Transcript: Space4U podcast, Jack Gregg
Written by: Space Foundation Editorial Team
Hi there. This is Rich Cooper with the Space Foundation. And this is the Space4U podcast —conversations with the diverse men and women who are part of today’s space community, and making amazing things happening today. We’re joined by Dr. Jack Gregg, author of the forthcoming book called The Cosmos Economy.
Dr. Gregg has held leadership positions in public and private education, including serving as Associate Dean of Graduate Programs at Loyola Marymount University, Assistant Dean at the University of California, Irvine and Cal State Long Beach, as well as the University of California, Riverside. He’s also served in corporate learning, working for Northrop Grumman as their founding Dean for their Space Sector Corporate University, as well as the not-for-profit sector.
As he served as the Executive Director for the California Space Authority, Dr. Gregg has taught graduate classes as a visiting and adjunct professor on leadership, operations management, organizational behavior, marketing, talent management, and international marketing. He’s consulted with companies and organizations on such topics as strategic planning and organizational change and written a number of articles and book chapters on management teams.
Dr. Gregg, it’s great to have you join the Space4U podcast. Very excited to hear your thoughts on the space economy, but what you term the cosmos economy. Hey, Rich, thanks so much for inviting me here today. I’m really excited to talk to you about the cosmos economy. Well, we’re excited to hear about that.
And in fact, that is a great way to start that you’re talking about the cosmos economy. What is that? And how do you define it? Well, two levels conversation. I think it’s a good idea to think of the cosmos economy as simply my research findings about the future industrialization of our solar system, uh, to be clear, this is a little bit different from an examination of our current commercial space activities in LEO, you know, communications, data collection and analytics launch.
Mission control space, tourism, even economic development opportunities, and spaceports. The cosmos economy is different. It’s the future economic development beyond LEO. It’s the economic engine for establishing space settlements. The project really started because I was concerned when I heard that some very smart people talk about the future of space and they talked about it as almost like a fully formed, fully functioning economic system.
But you know, that’s not how business and economics works. Visions don’t suddenly appear out of nowhere. They happen in gradual stages, successes and failures and ups and downs. The more questions I asked, the more frustrated I became, I wanted to know what are the industries that will thrive in space? How will space business differ from Earth business?
How will the cosmos economy impact Earth industries and economy? When will all this stuff start to happen? And how will investors and entrepreneurs know they’re on the right track? Maybe we can answer some of these questions this week as we chat today. When I tried to find out what the future of space economy would look like and how it would come about, no one could really give me an answer and that’s how my research started.
So there’s a difference between what we call the space economy and the cost. What is that? Well, the starting point is really the cosmos economy started with, uh, with the space race in some regard. Right? So as you recall, the U.S. was in a space program, was in a competitive space race with Russia. There was a need for private industry to provide goods and services and build rockets and payload.
And industry had the technical expertise, and the government had the money. So independent contractors quickly realized that there was a market for building satellites, providing support services and so forth. And this need ultimately launched today’s commercial space sector. Today, commercial space is a global business serving customers on Earth tomorrow.
The cosmos economy will serve customers throughout our solar system. But the critical inflection point for the cosmos economy really hasn’t occurred yet. That’s most likely going to happen when producers and customers are all located in space in independent economic engine in space today, commercial spaces and extension of our global economy tomorrow, the cosmos economy will look.
Yeah, Earth is just another marketplace. We’re still on the runway to that first inflection point, which may come as soon as the 2040s or so by some projections. The bad news Rich, is that there is a lots of inhibitors and speed bumps along the way. First of all that, you know, there’s no customers in space right now, and there’s a, an undeveloped or non-existent infrastructure at first.
And that has to be built out. Early movers will have to vertically integrate their supply chain and that’s pretty costly. And then there’s kind of a little bit of an elephant in the room kind of thing with the downmass problem as Dylan Taylor of Voyager Space, calls it. This may be actually the critical inflection point, uh, and it turns out technology has really yet to provide a, a good solution to bringing mega tons of manufactured goods from space down to Earth markets.
