BEA’s “Estimating the United States Space Economy Using Input-Output Frameworks” displays sector insights following the creation of U.S. space economy satellite account [Feb/2022]
The U.S. Bureau of Economic Analysis (BEA) published a study in the space policy journal concerning insights from its new space economy satellite account. It measures the impact on the U.S. economy coming from space-related goods/services production, revealing that the average annual growth of inflation-adjusted GDP for the space economy was 2.7% over the 2012–2019 period, higher than the 2.3% growth in the overall U.S. economy. It was primarily driven by space-related manufacturing, averaging 7.8% growth annually. Furthermore, the space economy was responsible for the creation of 312 thousand jobs in private industry. The novel approach of utilizing a satellite account for space allows the BEA to disentangle the contribution of space from the rest of the U.S. economy and could be an attractive approach for Europe to replicate in future analysis of its space sector.
The applied input-output framework fills a gap in previous space economic research by estimating space contribution beyond the traditional, revenue-based, measures. This new approach has three main advantages. Firstly, it eliminates the issue of potentially double counting government spending. Secondly, without the dependency on company-level financial information, space and non-space revenues can be clearly disaggregated. Both points allow for a more accurate estimation of the overall value by eliminating sources of overestimated values. Thirdly, input-output estimates are able to capture a wider range of economic effects related to space production than only evaluating revenues. For more information on the methodology and the input-output framework, see the full article (link below) or the BEA presentation on satellite accounts can be found here.
As a result, the BEA determines a significant economic impact from the U.S. space economy on value added, output, employment, and compensation across the country. Furthermore, they find an expansion of the industry’s influence beyond the traditional information and manufacturing sectors with an increased contribution to fields like wholesale & retail trade, educations, transportation, agriculture, and healthcare. These advanced and sector specific results allow policymakers, researchers, and private businesses to base decisions for the first time on figures isolating specifically the contribution of the space economy.
Nevertheless, some limitations must be considered when using results from an input-output framework. Space activities are spread across multiple standardised classifications (NAICS codes in the U.S.), preventing the collection of specific company data. Moreover, the data is not adjusted for inflation, nor does it capture the generated benefits of public commodities (i.e. free use of GPS data).
To learn more about the BEA space economy satellite account and detailed explanation of input-output analysis, please click here.