with the peaceful future offered by the "Open World" philosophy of the Space Tourism Movement, as discussed in [2, 10].

The developments enabled by space tourism could ultimately lead to a new European Renaissance. Driven today by the neocon vision of a closed world leading to resource wars, elitism, and a "race to the bottom", the current ruling paradigm of government space activities can be summarised as "expendable launch vehicles and surveillance satellites". By contrast, the vision of off-world industrial development starting a major new axis of economic growth leads to an "Open World" and spreading welfare, in which the paradigm of space activities is "passenger space vehicles and a new world to develop".

The development of low-cost travel to orbit is therefore also the key to fundamental, permanent solution of global scale environmental problems [2]. Europe is already the de facto world leader of international activities to preserve the Earth's environment; consequently this result will match Europe's abilities. World leadership in taking steps to reduce the danger of global warming and other environmental problems is something of which Europeans can be proud. However, it is vitally important that environmentalists do not "throw the baby out with the bath-water". Studying for a doctorate on the economics of delivering solar power from space to Earth, the author learned the central importance of greatly reducing the cost of space travel in order for humans to benefit from the unlimited resources of space, rather than fighting over the Earth's limited resources [2, 21]. The environmental movement must recognise that sustainable economic growth can include any amount of economic growth outside the Earth's eco-system, which will be enabled by the development of low-cost orbital travel.

If space activities are to contribute to the European economy - that is, create new jobs and increase society's wealth - they must supply services which large numbers of the public choose to buy in large amounts. There is no escape from this conclusion. For this reason alone policy makers must plan to aid the growth of space tourism, or they will continue to fail in their responsibility to achieve economic benefits from space investment.

In view of the huge economic cost of having delayed the development of passenger space travel for 40 years (discussed in [2]), it must be considered an extreme failure for economic policy makers to have permitted space policy makers to prevent the growth of space tourism for unspecified reasons - particularly at a time of high unemployment. Economic policy makers might claim ignorance: "We were not told" - but it is the predictable result of creating a monopoly organisation and only listening to advice from it and its dependents. There is no secret about the ill effects that result from monopolistic arrangements: costs rise; innovation is suppressed; the monopoly becomes self-perpetuating; it is manipulated by special interests; and other ills understood for centuries by social scientists.

It is therefore the responsibility of economic policy makers to ensure that investment is made in developing these vitally important technological capabilities. It is not acceptable that a small, privileged group of people should be able to prevent such economically desirable developments for decades. Governments have played important roles in the development of highways, ships, canals, railways, steamships, cars, aeroplanes and many other industries; it is inconsistent to not invest in low-cost space transportation.

The failure to invest in this development which European space organisations have shown over the past 15 years is a good reason to give the responsibility to civil aviation organisations, as the US federal government has done successfully. This is even clearer when one considers that the UK Civil Aviation Authority has such relevant experience as having test-flown rocket-assisted Comet airliners for passenger-carrying as long ago as 1952, and having certified the supersonic airliner Concorde which required major innovation in many engineering and regulatory aspects.

Europe should make good use of its talented people; it needs to treasure innovators - not try to suppress them. Continuing to suppress them is not only wasteful, it could be disastrous for Europe, in face of the coming Chinese/Indian "trade tsunami". European aerospace, environmental and tourism industries have a comprehensive range of skills, and are world-leading in many respects. It is not desirable that the only passenger-carrying space vehicles under development should continue to be American or Russian - or Chinese or Indian - but not European. The policy stance that "space passenger travel should be developed on 100% commercial basis" is inconsistent, antihistorical - and could be economically suicidal for Europe. The required policy steps should include:

• Acknowledge the importance of developing passenger space travel in Europe.
• Provide budgets to the civil aviation industry to fund relevant R&D activities, including safety issues and developing vehicles and facilities.
• Start with suborbital passenger-carrying vehicles.
• Fund both horizontal take-off and landing ( HTOL) and vertical take-off and landing ( VTOL) vehicles, because both technologies will play major roles in the future, and the costs of sub-orbital projects are low.
• Collaborate urgently with the FAA concerning their proposals for world-wide aerospace traffic management.

Publicly affirming the importance of large-scale economic development in space will have valuable educational effects. In particular, bringing space tourism "in from the cold" and acknowledging its importance in making the goal of economic growth in space feasible, will attract serious attention from the commercial world. The desperate lack of new industries in Europe ensures that, once the business world understands that space is not merely a desert fit only for government-funded research, but comprises a vast range of promising business opportunities, the flow of commercial investment will grow rapidly.

One of the failures of present economic arrangements is that a vast pool of savings is merely "churning" in the world's financial markets in a zero-sum search for short-term profits. This has no net social benefit, despite all the work involved, and despite the record profits earned by financial corporations - and it imposes a net cost due to the economic instability this churning causes. When just a small fraction of these savings are redirected into economically productive, employment-creating investment in space-related hardware and services outside Earth's eco-system, human civilisation will finally be embarking on a permanently sustainable, peaceful growth path. This is the prize that Europeans have neglected for so long - and will hopefully soon start to strive for. Can there be any more exciting challenge for young Europeans?

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