The global space economy has reached a turning point, hitting US$626.4 billion in 2025 and setting a course to breach the US$1 trillion mark by 2034, according to the 12th edition of the Space Economy Report released by Novaspace.
The report portrays 2025 not just as a year of growth, but as a “foundation year” where the sector transitioned from experimental expansion to a mature, security-oriented industry. With a projected compound annual growth rate (CAGR) of 12%, the market is being reshaped by assertive government spending, a recovery in private capital, and the increasing “softwarization” of space infrastructure.
The Novaspace analysis distinguishes between the core space market—activities directly tied to infrastructure like manufacturing and launch—and the broader ecosystem of space-enabled services.
While the core space market itself is substantial, valued at US$236 billion in 2025 and projected to reach US$323 billion by 2034, the wider economy is heavily leveraged on downstream solutions. Space-enabled services, including Position, Navigation, and Timing (PNT), continue to occupy “a significant share” of economic value. But it is defence and sovereignty which are becoming “dominant market drivers in 2025.”
The emerging defence and sovereignty drivers is something we’re now seeing in Canada and will be reflected in Canada’s space economy throughout this decade.
Jan Clarence Dee, Novaspace Senior Space Consultant said, “Government space spending reached US$138 billion, driven primarily by security, sovereignty, and exploration programs. These priorities are reshaping procurement models and reinforcing the potential for commercial actors in national space strategies.”
After a period of correction, private investment showed resilience in 2025, totalling US$9 billion—the strongest annual increase since the peak of 2021. However, the capital is flowing differently than in the boom years. Investors are favouring late-stage companies with established revenue models and lower risk profiles.
This maturation is further evidenced by a wave of consolidation. The report notes 54 merger and acquisition (M&A) transactions closed in 2025, with another 16 pending. Companies are aggressively pursuing vertical integration and portfolio rationalization to survive and thrive in a more competitive environment.
Beyond the raw numbers, the report highlights a qualitative shift in the industry: the “softwarization” of space infrastructure. As hardware becomes more standardized, value creation is shifting toward software-defined capabilities that make space assets more flexible and resilient.
While the space economy is well on its way along its path to trillion-dollar era it could get an additional push with the recent news of the SpaceX request to the FCC to license a new orbital data center of 1 million satellites and other as yet announced constellations.
The full report is available for sale from the Novaspace website.