Morgan Stanley Research / Space: Bezos in Space: 6 Key Thoughts

20 Jul 2021 | Adam Jonas CFA | Kristine T Liwag | Brian Nowak CFA | Matthew Sharpe | Billy Kovanis | Evan Silverberg CFA, CPA | Eram Zaghi
Space: Bezos in Space: 6 Key Thoughts

  1. Execution. I’ve never seen anything so difficult look so easy. Of course, it wasn’t easy at all. Space is hard. Putting humans in space compounds ‘hard’ by orders of magnitude. Behind every accomplishment in space is the power of human teamwork. Gradatim Ferociter.
  2. Awareness. An advertisement for the space economy… we’d get ready for much more. Prepare for more ‘influential’ space tourists to offer their ‘overview effect’ perspectives. And then there’s the build-up to the Artemis lunar missions… strap in.
  3. Enablement. Can the re-usable rocket do to space what the elevator did to architecture? History is full of examples of when a technological breakthrough creates the foundation of economic models and valuation that were difficult to imagine previously. Contemplating space before the re-usable rocket is contemplating the internet before Google search.
  4. Inspiration. Space as an innovation catalyst. It is tough to measure this but we’re guessing that you don’t have fewer children interested in space after events like today. With time, investors may once again see how pushing the boundaries of space can be measured by the improvement of life on earth.
  5. Competition. The first space race fizzled out when the US lost its Soviet rival. The US has powerful and highly capable new space rivals now. Within the US, competition between the likes of SpaceX, Blue Origin and others is also critical for innovation.
  6. Perspective. We turn to Carl Sagan’s passage about Earth as a Pale Blue Dot: “Look again at that dot. That’s here. That’s home. That’s us. On it everyone you love, everyone you know, everyone you ever heard of, every human being who ever was, lived out their lives. The aggregate of our joy and suffering, thousands of confident religions, ideologies, and economic doctrines, every hunter and forager, every hero and coward, every creator and destroyer of civilization, every king and peasant, every young couple in love, every mother and father, hopeful child, inventor and explorer, every teacher of morals, every corrupt politician, every “superstar,” every “supreme leader,” every saint and sinner in the history of our species lived there–on a mote of dust suspended in a sunbeam.”

In May of 1961, President John F Kennedy announced America’s plan to send a man to the moon and bring him back safely to Earth before the end of the decade. This audacious goal set in motion one of the most explosive periods of technological innovation in history. The achievements transcended the politics and cold war machinations of the time and represented what many still see today as a defining milestone of human achievement. In its wake, millions of second graders wanted to become astronauts, our math and science programs flourished and almost every example of advanced technology today can trace its roots in some way back to those lunar missions. The ultimate innovation catalyst – The Apollo Effect.

60 years after JFK’s famous proclamation, we once again need to draw on the “spirit of Apollo” to address today’s formidable global challenges and to deliver the solutions that improve our world for generations to come. The first space race had clear underpinnings of the cold war between the United States and the Soviet Union. Today’s space race is getting increased visibility due to a confluence of profound technological change (such as rocket-reusability), accelerated capital formation (fueled by the SPAC phenomenon) and private space flight missions from the likes of Richard Branson and Jeff Bezos. We think space tourism is the ultimate advertisement for the realities and the possibilities of space live-streamed to the broadest audience.

This next era of space exploration and the innovation and commerce that spawn from it will matter to your work and to your life. But beyond the national competition, the triumph, the glory, the failures and the many hundreds of billions of dollars that will be spent on launches, missions and infrastructure – is a reminder of something far bigger that we learned a half-a-century ago during the Apollo era – that space travel is one of the greatest monuments of human achievement and a unifying force for the planet. We are all witnesses to this amazing adventure.

Could the timing be any better?