The writer is director of international government business at Axiom Space.

In the early years of my career, I was a research analyst working on FDI. My days were consumed by FDI trends and data. Yet my passion extended beyond the confines of economic development. I was also an amateur space enthusiast. 

My spare time was spent watching and reading about space exploration and the mysteries of the universe. One weekend, after a long stretch of FDI research followed by documentaries, I fell asleep and dreamed of celestial destinations playing a role within FDI. What seemed like a far-fetched fantasy has, 20 years later, evolved into a plausible reality. In-orbit manufacturing — otherwise known as in-space manufacturing — could become a $1-2bn market annually by 2035, according to the World Economic Forum. 

What is in-space manufacturing?

Producing goods in orbit offers the potential to manufacture materials and products in ways that are simply not possible on Earth. Conditions such as microgravity, near-vacuum environments and extreme temperatures create opportunities for higher-quality output, particularly using additive manufacturing (3D) and subtractive technologies. 

Since it was launched in 1998, the International Space Station (ISS) — operated by the US’s NASA, the Canadian Space Agency, European Space Agency, Japan Aerospace Exploration Agency and Russia’s Roscosmos — has been used for in-space manufacturing primarily for experiments and resource utilisation. This has focused mainly on maintaining life in space, rather than commercial opportunities. 

However, with falling rocket launch costs and rapid advancements in space technologies, in-space manufacturing is transforming from niche experiments into a viable, scalable commercial production method. Sectors such as semiconductors, pharmaceuticals, biotechnology and advanced materials are positioned to benefit significantly from this. That’s because their production processes require seamless formations, uniform and defect-free crystals, and in the case of pharma and biotech, new drug formulations attained only in microgravity.

As the ISS approaches its decommissioning planned for 2030, private companies — including Axiom Space — are building commercial space stations to replace the ISS. These state-of-the-of-art stations will serve both governments and corporations, with in-space manufacturing as a key component of their offerings.                         

The World Economic Forum’s forecast of a multibillion-dollar market is driven by declining launch costs, shortening timelines and private investment pouring into space start-ups. According to data provider, Factories in Space, dozens of companies are already working to develop in-space manufacturing technologies. From the US they include Redwire, Flawless Photonics, Varda and United Semiconductors, plus Poland’s Astronika and UK’s BioOrbit.

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A shared resource

For all its promise, in-space manufacturing may further fragment global value chains which have already been interrupted by the pandemic and geopolitical shifts. This could lead to even more complex structures with some production stages taking place in space, only to return to Earth for completion. This new layer of complexity could fundamentally change the international production landscape as we know it.

Countries that prioritise FDI in high-tech industries most suited to in-space manufacturing, plus aerospace, are best-positioned to benefit. Similarly, countries with established space programmes or existing in-space manufacturing capabilities — such as the US, UK and Japan — will likely gain a competitive edge. Emerging spacefaring nations like India, the UAE and Saudi Arabia could gain a headstart, too. However space technologies are evolving fast, and to stay ahead of the curve these governments and companies alike must invest in workforce development and capacity-building programmes, to further integrate space-related technologies into domestic industries.

Governments must also recognise that achieving self-sufficiency in the space industry is unattainable for individual nations. This is due to the industry’s high technological demands (only the US, Russia and China currently have the capability to launch humans into space), and funding and resource constraints. It means that international co-operation among countries, along with commercial enterprises — particularly those building space infrastructure — is essential for success.

As for FDI practitioners, they should redefine their strategies to promote locations’ technological capabilities and target future industries that could adopt in-space manufacturing. 

The emergence of in-space manufacturing will reshape FDI patterns and value chains by creating new opportunities, attracting investments in advanced technologies, and transforming where and how products are manufactured. 

As we stand on the brink of this new frontier, the potential for in-space manufacturing to revolutionise industries and economies is immense. Both countries and companies must act sooner rather than later to secure a competitive edge in the emerging space-based value chains. From FDI on Earth to manufacturing in space, those space economy dreams appear now within reach.

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