The Goldman Sachs Global Institute has published what amounts to a landmark orientation document for anyone thinking seriously about where the next industrial frontier is taking markets, geopolitics, and corporate strategy. The Second Space Age: How Markets, Technology, and Power Are Reshaping the Final Frontier, authored by George Lee and Dan Keyserling of the Goldman Sachs Global Institute, is not speculative futurism. It is a structural analysis of an economy already in formation, one that demands serious attention from advisors and institutional investors alike.
From Government Program to Industrial Platform
The first space age was a government project. Cold War rivalry provided the funding, the mission, and the institutional architecture. As Lee et al. make plain, that era gave rise to satellite communications, GPS, and Earth observation services, each originating in military R&D and later commercializing to reshape everyday economic life. The Apollo Program alone mobilized roughly 400,000 people and 20,000 companies. Its downstream effects seeded the US semiconductor industry, driving the cost per microchip from $32 in 1961 to $1.25 a decade later.
What has changed fundamentally is who builds the infrastructure. The economics of reaching space have shifted in ways that no longer reserve the frontier for sovereign actors. Reusable launch systems, smaller satellites, and modern manufacturing have compressed the cost of sending a kilogram into low Earth orbit from $65,400 on the Space Shuttle in 1981 to $1,500 on the SpaceX Falcon Heavy today, a reduction of more than 25 times. As Lee et al. put it, "private-sector companies now build the infrastructure once exclusive to government programs, and capital markets provide the critical funding for space exploration and commercialization."
The Commercial Beachhead: LEO and Starlink's Proof of Concept
Low Earth orbit is the clearest commercial validation point in the report. Starlink, SpaceX's broadband constellation, has served more than 10 million customers and generated more than $11 billion in revenue in 2025 alone, with nearly 10,000 satellites in orbit and thousands more approved for deployment. Amazon is building a competing network through its acquisition of Globalstar, adding radio spectrum rights for direct-to-cell communications in the process. The competitive dynamics between broadband and DTC services differ meaningfully: broadband carries high switching costs through physical terminals, while DTC partnerships with existing cell carriers offer instant scale without hardware.
The deeper structural point is not which company wins. It is that, as Lee et al. argue, LEO is "becoming a new connectivity layer that expands the addressable market for communications, enables new categories of digital services." Ambient connectivity, available across geographies and industrial settings where terrestrial networks fail, creates a platform for second-order applications that do not yet exist at scale.
Where the Supply Chain Choke Points Form
The report draws an explicit analogy to traditional industrial supply chains. Space will develop the same concentration points, infrastructure nodes, and regulatory bottlenecks that define value distribution in other sectors. Launch access is the upstream choke point. Satellite slots, allocated by the International Telecommunication Union on a first-come, first-served basis, are already becoming a contested resource. Early movers like SpaceX hold structural advantages that compound as orbital congestion increases.
Collision risk is rising in parallel. With tens of thousands of additional satellites planned for LEO over the next decade, space debris management and domain awareness are becoming commercial necessities, not just safety considerations. The Kessler scenario, in which a single breakup event triggers cascading collisions, is cited as a systemic risk to the entire orbital infrastructure stack.
Astropolitics: Strategic Competition Extends into Orbit
The report is explicit that commercial and military interests are no longer separable. The architecture of modern military power runs through orbital infrastructure. When Russian cyberattacks blacked out Ukrainian internet access, Starlink filled the gap. Russia has reportedly shared satellite imagery with Iran to support targeting of US military assets. GPS spoofing and jamming have become standard tactics in gray-zone conflict.
Defense spending on space reflects this reality. US Department of Defense investment in space-based systems is projected to reach $59.7 billion in fiscal year 2027, a 26% compound annual growth rate from FY2020. China has grown its space sector investment from $340 million in 2015 to $2.9 billion in 2024, and Chinese officials have been explicit that commercial and civil space capabilities are designed to serve military ends. The governance gap is significant: the five international space treaties underpinning space law were written during the Cold War and do not address space traffic management, debris removal, or in-space manufacturing. Russia and China have declined to sign the US-led Artemis Accords, signed by 61 nations, which establish norms for responsible behavior in space.
Capital Markets Institutionalization Is Underway
The financing model has evolved decisively. More than $55 billion was invested into the space ecosystem in 2025, and Q1 2026 posted a record $36 billion in a single quarter. Since the start of 2025, aerospace companies have raised $89 billion through IPOs, including SpaceX's $86 billion debut, the largest in history. The global space-based economy is projected to reach $1.8 trillion by 2035. Space is transitioning from a venture-backed niche to an institutional asset class.
5 Key Takeaways for Advisors and Investors
- Launch cost compression is the enabling thesis. A 25-fold reduction since 1981 has made the space economy commercially viable. The trend is likely to continue as competitors replicate reusable rocket technology, further democratizing orbital access and expanding the addressable market.
- Orbital infrastructure is the next industrial supply chain. Firms controlling launch capacity, satellite slots, ground infrastructure, and space-derived data will capture disproportionate value. The analogy to internet infrastructure incumbency is direct and instructive.
- LEO connectivity is not a telecom story alone. Ambient satellite connectivity enables autonomous systems, cross-border enterprise networks, disaster-resilient communications, and AI-adjacent orbital compute. Exposure should be considered across sectors, not only aerospace.
- Defense spending is a durable demand driver. With the DoD projecting $59.7 billion in space-based systems spending in FY2027, government contract flow will remain a foundational revenue stream for space primes and their supply chains. The US-China rivalry structurally sustains this spending trajectory.
- Public market institutionalization creates both opportunity and selection risk. The wave of aerospace IPOs since 2025 signals a maturing asset class, but also demands rigorous underwriting discipline. Companies that can pair technical execution with public-market credibility, as Lee et al. note, will be better positioned to scale, consolidate, and navigate critical chokepoints.
Footnote:
1 Lee, George, and Dan Keyserling. The Second Space Age: How Markets, Technology, and Power Are Reshaping the Final Frontier. Goldman Sachs Global Institute, August 2026. https://www.goldmansachs.com/pdfs/insights/articles/the-second-space-age-how-markets-technology-and-power-are-reshaping-the-final-frontier/GS_Jul_GSGI_Second_Space_Age_08-11.pdf
