The cost of sending cargo into orbit is decreasing at a rapid pace, outpacing the decline in shipping costs during the steamship revolution of the 1800s. According to recent research, the cost could fall by more than 90 percent again by 2040, making space a growing marketplace rather than a niche pursuit.
The average cost of putting a kilogram into orbit has dropped significantly, from $87,023 in 1960 to $3,868 in 2025, a decline of over 95 percent. This trend is expected to continue, with the cost per kilogram falling by 21.2 percent every time the world's total volume of space cargo doubles.
This rate of decline is faster than the cost reduction seen in transatlantic wheat and cotton freight after the introduction of steamships. It is also outpacing the decrease in the cost of solar panels, a technology known for getting cheaper quickly.
Researchers project that if this trend continues, the cost of sending a kilogram to low-Earth orbit will be $1,600 by 2030 and just $300 by 2040. The development of new rockets, such as SpaceX's Starship, could bring costs down to around $1,000 per kilogram, making larger orbital projects more viable.
The UK's space industry, dominated by small firms, is poised to benefit from these changes. New business models are emerging, including the production of pharmaceuticals, solar power, and space-based factories. These developments could lead to a significant expansion of commercial activity in space.
Rapidly falling launch costs could enable a range of new possibilities, including space colonization, solar power production, asteroid mining, and a self-sustaining economy in orbit or on the moon. The market has accelerated sharply since 2020, with payload launched into orbit growing by about 31 percent per year.
However, there are potential challenges ahead, including the dominance of a single supplier, SpaceX, which accounts for around 75 percent of total payload sent to orbit. This could lead to higher prices and slower innovation, as well as geopolitical tensions that could impact the industry.
Despite these risks, the direction of travel is clear: spacefaring is becoming increasingly like any other economy, driven by incentives, trade, and investment. As launch costs continue to fall and commercial activity expands, it is likely that space will become an increasingly important part of the global economy.
