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.
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