U.S. companies invest billions of dollars annually in research and development (R&D) to discover new products serving unmet needs. Increasingly, more industries are eyeing space and its potential to kickstart a fresh wave of innovation.
The near-weightless state of microgravity offers a distinct environment to conduct research and manufacturing. A recent McKinsey report explores how companies are rethinking how they can use space to develop new products, enhance current offerings, and decrease cost and development timelines.
The Importance of Space Station Experiments
While astronauts have been conducting experiments since the 1970s, experiments aboard the International Space Station (ISS) over the last 20 years have yielded unique insights about medicine, materials, and manufacturing.
As the United States and its partners prepare to retire the ISS, a new class of private-sector space companies has emerged to spark the next wave of groundbreaking research. They are building infrastructure that will provide continued access to low-Earth orbit (LEO) and solidify America’s position as the global leader in scientific research.
Commercial space stations or LEO destinations (CLDs) will house laboratories facilitating research conducted by astronauts, as well as automated experiments enabled by companies with expertise in preparing experiments for space, collecting the data, and returning it to Earth.
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Billions in Potential Value
Microgravity-based R&D can potentially create billions of dollars in value for companies in the biotech, nutrition, personal care, pharmaceutical, and semiconductor industries.
The pharmaceutical industry spends about $280 billion annually on R&D and $80 billion on work with contract research organizations, companies that specialize in conducting clinical trials, according to the report. For medicine, microgravity provides the opportunity to study aging, disease, and test therapeutics in a distinctive environment—and obtain results faster than on earth.
Pharma R&D in Space
Pharmaceutical companies will use space environments to work on the following items:
Disease Modeling: The need to keep astronauts healthy on long-duration spaceflights has led to experiments to better understand the effects of aging and disease progression. Scientists found that studies that took years on Earth could be completed in mere weeks in microgravity.
Drug Development: Research on the ISS has shown that protein crystals grown in space are larger and more uniform than those grown on Earth. Since that discovery, drug companies and academic researchers have conducted hundreds of protein crystal growth experiments on the ISS. This could have significant implications for pharmaceutical research, potentially enhancing drug formulation and effectiveness. In February, crystals for the HIV drug Ritonavir that were made in space returned to Earth in a capsule for analysis.
Organoids: Miniature versions of organs resemble living human tissues and can be used as 3-D models to evaluate disease. Since it is easier to replicate the 3D structure of natural tissue in microgravity, organoids can reach greater maturity levels more efficiently in orbit, which allows scientists to better understand cellular behavior and tissue development. Just this April, cargo returning from the ISS included heart tissue successfully fabricated in space for the first time. That followed the successful bioprinting of an artificial meniscus on the ISS. Scientists are now also looking at leveraging microgravity to manufacture retinas in space.
Impact on Other Industries
Space-based R&D could similarly impact product development for the nutrition, personal care, and semiconductor industries. According to the Semiconductor Industry Association, R&D and capital expenditures by U.S. semiconductor firms totaled $109.6 billion in 2022, with a compound annual growth rate of 6.3%. The personal care industry spent more than $3 billion on R&D in 2016, and a 2023 survey found that nearly three out of four (72%) food and beverage manufacturers ranked product/service innovation among their top business strategies.
What if space-based R&D can capture a small portion of these budgets? It’s exciting and important that business opportunities outside the traditional government customer are developing for the space industry. To realize this, space companies will need to invest in learning deeply about these industries’ businesses and integrate themselves into R&D value chains.
Start of a New Economy
This could herald the start of the LEO economy. To get there, the U.S. government will need to support it. For example, a government-issued license is needed to return the experiments to Earth. The industry depends on the FAA to approve reentry licenses in a timely manner so that customers can be assured of allocating budgets and amending R&D plans to leverage the unique experimental value of microgravity.
The U.S. Chamber is excited to help our member companies connect with these adjacent industries and ensure the proper policy and regulatory foundation is in place so that Earth can benefit from innovation opportunities in space.
About the authors
John Neal
John Neal serves as the Executive Director for Space Policy at the U.S. Chamber of Commerce where he leads the Chamber’s Space Industry Council.
