Sending cargo into orbit is shrinking faster than shipping did during the steamship revolution of the 1800s, and costs could drop by more than 90 percent again by 2040, according to a Cambridge-led study that suggests space is turning into a market faster than rain.
The study, published in PNAS Nexus by the University of Cambridge’s Bennett School of Public Policy and the Politecnico Institute of Turin, analyzed more than 4,400 launches between 1960 and 2025, the largest worldwide dataset of rocket launches to date.
The average cost of putting a kilogram into orbit has already fallen from $87,023 in 1960 to $3,868 in 2025, a drop of more than 95 percent. For every time the global amount of cargo in space has doubled, the cost per kilogram has fallen by 21.2 percent, surpassing the 15.5 percent decline recorded for transatlantic wheat and cotton shipments after the steam crossing of the SS Savannah in 1819.
“The cost of space launch technology is now falling faster than during the biggest transportation revolutions in history,” said Alessio Terzi, the assistant professor who led the study.
“Steamships reduced costs with a large increase in global trade. Space technology, on the contrary, has achieved even greater reductions on a much smaller scale. This suggests that there is considerable room for cost reduction and the industry may now be on the verge of comparative economic growth,” he said.
If the situation is favorable, the researchers predict that a kilogram in low Earth orbit will cost $1,600 in 2030 and $300 in 2040. SpaceX’s Starship rocket could bring costs down to about $1,000 a kilogram, making large orbital projects more viable.
For UK entrepreneurs, this is not an abstract race between billionaires. Britain’s space industry is dominated by small firms, with around 90 per cent of its businesses turning over less than £5m, building parts, satellites and launch services at cheap prices that make commercial sense. New business models are already emerging: London-based startup BioOrbit is testing pharmaceutical production in low Earth orbit, Space Solar is developing space-based solar power, and NATO’s innovation fund has supported British startups building space factories.
“Rapidly falling startup costs could pave the way for space colonization and commercial activity far from low-Earth orbit. Cheaper startup costs could open up opportunities around solar energy production in orbit, asteroid mining and a sustainable economy that produces fuel, food and infrastructure in orbit or on the moon,” said Terzi.
The market has grown significantly since 2020, when payloads launched into orbit are growing at around 31 percent per year, compared to an annual growth of 4 percent between 2000 and 2019.
There is, however, a common catch for any small business dealing with a prominent provider. SpaceX accounts for about 75 percent of the total cargo sent into orbit, a market share that Terzi previously estimated was greater than the East India Company’s ability to ship to the East Indies in the 19th century.
“Economic theory suggests that a quasi-monopolist that makes large profits will have a strong incentive to charge high prices to potential customers, and some evidence already points to this,” the researchers said, warning that pricing power, as well as national tensions, could slow the decline.
The history of commercial spaceflight is also littered with costly failures, as investors in the Virgin Orbit acquisition can attest.
However, the way forward is clear. “As start-up costs decrease and commercial activity increases, we are entering an era where mobility is like any other economy, driven by incentives, trade and investment, and economists should pay close attention,” said Terzi. Business owners may behave similarly.