And by way of comparison, right here in Southern California, where I live the port of Long Beach ships about 154 million tons annually through their port. And there’s dozens of ports like that around the planet, right?
We need a similar capability to support a space-based manufacturing entity. And, and in fact, just to kind of close out on this thought demand will define the growth factor of the cosmos economy. So if we can solve that downmass problem and we can get stuff from space-based manufacturers down to Earth, then Earth consumers are going to define what’s manufactured in space, but if we can’t solve that problem, then the manufacturing and space is going to serve space, space, uh, customers and clients. So that’s, that’s kind of the, the starting point for all this. So are the drivers for the space economy — will those be the same for the cosmos? Well, you know, that’s, that’s kind of interesting. Uh, I think there’s three ways to look at the drivers, uh, for the space economy, uh, there’s economic drivers, there’s social drivers, and political drivers.
I’m going to take them very briefly. One of the time, you know, economic drivers I think are very, very similar to the traditional business objectives of seeking profit building market share. Uh, building a company with long-term sustainability, competitive advantage, those types of things as to the social drivers that gets a little bit more subtle.
Those are reflected in some of the various visions that people have about space settlement. Um, uh, one vision is Elon Musk’s vision. It’s really not his, but he kind of personifies it where a space settlement is a lifeboat, more or less for, for our planet and trouble. And it’s a plan for a toxic, increasingly uninhabitable planet, right?
Jeff Bezo’s vision, Jeff Bezos has vision and others say, gee, maybe it’s the best. We look at space as an opportunity to move the toxic industrial activities into space, remove them from our planet so we can let our planet heal. That’s sometimes called a fallow field approach. Right. And then there’s kind of another vision that has emerged from a lot of conversations I’ve had with people that is not utilitarian.
Like the first two. It’s just simply that. It’s humanity’s destiny to go to space. So those are kind of a, an overview of the social drivers. The last driver, the political drivers have dominated space activities.
There was the old U.S.-Russia space race competition, and now there’s the current U.S.-China space race competition, you know, Dan Golden, uh, the former NASA chief, uh, just a few months ago in October, said that we’re in a space race with China whether we like it or not. And so, um, like most human endeavors, the primary drivers boil down to profit and power.
Over the past several years, the space economy has really taken off to where the Space Foundation Space Report assesses the space economy, the global space economy at $424 billion. And what’s happening today has also been described by some as a new Renaissance with forecasts of a trillion-dollar economy.
By the end of the day. Now you’ve been an educator, you’ve been a practitioner and you certainly been an observer. I’m curious to hear what do you see as the causes and conditions that are unfolding, that are allowing this promising era of a big space economy? Wow. So that’s a really good question. So one of the major issues is this space.
There’s no simply recognized and accepted as a legitimate business opportunity. The venture capital firms, you know, think of space, angels, or space fund, for example, private investors, corporates, corporations seeking to expand their markets and so forth are all very interested in this new opportunity.
And we’re thinking about how they can play. Base several mainstream studies, uh, for example, a study by Merrill Lynch Bank of America, a study by Goldman Sachs and even the study by the U.S. Department of Commerce predict the value of the new space economy to somewhere in the neighborhood of about $3 trillion in just about 20 to 25 years.
But for me, the interesting trend, according to Bryce is that the growth of non-U.S. space enterprises. Those are enterprises that are about space that are offshore from the U.S. is up about 61%. That’s that’s a huge jump and growth of non-space firms in the space sector firms that you wouldn’t normally associate with space or aerospace is up 65%.
It’s not the U.S.-based firms who were building the space business. It’s a global element. And finally, back to China, again, they’re very aggressive state-funded effort seems to scare a lot of people at let’s call that motivate people, uh, to really, to play in this space. Nobody wants to be left behind in the new space economy.
So does it matter where a business operates in the space economy? I mean, is it better for a space business to say, operate in Texas versus California, or is the us a better place to do a commercial space enterprise versus other countries around the world? I mean, where are the best places to operate in the space economy? And will that be any different with the cosmos?
