An artist's concept of a direct-to-home TV broadcasting satellite. Photo: Space Systems/Loral

The American commercial space industry generated $61.3 billion in direct and indirect economic effects in 1999, putting it on a par with many existing conventional industries, a new federal study concluded Wednesday.

The study, released Wednesday by the FAA at a commercial space transportation conference in Arlington, Virginia, is the first detailed quantitative study of the overall impact launches, satellite manufacturing, and satellite services have on the American economy.

The report broke down the economic impact of commercial space activities into three categories: direct, indirect, and "induced" spending. Of the three, direct spending -- purchases of equipment directly used in space endeavours, like engines and solar arrays, and wages for those employed by space companies -- accounted for just $9.6 billion of the total. Indirect spending, which includes purchases and labor for goods and services that help produce the equipment needed for space-related projects, accounted for $29.5 billion. The remainder, $22.2 billion, was accounted for as induced spending when those who profited from direct or indirect spending put that money into other portions of the economy.

The largest share of the $61.3 billion spent in the commercial space industry went into the satellite industry. The report found that $30.9 billion was spent on satellite and ground equipment manufacturing, and $25.8 billion on satellite services. Most of the rest -- $3.5 billion -- went into the launch vehicle industry, with the remainder going to remote sensing and other projects.

The report also found that the commercial space industry supports over 497,000 jobs, with over 450,000 of them in the satellite manufacturing and services sectors. Those jobs generated over $16.4 billion in earnings -- wages, salaries, and benefits -- in 1999.

While other studies in the past had attempted to put a figure on the contribution of space to the overall economy, this work is considered to be the most quantitative yet, said Herbert Bachner, manager of the Space Systems Development Division of the FAA's commercial space branch. The report was based on data from over 700 companies collected by the Satellite Industry Association (SIA) and used a detailed model of the overall economy used by the Department of Commerce to evaluate the economic impact of other industries.

The report was hailed by many in attendance at conference, who see it as a critical step towards legitimizing an industry that barely existed ten years ago and today still lives within the shadow of government and military space efforts in some respects.

"We need to be just another industry," said Ken Gordon, executive director of the Center for Space Policy and Strategy at The Aerospace Corporation. Space has been given special treatment by the government and the public as something of national interest dating back to the Cold War's Space Race with the Soviet Union, and not as a legitimate industry. "Government is not in the business of making money," he said. "This report represents the beginning of the end of our specialness."

Commercial Atlas rocket on the launch pad. Photo: Lockheed Martin

Gordon used the data from the report to compare the commercial space industry with established conventional industry. Ignoring the impact from induced spending, which is somewhat difficult to measure and controbversial, commercial space's $39 billion is about half of the economic impact from farming. It is also greater than the $25 billion from the textile industry and the $19.9 billion from tobacco, two sectors of the economy with much higher political visibility and lobbying impact than commercial space.

The FAA and other acknowledged some weaknesses in the report, including a region-by-region breakdown of the economic impact of commercial space. Carl Williams of the California Spaceport Authority, combining study data with his organization's own work, said he believes that California alone accounts for 20 to 25 percent of the national economic impact.

The report, based on 1999 data, also does not take into account the negative effects the commercial space industry has felt in the last year because of tightened export control regulations that have made it more difficult to launch commercial communications satellites on foreign boosters. A separate report issued earlier this week by the SIA ands the Futron Corporation estimates that those regulations cost the commercial space industry in California alone $1.2 billion and 1,000 jobs last year.

Bachner said the FAA would work with the Department of Commerce to refine the model used by the study in order to provide regional analyses and to also determine how many jobs supported by the commercial space industry come from direct, indirect, and induced spending. "This report is great," summarized Gordon. "We need more."