By Chris Daehnick, John Gang, and Ilan Rozenkopf
To serve an expanding space economy, nearly 7,500 active satellites orbit Earth and about 50 on average are taking to the skies every week.1 Many operate as part of multi- satellite constellations—serving commercial applications from remote sensing to communications to navigation. Governments are also expanding their satellite fleets for multiple missions. In the future, greater space exploration, the launch of commercial space stations, and even tourism could further increase launch needs. New companies are constantly entering the market and much uncertainty persists about their ambitions, as well as those of more established players. Forecasts for the number of constellations, and therefore required launch capabilities, thus vary widely.
In tandem with this rise in activity, the space industry is transitioning to a new generation of launch vehicles, leading to a range of possibilities in terms of availability and capacity. In light of these dynamics, both customers (commercial and government satellite owners) and suppliers must make tricky calculations to balance short-term opportunities against the imperative to control costs and flex to longer-term demand.
While government (military and civil) space activity remains a significant and growing source of launch demand, the private sector is the fastest-growing segment, amid technological advances and declining costs that have spurred innovation and commercial activity. The price of heavy launches to low-Earth orbit (LEO) has fallen from $65,000 per kilogram to $1,500 per kilogram—more than a 95 percent decrease.2 In part due to these efficiencies, companies and governments are putting thousands of new satellites into orbit.3 Elon Musk’s SpaceX is leading the way, with its Starlink program planning to launch as many as 42,000 satellites to provide global broadband and other services. 4
Satellite use cases span a range of applications. As of March 2023, there were 5,000 satellites serving communications, with the number of communications launches having grown by about 15 percent a year since 2017. There are about 1,000 active satellites for Earth observation and 1,500 for technology development, research, and other missions.5 Looking ahead, there are plans for a significant expansion to as many as 65,000 new communication satellites and 3,000 non-communication satellites (for applications such as Earth observation).6 In total, companies have proposed more than 100 new constellations. Direct-to-device concepts, which link satellites to cell phones, have also gained traction lately and could lead to additional new entrants. Even if not fully deployed, the new constellations will drive demand for services including intersatellite links, ground terminals, analytical support and, potentially, in-orbit maneuvering and debris removal.
A key driver of satellite proliferation is lower overall costs, enabled, for example, by more capabilities in small satellites such as cubesats, built from ten-by-ten-by-ten centimeter modules, and microsats, weighing less than 100 kilograms. These are used for applications such as Earth observation and in-orbit demonstrations of miniaturized technologies. Still, useful constellations (commercially or for government purposes) will require dozens to thousands of spacecraft. Moreover, as designs mature, satellites will tend to get bigger, suggesting medium and heavy launch capabilities will remain the most cost effective choice for deployment. And the new generation of satellites will operate for just five to seven years—allowing for technology refresh and reduced manufacturing costs. These factors are set to drive demand for significant launch tonnage.
Three scenarios for potential growth to 2030
According to the not-for-profit Space Foundation, the space economy is growing strongly, up 9 percent from 2020 to reach a value of $469 billion in 2021. 7 This was the highest recorded growth since 2014. To gauge the industry’s potential growth up to 2030, McKinsey modelled three scenarios, predicated on assumptions around the quantity, size, and timing of deployments (Exhibit 1).8 For each constellation, we estimated the total number of licensed or proposed satellites, expected mass, and likelihood of full deployment, which we then combined with views on launch dates and satellite lifespan. We also considered plans for non-constellation launches, such as commercial space stations, when creating the scenarios (see sidebar “Assumptions underlying the scenarios”).
- Radar, McKinsey, accessed March 1, 2023.
- Ryan Brukardt, “How will the space economy change the world,” McKinsey Quarterly, November 28, 2022; Chris Daehnick, Rob Hamill, Alexandre Ménard, and Bill Wiseman, “Is there a ‘best’ owner of satellite internet?” McKinsey, August 11, 2022.
- Chris Daehnick, Isabelle Klinghoffer, Ben Maritz, and Bill Wiseman, “Large LEO satellite constellations: Will it be different this time?” McKinsey, May 4, 2020.
- Starlink is responsible for almost half of all operational satellites. All have been launched in the past three years. Ramish Zafar, “SpaceX might not need 42,000 starlink satellites for quality internet coverage says president,” Wccftech, September 14, 2022.
- Radar, McKinsey, accessed March 1, 2023.
- In most cases, the maximum number of satellites has been announced or filed for; the quantity may change.
- “Space Foundation releases the Space Report 2022 Q2, showing growth of global space economy,” Space Foundation, July 27, 2022; Michael Sheetz, “The space economy grew at fastest rate in years to $469 billion in 2021, report says,” CNBC, July 27, 2022.
- Note these are only three of many possible scenarios; other variables include delays in launch and planned satellite lifetimes.
Assumptions underlying the scenarios
For the three scenarios, we made the following assumptions about launch demand:
- High. This scenario assumes that 67,000 satellites with an average mass of 1 ton are deployed by 2030. They are fully deployed within 4 years of initial launch, and satellites are replaced frequently, with an assumed service life of under 6 years on average. In addition, there are many heavy-payload-mass flights to space stations and beyond.
- Base. This scenario assumes that 24,000 satellites with an average mass of 870 kg are deployed by 2030. There is a slower rate of deployment, with constellations completed on average in 5 years, and an average satellite life of slightly more than 6 years of service. There is a moderate quantity of flights and payload mass (75% of high case) to space stations and beyond.
- Low. This scenario assumes that18,000 satellites with an average mass of 540 kg will be deployed by 2030. There will be slow deployment, taking over 5 years, and satellites will be kept in orbit longer, for nearly 8 years. There will be a low quantity of flights and payload mass (50% of high case) to space stations and beyond. For launch supply, the high-supply scenario assumes that Starship will achieve a daily launch rate by 2030 and have a fleet of 30 boosters and 60 ships. Launches of Falcon 9 will taper off, except for existing contracts, and be replaced with Starship launches. The high- supply scenario also assumes that other vehicles will achieve their anticipated rate capabilities within four to six years. In the alternative supply scenario, Starship is not included in the calculation. This scenario also assumes that Falcon 9 will reach and maintain a rate of 120 launches annually, while other vehicles reach expected rate capabilities within six years.