No Richard, I think without sounding cute, the best place to conduct space businesses is in space. Unfortunately for the time being there aren’t any customers there, as we said a little bit earlier, so today’s space companies have to focus on Earth-based customers to generate revenue, to keep their operations.
But over time as commercial operations and space settlements are established in space, the economic activities and core customers are going to shift off planet in a century, give or take, or even much less. The cosmos economy is likely to challenge Earth central role. So it won’t be Earth at the center of this cosmos economy.
It’ll be other players, right? Just as Britain was eclipsed by American economic influence. I don’t know. Last sentence. As to the best places here on Earth to conduct space business. It’s a classic case, really. I think of balancing access to capital access to high impact talent, access to customers and your suppliers while managing your overhead costs and taxes as best as you possibly can.
And so you have to go wherever you can get the best deal from local governments and local communities sometimes in terms of tax breaks and, and other givebacks that make it attractive. The best place to run a space business is wherever you can really maximize your return for your investors. You’ve had the experience of working on the state level with the, as the executive director of the California Space Authority to help it become a place where entrepreneurs and established enterprises can grow their business.
Since that time, we’ve had nearly a dozen or so stepping forward to create their own spaceports. Now, is this a prudent play on their part or is it really a leap too far at this point? Yeah, that’s a really interesting question. I think. Hmm. I think one way to view spaceports is, uh, well in the short term and the long-term, let me take it that way.
In the short term, regional spaceports are, uh, are a localized economic development play. So think of it this way: Local economies, tech firms because tech firms create jobs and attract high-paying STEM labor, and the STEM labor force moves into the community and supports local merchants pays taxes and all that’s good for the local economy.
This is kind of, sort of the Silicon Valley economic development model, but there’s limits to this model, right? So this is fundamentally a real estate property management model with a space theme, looking for tenants to pay rent and taxes and to boost the local economy in the long run. Right. There may be little to differentiate one spaceport from another except geographic location.
Right. Um, also there’s, there’s an upper limit of the number of spaceports so that an economy can support, especially in the short term. If the plan is to have a legitimate port, like an airport or a seaport with lots of cargo and passenger traffic, then there’s no clear sustainable market in the near term.
First of all, space tourism may prove too expensive for a mass market in the long run. Right. The price tag on space tourism is pretty high right now. Uh, and the whole issue of space cargo shipments down to Earth is still a technical challenge. We just talked about that downmass problem right now.
I think there may be an oversupply space baseboards. Uh, they won’t really match demand for sometime to come talk about the spaceports becoming as you describe it. Economic development authorities for particular communities. I I’m curious. What role do you see governments playing in the development of what you’ve described as the cosmos.
Uh, th this is a really great question. This is a key question. Uh, in fact, I, I a section of my book to how the cosmos economy is going to be adopted over five gradual phases, right? And by the way, that’s based on Everett Rogers’ work and how innovation is adopted. And the five phases are real, real quickly.
One is the innovation phase, which I call the frontier phase. And this fall by number two is early adopters. Then make early mainstream, late mainstream, and then the legging adopter, which is really the maturity end of the curve. I describe how each of these phases matches with an appropriate business model.
But to answer your question more directly about government’s role in developing space, uh, in the early innovator phase, right? The frontier phase of development government can offer a range of assistance. The most obvious is to engage in public private partnerships. This is where government subsidizes infrastructure projects industry provides the expertise.
This is in fact how five of the six transcontinental railroads were built back in the 19th century. This is how our space program was launched. So there’s a lot of utility to something like that. Further down the road government can continue to support with incentives like a preference. Payload contracts, tax and tariff breaks.
Dual use of launching terminal facilities, those types of things, continuous to expansion over time, deeper and deeper into the solar system with more and more, uh, new frontiers means that there may be a perpetual role for government subsidizing and participating in the early stages of all this development.
The long-term goal, however, I think is to remove government, uh, from the equation so that business can ultimately operate on it. Is there a particular company or industry that you think is doing a better job in shaping today’s space economy, marketplace? Hmm. Uh, I, I really liked that question. Uh, it gets to the heart of the cosmos economy.
