A question about “what will a lunar economy look like?” led to a lively discussion about the role of government in potential lunar markets at the commercialization panel at the Canadian Lunar Workshop on June 1st.
Panelists included Canadian space industry veterans Dr. Nadeem Ghafoor (CEO of Avalon Space), Mina Mitry (Co-Founder/CEO of Kepler Communications), Lindsay Papsidero (Parsec Director, Crescent Space Services), Ewan Reid (Founder/CEO of Mission Control Space Services) and Daniel Sax (Co-Founder/CEO of Canadian Space Mining Corporation).
Moderator Iain Christie—who also contributes here at SpaceQ—posed a variety of questions for panelists regarding lunar economics, and they dove into the questions with gusto. Christie himself drew on his extensive experience in the space sector, most recently as the CEO of SideKickSixtyFive Consulting.
Lunar Economic Evolution
Christie started the conversation by asking when a lunar economy will develop, qualifying it by saying that “a lunar economy does not mean suppliers who principally supply government…a real space economy is private sector entities doing business with one another.” When asked about whether a “real” lunar economy will arise, Ghafoor said that “it’s going to be a continual progression” just as the current space economy has been, and a key lunar milestone has been the development of a variety of landers that are funded by NASA, but aren’t owned by NASA. Papsidero agreed that it’s started, that it’ll grow, and that a “critical point” will be when companies can prove that they’ll survive the lunar night.
Mitry said that the critical factor will be “when we have exports outside the space sector,” meaning the moment non-space-sector companies are benefiting from the space sector. He pointed to the LEO economy as an example, and how the lunar economy will be real when it can “dramatically improve life outside Earth and on Earth.” Sax said that he felt that an economy doesn’t need to fit Christie’s definition but that a “government-backed economy” might be evolving on the moon, and that while there will be “a healthy business economy” it will nevertheless be sustained by government to a great extent.
Reid was asked by Christie about how things were different when they were contracted by commercial entities instead of government. Reid said that the two were closely linked; it was their work with the Canadian government that opened the door for their commercial sales, including their export sales. Ghafoor added to that by saying that “governments are the representation of national interests,” and that they’re going to advocate for those national interests in space. Papsidero said that even commercial entities like hers want to have governments as key customers, as it will help convince investors that “this is a good business and a healthy business to be in…that there’s going to be a strong customer base.”
Government as Customer vs. Market as Customer
Christie drew another distinction; between “government as a customer” vs. “government as the customer,” i.e. where the only customer that the company services is the government.
On that point, he got more agreement. Papsidero said that this was one of the big shifts with NASA; that they’re looking to become “one of many customers,” and that her company was looking to become a “translation layer” between what NASA wants and what the broader customer base wants. She said that government will need to “buy it differently”; that commercial products won’t necessarily have all the bells and whistles, but that the tradeoff will be greatly increased value for money.
Sax agreed with the idea that government agencies will need to approach buying differently, and that they’ll need to shift if they want to play their “important role in de-risking.” Mitra said that government procurement practices strongly affected their processes as well. Even though they may be “creating a market” in the lunar context, his company has still decided “not to bid actively on CSA work” owing to costly product assurance requirements by the risk-averse agency.
Mitra’s comment prompted another question from Christie: “how are we doing creating a market?” To answer, Reid returned to the point about government procurement, saying that the big flaw with the “lunar exploration acceleration program” is in the “acceleration.” The CSA’s whole process of RFPs and extensive phased competitive development is something that’s common in government, but not in private business, where they simply want to buy what they need and move on. Companies that adapt entirely for a government process will be badly prepared for private-sector customers, and that could seriously affect overall market development.
“What would you ask the CSA?”
Christie pivoted to a “lighting round” question: “if you would ask one thing of the CSA, what would it be?”
Mitra answered first, saying to “change the procurement approach to enable purely commercial endeavours.” Sax said that they should aim their funding choices so as to “create an industry, not to create individual widgets…we need to create entire industries.” He pointed to in-situ resource utilization as a logical choice, considering Canada’s leadership in mining. Papsidero said they should understand “other infrastructures that are underway that you can leverage,” instead of reinventing the wheel.
Ghafoor returned to the point about government support of industry, saying that “the thing that allowed Canadian industry to move at the speed of market rather than the speed of government procurement was the LEAP program,” and that “I would implore us not to throw out the one thing that put Mission Control, Canadensys and several other groups at the Moon already inside two years.” Reid concluded the round by saying he “wholeheartedly agrees,” that “it’s an amazingly exciting time for Canadian space.” When it comes to the $1.2b lunar utility vehicle, he believes the community should “ensure it truly does generate an ecosystem that’s contributing to that program, and not a single large prime getting all the funding and doing all the work.”
Q&A
Moving on to questions, one question was asked about sustainability. Sax said that companies should “do our best to export best practices,” Ghafoor said that this might be an opportunity to resolve geopolitical tensions, and Reid said that the more people that are “looking back at Earth,” the more that he believed people will “come together and solve big problems on Earth,” referring to the famous overview effect.
Another question focused on managing risk. Ghafoor pointed to ispace’s HAKUTO-R mission as a good example; while their lander ultimately didn’t reach the Moon’s surface, that was only one milestone out of a variety of successes, and the mission was overall successful despite that last issue. Reid, whose company was part of the HAKUTO-R mission, agreed with Ghafoor. He said “failure is an option,” and that a certain level of risk tolerance is a necessary part of the space sector.
Christie added that this is one of the major differences between public- and private-sector customers, and public-sector clients tend to be extremely risk-averse.