Why space is becoming the next global power frontier

On Earth and in outer space, humanity leaves no area unexplored in its search for resources and ways to improve life through vital services that raise living standards and open renewed horizons for creativity and innovation. These range from new applications that provide us with meteorological data, energy solutions, improved communications, support for aviation, and the growth of urban environments, and may even extend to space tourism in the future.

In the beginning, the development of the space economy was limited to governments, particularly the United States and the Soviet Union, with a purely geopolitical purpose until the early 1970s. Afterward, however, the situation changed with the entry of commercial entities into the field, especially in communications, as services shifted toward commercialisation. By the early 21st century, private companies had become partners in space technologies, with governments somewhat stepping back. These companies began funding space investments through investment funds or the private sector, in some cases surpassing even the levels of investment made by states in the space sector.

In recent decades, the perception of outer space has shifted from being solely a domain of scientific exploration to a new arena of competition, with projections showing it as a massive growth market. The global space economy is expected to grow from $630 billion in 2023 to $1.8 trillion by 2035, with an annual growth rate of 9% — far outpacing global GDP growth. Consequently, both states and companies are treating space as a vital investment and a tool of geopolitical power.

Investment in space has transformed from being the exclusive domain of great powers into a competitive arena for both nations and corporations, as it is increasingly seen as an investment in economic and technological sovereignty. This is especially evident with private sector involvement in space exploration and satellite-based services. Broadly, competition centres around the development of low-cost satellite launch technologies, building satellite manufacturing capabilities, and securing space infrastructure against cyberattacks.

Countries are also investing in space science education, with educational programmes contributing to the graduation of a new generation of experts. The sector holds immense potential: it is rich in natural resources and scientific and technological possibilities, which, if harnessed properly, could contribute significantly to economic development, create new jobs, and advance high-tech industries. It is estimated that hundreds of thousands of jobs could be generated worldwide — not only for astronauts and engineers, but also in fields such as space data analysis, satellite software development, and even space tourism.

One of the attractions of investing in the space sector is the potential return: according to the European Space Agency, space sector returns can reach 10%, exceeding those of many other industries. At the same time, space opens up vast new avenues for innovation and creativity. Yet, environmental challenges, cybersecurity risks, international competition, and the absence of an international legal framework guaranteeing the peaceful use of space pose obstacles to progress. The United Nations estimates that 1.1 million satellites will be orbiting in space by 2028, meaning that near-Earth orbit will be crowded. Therefore, regulation will be critical to avoid collisions between spacecraft, and the international community must engage in dialogue and cooperation to ensure that space is used to enhance the quality of life rather than turn into a battlefield.

Globally, the strong presence of the United States, Russia and China, along with some European countries, dominates the space economy. More than 90 countries are now engaged in space activities. In the Middle East, the United Arab Emirates and Saudi Arabia are emerging as key players, expanding their investments in space across security, technology, and commercial domains, while partnering with international space agencies and global corporations to diversify technological support. The rise of space activities is directly linked to reshaping power dynamics in the 21st century, in addition to driving scientific innovation and serving national security and digital sovereignty. Among the main factors driving space investment is the ability to control data — particularly sovereign data — given the challenges of cybersecurity and the information struggle.

At the corporate level, space startups are attracting significant investments. Global investment in space startups — from seed stage to growth stage — rose to $3.1 billion by June 30, compared with $2 billion at the end of March 2025, according to Seraphim Space.

Funding and investment are concentrated in rocket launches, space infrastructure, and satellite manufacturing and operations.

Financing for developing nations must be made available through international financial institutions and private banks at affordable rates if the world is to benefit more widely from the space economy, especially in vital areas like infrastructure and communications, which are now necessities for all countries. This would allow such nations to join the space economy and benefit from it in fields like communications, agriculture, transportation, environment, and development. Stakeholders could also leverage space technologies in their daily activities, such as accessing satellite data to monitor agricultural development, terrestrial and marine environments, rainfall, and weather conditions. Moreover, in regions where internet services are still weak or unavailable, satellite connectivity could support public health and education by providing access to the internet in remote areas.

Overall, the indicators point clearly to the vast expansion of the space economy’s potential, driven by investment in space infrastructure and applications, declining costs, advancements in satellite technologies, and increasing demand for space-based services. These applications have a profound impact on monitoring, surveillance, and information gathering. Enhancing research and development in space technology contributes to agricultural development, food security, and climate change mitigation, as well as national security — including the use of satellite imagery and data for intelligence purposes. Furthermore, space enables logistics, navigation, telecommunications, disaster and crisis management, exploration of underground minerals and resources, and even the search for rare minerals both on Earth and in space.

Mouza Hasan Almarzooqi is Director of the Economic Studies Department at TRENDS Research & Advisory