Keep in mind that the cosmos economy beyond LEO will continue to create new frontiers in the solar system. As we just mentioned, right? As companies in countries keep going further and further into the Solar System in search of new economic opportunities. In due time though economic activity in the solar system is sure to eclipse our current global economy on Earth.
Right? So just focusing on earlier phases of adoption, we discussed, for example, the frontier phase and early adopter phase, some of the earlier economic opportunities would be, uh, infrastructure build-out, transportation, logistics, energy generation, and mining and refining manufacturing. And surprisingly, uh, not often talked about real estate, uh, because there’s people who are going to want to go out there, but they won’t be able to have their own facility.
So they have to get them from somebody in terms of industrial real estate, residential office retail distribution is. The firms that do the best job sustaining themselves in space economy will have to be nimble and be able to adapt that, you know, um, Rich, I think a really good example is, was just in the news recently where tech a, uh, pharmaceutical based in the UK had partnered with, uh, Pfizer and they pivoted their entire company to working on the COVID vaccine and were successful. So the ability to pivot and adapt to situations is a critical. Some of today’s companies that I think are kind of represent tomorrow’s cosmos economy. Oh, a caterpillar Rio Tinto mining, the world’s largest mining operation Bechtel, one of the world’s largest construction firms, Bigelow, then there’s these pharmaceuticals we just talked about.
And then there’s a whole host of other companies that we could get into it at some particular point in time. You use the phrase that I think we’ve heard so much in the year 2020—a pivot. I’m curious in thinking of those two phrases, there are lots of important parts of a business plan, but in the cosmos economy, what are going to be the most critical components that need the most attention for that enterprise to succeed.
Well, business planning in, uh, uh, for a startup is a little bit different than business planning for a going concern, but still, I think there’s some common elements that apply to your question. Rich, certainly it’s important to know who your customer is. You have to have a really good pulse of what the demand and the potential demand is all about, but I think the most important part of a business today is to have a good plan B uh, you know, uh, oh, this is playing just to be incredibly rigid and inflexible.
Uh, and when we used to teach them in business school, you know, you, somebody would turn out a phone book, business plan, but today, right now there’s a lot of opportunity for, for, uh, kind of ducking and weaving and, and, and going in ultimately in different directions, depending upon where the market takes you.
And I think that that’s a critical element. Investors want to know if you can make it work when things go bad. So that ability to be flexible becomes really critical. The next most important element I think, um, is to maintain and build solid relationships with your investors and your suppliers. So when you have to pivot to plan X, there’ll be there when things kind of get.
Next important I think is to build a balanced team. You don’t want all tech people on your team. You don’t want all finance people on your team. You don’t want all marketing people on your team. You want a really good functionally balanced team and that’ll help you through. The growth phases of the organization.
And finally, and we’ve been talking about this flexibility, the, uh, the kiss of death for a lot of young companies is inflexibility and inability to kind of go with the changes in the marketplace. So I think that that kind of is really what a business plan is about today. So when you talk about that, marketplace economies always need capital to operate, but more than that, they need workers.
What has your study and experience told you about the skills and jobs that are going to be the most in demand for the cosmos economy? I got to tell you Rich, that’s a great topic. This is really where my inquiry ultimately started with trying to find out what the critical capabilities are going to be that are needed for space enterprises.
And so when I started to go out and start to talk to people and I asked the industry leaders. What would people actually be doing all day in space so that I could try to get a sense of what the capabilities were that they needed to have? No one seemed to have a good answer. After a while they started to concern me because I was concerned that a: I was asking the wrong questions.
And B: no one had really thought about it before or seen there was something going on that I just didn’t understand. Well, as it turns out, there’s a little bit of all-of-the-above the answer to not to be that be a large human workforce in space, at least for the initial phases of development, because frankly robots are going to be doing most of the labor.
They can work 168 hours a work week. There aren’t any more hours in a week than 168 people have trouble doing that. But a small cadre of people will be in space, right? There’ll be, uh, there to provide proximate human oversight, managing remote Tel operations, for example, that type of thing. But the heavy lifting is going to be done by robotics and automation.
