Human Spaceflight Directions, Part 2: Commerce

Commerce changes the fate and genius of nations.
–Thomas Gray


In Part 1, I covered Nationalism as a value proposition for human spaceflight, and pointed out the challenges that must be addressed to make it an enduring one in a changing world.  Today I continue the examination on value propositions for human spaceflight in Part 2: Commerce.


Reason 2: Commerce.  The development of transportation infrastructure in the United States and commerce are inextricably linked.  The need to transport goods quickly, tying into existing waterways and reducing or eliminating over-land routes that were slow or non-existent, drove development of the canal system in the northeast by private interests in the early nineteenth century.  The same drive is what led to the subsequent ascendency of the railroads, again achieved mainly through private investment with minimal federal guidance.  As for aviation, one doesn’t have to go very far to point out the successes of the Wright Brothers, funded from their own sweat equity, versus the comparatively expensive and unsuccessful Government-backed Langley efforts at “heavier than air” travel.  Subsequent aviation was fueled by the airmail contract of the 1920s and 1930s, then by passenger service started in the 1930s, then “took off” following World War II and exploded in the 1970s following deregulation.  The National Highway System leveraged off the development of the automobile to transport goods and peoples to a wide ranges of destinations, plus provide Americans with a degree of mobility not available with any other form of transportation.  (That is, until we get the flying cars of the Jetsons.)

Historically, NASA has not played a strong role in commerce.  Instead, NASA has had a long history of technological developments that have been licensed to commercial companies.  These “spinoffs” have made their way into numerous products that many of us take for granted today, and yet the impact of NASA on the economy is one that the Agency continues to struggle to communicate.  So in that regard, NASA and commerce have been at best a second-order effect.

Until now.

In human spaceflight, we are seeing today the emergence of a for-profit commercial space sector that seeks to provide transportation services for people and cargo to low Earth orbit, and possibly beyond someday.  Here, NASA serves somewhat in a venture capitalist-like role by providing seed money for additional investment from the private sector, as well as in a certification mode for those systems.

Can Commerce become a value proposition for human spaceflight?  It does have a number of appealing characteristics.  First is the “multiplier” effect of using tax dollars in combination with private capital to fund development.  Second is constraining the cost for services through alternative acquisition methods by putting more risk on the firms competing the work via fixed-price contracting, versus the Government carrying most of the risk through cost reimbursable contracts.  Third is taking advantages of the efficiency of the private sector through innovation, competition, and economies of scale with a greater customer base than the Government.  Finally is the direct application of the value equation, where value equals benefit minus cost; in a Commerce value proposition, the common unit of measure is currency, which makes the benefit-cost trade easier to understand.

One of the critical challenges with Commerce as a value proposition is in “closing the business case.”  In previous transportation infrastructure development efforts, there existed a critical mass of destinations and demand that drove investment and development using the technologies in hand at the time.  For space transportation services, there is one destination and one customer today: the International Space Station, and NASA.  A “build it and they will come” proposition with regards to future customers is fraught with risk and uncertainty that must be accounted for as part of the business case.  Can several competing private firms close their business cases, so that failure of any one does not jeopardize accessibility?  Can Government (i.e., NASA) act as venture capitalist, certifying agent, and sole customer for a period long enough to obtain critical mass of destinations and demand?

Perhaps closing the business case, at least in the near term, will rely upon an altered paradigm: instead of destinations, provide “experiences” that to date have been limited to the 500 or so professional astronauts that have traveled into low Earth orbit and to the moon.  Something profound to the human condition happens when one is able to step away, so to speak, and look at life on Earth from a totally different perspective.  Is there sufficient demand for the “experiences” of traveling into space to help close the business case?  (Sir Richard Branson thinks so.)

Another ancillary challenge is one of change, impacting the traditional roles served by NASA in human spaceflight.  A Commerce-drive value proposition will require transitioning NASA into different roles from today. For this type of change to be successful, modifications are needed to NASA’s organizational structure (maybe even closing field centers in a BRAC-like approach, gasp!).  Additionally, changes would be needed to the existing systems of policies and procedures in place for human spaceflight, and to the individual skills and abilities of the NASA workforce needed to make NASA’s new roles a reality.

For the change to be successful, the level of engagement by the NASA leadership team must be higher than that for maintaining the status quo.  The leadership team would need to grapple with the tough issues on how to acquire and retain those capabilities with the greatest value, and to let go of those that are of little to no value. Additionally, that would mean dealing with deeply ingrained cultural norms that no longer add value, for convincing the NASA workforce that change is needed, for restructuring the top team, for identifying and valuing the pockets of strength within the Agency, and for defining what constitutes success at all levels, from the individual level on up.

In other words, we would need to see a level of engagement by the NASA leadership team commensurate to the start-up atmosphere of Apollo.  That is a tall order for an Agency with 50 years of history behind it.  Therefore, with regard to a Commerce value proposition, do we have the intestinal fortitude to let go of the past, to alter and deconflict roles, and to take on the risk of the untested?

Next time: Part 3.

Text © 2011, Joe Williams.  All rights reserved.
Photo courtesy of iStockphoto/MCCAIG

Human Spaceflight Directions, Part 2: Commerce