By Stanley Holmes In the aftermath of the Columbia disaster, a somber President Bush promised to keep sending astronauts into space. He told the nation that he views space travel as an extension of America's tradition of adventure and exploration. True enough.
America also reveres another tradition, however: making money. And that's another reason why the U.S. will continue to support human space travel. After all, it was the profit motive that spurred U.S. aerospace companies to outperform their Soviet rivals, allowing America to put a man on the moon eight years after President Kennedy made his bold declaration that it would happen. And it's that same motive that prompted Boeing (BA) and Lockheed Martin (LMT) to turn the shuttle and International Space Station into a nearly ho-hum, routine aerospace program.
Shares of space-shuttle contractors have fallen as Wall Street tries to fathom the Columbia tragedy. Once again, the deaths of astronauts are raising many questions about safety, cost, quality control, and the risks of human space flight. But the potential loss of future commercial opportunities is too great to ignore -- even if much of the financial payoff is decades away. If NASA canceled the shuttle or the space station, it would dramatically impair the bottom lines of the two giant aerospace contractors, as well as other suppliers.
STARTUPS ON SATURN. Certainly, the risky nature of the endeavor will keep nearly everyone on the sidelines for the time being. Yet, history shows that exploration -- from Columbus and Magellan to the team of Lewis and Clark -- always leads to some kind of financial opportunity for exploitation. Space is no different. No one yet knows the full range of business and entrepreneurial possibilities floating in the solar system, or how many companies and investors would benefit from potential new ventures.
"Ever since President Kennedy came up with his challenge to enter space, it was a challenge to our industry and to our nation," says Marco Caceres, senior space analyst for Teal Group consultants. "Many of the experiments in space have business and commercial applications."
Indeed, NASA has laid out elaborate plans for the commercialization of space. One of its brochures says the "commercial development of the space frontier is one of the greatest opportunities facing America." And it wants business to help "bring the benefits of space down to earth." To help explore this potential, NASA created the Space Product Development office and various Commercial Space Centers as the key interfaces with industry. The aim is to help business discover the benefits that can come from microgravity research.
FORDS AND FAUCETS. According to NASA, the program already has yielded public benefits. Ford Motor (F) has used the space program to help improve its cast automotive parts, resulting in more reliable products that cost less to produce. Research conducted by Water Technology has developed a new generation of water-purification equipment that helps everyone from hikers to municipal water-treatment operators.
The list goes on. Chiron (CHIR) has done space research that created new treatments for bladder cancer and metastatic melanoma. And the research for NASA conducted by International Flavors & Fragrances (IFF) resulted in the discovery of an entirely new scent produced by a rose. That could open the way to new perfumes and food flavors.
The semiconductor industry is another beneficiary. Advanced electronic research in clean, weightless environments is producing devices ranging from semiconductor lasers for environmental monitoring to a special optical detector that could offer hope to about 2 million people with retinal problems. It's also producing more powerful chips. "A lot of chip research into building faster and smaller integrated circuits is done in a microgravity environment because it's clean," Caceres says. "[It's] being done in space. That's something that has tremendous impact."
SATELLITE BLACKOUT. Over the years, space exploration has attracted its fair share of schemers and dreamers. Even the Russians caught the entrepreneurial spirit when they began accepting hard cash for trips in their Soyuz rocket to the International Space Station. Many of these commercial dreams have come up empty. Perhaps the biggest recent failure has been the virtual collapse of the low-orbit communication-satellite market -- notably players such as Iridium (IRIDQ) and Globalstar Telecommunications (GSTRF) -- where big upfront investments haven't produced any gold.
Critics of manned space flights say most of the immediate commercial benefits from space exploration can be accomplished without humans. That field has plenty of potential, too: Satellite communication will grow, and direct-broadcast TV, commercial space imagery, GPS navigation, and more advanced weather information are all just around the corner.
"You don't need a shuttle to do any of those things," says Loren Thompson, director of the Lexington Institute, a Washington (D.C.) think tank. "This notion that there will be a commercial payoff from manned space flight is premature."
"WHAT'S OUT THERE." Perhaps. But it's still too early to know what industry will bring back to earth. And humans will play a role in space as long as the potential for profits is out there. Robots and sensors have limits and can't make all of the real-time adjustments needed to modify research, says John Creighton, a former astronaut who flew three shuttle missions on the Atlantis and Discovery and is now chief technical pilot for Boeing. "Human curiosity wants to know what's out there," Creighton says.
Long captivated by the heavens, humans will still imagine space travel in the future. And companies will always figure out a way to make a buck from the final frontier. Holmes covers the aerospace industry from Seattle for BusinessWeek