So human jobs in the cosmos economy, well, most likely requires skills and competencies in a different set of areas. Analytics program management. When I say program management, some people just jump to coding skills. No, it’s, it’s really the skills to manage the coders, logistics, uh, people with, uh, competencies in EQ or emotional intelligence.
Are you able to maintain a good long-term working relationship for a very long period of time in space organization leadership, the art of command and control is still critical problem solving and so forth, you know? A lot of those skills and competencies are really soft skills. So to speak, it turns out these are kind of the hard skills for technical folks, but they’re really critical.
I think for the cosmos economy, you’re gonna have a little fun with you here and posed a little bit of a curveball question, uh, draw on, uh, I’ll draw on some, um, Hollywood lore, uh, in particular, the classic film, The Graduate, uh, I assume you. Oh, yeah, sure. Yeah. That’s great. Well, let me, there’s a scene in the movie.
When the character that’s played by a very young Dustin Hoffman is questioned about his future. And before he can answer, he’s ushered outside to the pool by a family friend who has only one word for him when it comes to his future. And he leans over to Dustin Hoffman and he says “plastics.” And perceives to encourage the young Dustin Hoffman to focus on that area for his future.
I want to put you in a very similar situation because there are a lot of young people out there who have an interest in being a part of the space economy. If you could put your arm around any one of them, either poolside, launchpad side, or wherever and give them one-word or possibly two-word description.
As to where they should direct their future, what would it be? Wow. Uh, well, first of all, The Graduate was a major film in my ill-spent youth. And I remember that scene and I also remember a bunch of other scenes, which are maybe for another day, but it turns out it turns out there were a lot of quote unquote plastics opportunity in the cosmos economy.
It’s, um, it’s full of something like that. So the key. Uh, is to go with your strengths. So let me spend a half a second on this. I require all my management students to take the strengths finder assessment. It’s based on really solid Gallup research and it’s a perpetual, uh, item on the Wall Street Journal’s weekly best seller list of business books.
And it’s used by corporations all over the place. It’s a good way to start a conversation with yourself about where you want to take your career and who you are and how you define your personal success. Companies often ask about strengths in their hiring process, and these are the strengths they’re referring to.
So if I say to you, what’s your strength? And you say, well, I’m a really good poker player. That’s not what they’re asking. This is about capitalizing on strengths, not, not fixing your weaknesses, which is a different approach. And so the cosmos economy is a great ground floor, uh, and greenfield opportunity for women and unrepresented minorities seeking a new career.
There’s just a lot of opportunity there. If you want to succeed in the new space business economy, then learn as much as you can about how business works and how you works. So as to the plastics answer, let me circle back and say, find as specific space industry category to specialize in that matches your core strengths.
So when you take this assessment, you’re going to get a list of about three to five top strengths. Find something that matches up with that because that’s how you’re going to define your success. It won’t be a consumer-based economy for some time. So focus more on things like infrastructure and B2B or business to business opportunities like, oh, I dunno, transportation, habitats, life support systems.
And then more broad areas like management banking and finance, marketing, and sales, operations, logistics, supply chain, all those types of things. You remember, there’s no master plan for space. There’s no, there’s no hidden agenda for where space is going to go.
It’s making itself up as it goes along. So if you’re the type of person who’s okay with risk and is creative and is super ambitious, then space is a perfect career for you. Commerce on Earth has treaties as laws and has regulations that guide and shape its operations. Is there a framework for the cosmos economy that you see doing the same, or is there a new construct that you see taking shape that will shape its operations and who gets to call those shots countries or commercial actors?
Uh, this is a tough question. I’m a little, I have a little bit of cynicism in how I’m going to answer this question for you, Rich. I’ve repeatedly asked about policy enforcement and sanctions without a lot of success at conferences and space industry presentations. Uh there’s uh, some very well-intentioned space policies, laws, accords.
But there’s no clear enforcement recourse or sanctioned authority in space. And when I ask about that, people kind of give me a blank, look or change the subject. So for example, will the cavalry come to your rescue if claim jumpers invade your tiny prospecting operation on a distant asteroid? Uh, not very long.
Well workers on a distance deep space company outpost have recourse. If their human rights are abused by their employer, or maybe not will laws be fairly adjudicated throughout the civilized coalition. If so by what means so far, there’s no clear or reliable answer to these questions. I think frankly Rich, as companies and countries venture further and further out into the solar system, they’ll bring their own laws, policies, regulations, and sanctions with them, uh, out of convenience mode.
And what’s going to be acceptable behavior, for example, at a Bechtel deep space construction site, maybe you’re a serious crime at an Israeli settlement community. Uh, so there’s a lot of behaviors that just don’t fit in one category that would fit in another I’m concerned that a formal policy agreement made today on it may not, uh, have as much weight or relevance in space, uh, in the frontier, in the future.
Uh, I guess my view is that space treaties that were written from today’s altruistic Earth’s point of view and not from tomorrow’s pragmatic space, point of view. If we can’t regulate human, uh, selfish behavior on Earth, then space, most likely isn’t going to be much different.
And that’s kind of my cynicism about that topic. Final question. Is there a particular character or a series from science fiction that you find particularly inspiring as you look to the future of the cosmos economy? Hm. Hm. Th you know, the several books that come to mind, uh, one book is a player piano by Kurt Vonnegut, which is the first book he wrote, and it’s kind of a, uh, a dystopian satire, uh, and that, that stays with me.
But I think, I think the book that, that really kind of hits home for me, uh, in the context of what we’re talking about today is a book that was written in the early fifties by, um, uh, Frederik Pohl called the space merchants. Right. And, uh, and the, the story arc of that is that there’s an advertising copywriter who has been assigned an ad campaign that would attract colonists to Venus.
But along the way, he’s inevitably made enemies and, uh, through a whole bunch of plot twists and turns and so forth. He’s drugged and kidnapped and winds up in Antarctica and has to fight his way back to the civilized world. Uh, and his former status. It’s really a sad, sad, artistic swipe at commercialism and the power of media manipulation.
And it’s a, it’s a fun read. And even though it’s a little dated, it still holds up today. Uh, and it’s an enjoyable read. I would recommend it. It sounds like, uh, it sounds like a, quite a twist on Madmen. Um, think you described it. Um, yeah, I, I can’t imagine Don Draper on Venus, but you know, uh, there are a lot of situations in that series you couldn’t have imagined until they unfolded.
Jack as we go to wrap up here, can you tell us a little bit more about your book, The Cosmos Economy, when it’s coming out, and where we can find it? Yeah, well, Rich, my editor tells me the book’s going to be released in January. And so I’m, I’m crossing my fingers and hoping that everything works out is his promise.
It’ll first come out as an e-version. And then as a, as a hard copy version, uh, in January, uh, if there’s a little bit of a delay, I’ll let you know, but certainly you can get it, uh, through my website, which is cosmoseconomy.com, but also through Springer, who’s the publisher. So, um, you know, uh, I’ll give you more information as I find it, but I it’s going to be out there and I really encourage people to read it and comment back to me about what they think about it.
Well, we at Space Foundation, we’ll be happy to share that because we’ve enjoyed our association with you. You’ve been a, uh, a source of inspiration and counsel on a lot of different issues. And as the space economy continues to mature and we move towards that cosmos economy you described, uh, we’re going to be talking to you a whole lot more.
Jack, thank you very much for your time. We are very grateful for you sharing your time and your talent and your expertise with us here on the Space4U podcast. Richard, you’re very generous with your comments. Thank you. I’ve enjoyed this a lot. Thank you, Jack. And with that, that’s a wrap on this episode of the Space4U podcast.
Again, our thanks to Dr. Jack Gregg, the author of the forthcoming book called The Cosmos Economy. Please follow us on social media, via Facebook, Instagram, Twitter, and LinkedIn. And of course, all of our Space Foundation websites, which are all headquartered out of spacefoundation.org. We’ve got a lot of exciting things planned for 2021.
We expect this coming year to be as promising and full of potential as 2020 was for the space community. There’s a lot of good things that are going to be happening. And we look forward to sharing that because at the Space Foundation, we will always have space for you. Thank you for listening.
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