Section 3 is the Market Assessment/Market Analysis section, it contains the following sections:
3.1 Communications Market 3.2 Space Manufacturing 3.3 Remote Sensing 3.4 Government Missions 3.5 Transportation Missions
3.6 Entertainment 3.7 New Missions 3.8 Space Utilities 3.9 Extraterrestrial Resources 3.10 Advertising

Table of Contents for Section 3.2

3.2 Space Manufacturing
3.2.1 Introduction/Vision
3.2.2 Space Manufacturing/Processing Market
3.2.3 Prospective Users
3.2.4 CSTS Needs and Attributes
3.2.5 Confirmation of Market Opportunity
3.2.6 Conclusions and Recommendations
The Full Section Index is at the end of this Section

Commercial Space Transportation Study

3.2 Space Manufacturing

3.2.1 Introduction/Vision

In the years 2000 through 2010, commercially owned and operated space manufacturing and processing facilities are orbiting in sun-synchronous low Earth orbits (LEO). These facilities provide high-powered, ultrahigh-vacuum, microgravity environments to enable the automated production of unique materials used in ground-based biotechnological, pharmaceutical, electronic, and catalytic processing industries.

The orbital assets are routinely serviced by regularly scheduled launch vehicles with maneuverable upper stages that provide autonomous rendezvous and docking for orbital delivery of unprocessed samples and constituent supplies. Return capsules, containing processed products, detach from the orbital asset and, following controlled reentry into the Earth's atmosphere, deliver these products to reception centers on the ground.

Dedicated ground-based facilities provide both prelaunch and postlaunch processing functions. Ground-based biotechnological and pharmaceutical industries have developed drugs and genetically engineered vaccines based on the processed materials provided by the space manufacturing and processing orbital assets. These drugs and vaccines have eliminated many of the major diseases prevalent in the 20th century.

Enhanced nutritional foods, also derived from base materials produced in space, have been combined for the elimination of disease. Human life spans are now extended to 100-plus years.

Genetically engineered substances based on materials produced in space have eliminated many of the chronic human conditions derived from genetic disorders such as multiple sclerosis, cystic fibrosis, and Alzheimer's. The effects of aging on the human body have been controlled by discovery of the means to stimulate cell replacement and regeneration of vital human-life-sustaining-and-controlling enzymes.

Electronic materials derived from space produced base materials have contributed to the existence of super-high-speed processing, ultralow-energy-consuming, super-enhanced data storage capability chips and devices. These items have enabled the information processing and automation industries to develop to an unprecedented scale to enhance the quality of life. Environmental improvements have been enabled by bioremediative products developed from base materials produced in space such that major concerns of uncontrolled environmental degradation have now been eliminated.

The orbiting space manufacturing and processing asset also provides an automated research facility for the further development of new materials and processes and the advancement of knowledge of physical and biological processes subject to limitations imposed by Earth-based gravitational effects.

Many hundreds of thousands of personnel are employed by industries whose base materials and processes are supported by the space manufacturing/processing system facilities.

3.2.2 Space Manufacturing/Processing Market Introduction/Statement of Problem

The space manufacturing/processing market area, as defined by the CSTS planning discussions of June 1993, encompasses microgravity processing, drug production, space epitaxy, catalyst/separation, biotechnology production and university/industrial research. The market areas do not correlate one for one with the U.S. Government Standard Industrial Classification (SIC) system as defined for 1,006 industries in 1987 and as annually reported in the U.S. Industrial Outlook 1993 compiled by the U.S. Department of Commerce (DoC) from data derived from the Bureau of the Census and others.

To establish an estimate for the existing business base of the subject market areas, certain correlations were assumed wherein definitive DoC information in SIC categories of related business areas were correlated and collected as representative of the study areas.

The U.S. business base for materials processing was compiled from the SIC categories of semiconductors, instruments, and catalyst/separation and integrated to the area of electronic materials as derived from a report entitled International Electronic Materials (1991) conducted by Peat Marwick Inc. for the Center for Space Processing of Engineering Materials at Vanderbilt University.

The base estimate for university/industrial research, which also includes federal expenditure, was derived from a study conducted in 1992 by the Battelle Memorial Institute. Manpower estimates associated with each category were derived either directly from DoC-published data or estimated based on average rates for appropriate labor categories.

The total resultant U.S. business base for the industries associated with semiconductors, electronic materials, instruments, biotechnology, drug manufacturing, catalyst/separation, and U.S. research and development was estimated as $236 billion (1992) with 1.244 million jobs (fig. The projected potential commercial business opportunity associated with space manufacturing and processing was evaluated by correlating the above industrial areas into four SIC-related industrial categories and by assuming for each an individual cumulative annual growth rate based on DoC projections.

The four categories and individual growth rates are drug production (5%), biotechnology (15%), industrial/university R&D (3%) and materials processing (5%). The final value of the business share associated with space manufacturing and processing was estimated at a conservative 5% of the total business base for each category. The overall total business base for these categories was estimated at $18.3 billion with 86,000 jobs in the year 2000 and $28.5 billion with 155,000 jobs in the year 2010.

This conservative estimate is, of course, based on the assumption that this new market will evolve provided that certain enabling factors are in place. The scenario for the development of these factors is contained in the body of this report.

Figure Space Manufacturing/Processing Business Base

The industry categories identified under the Space Manufacturing/Processing general heading have mostly not been associated with the actual space scenario. Exceptions are microgravity processing and university/industrial R&D, the former being unique to the space environment and the latter comprising a small portion of the activity base.

The term "space manufacturing" is somewhat misleading, since it suggests an industry whereby an orbital asset (with an inherent microgravity environment) is used to support the making of "production" quantities of items by controlled processing of raw materials. These items or products assumed to be characterized by structure and properties that cannot be duplicated in the unitary gravitational environment on Earth.

The misconception basically concerns the quantity of processed products considered to be of manufacturing production magnitude. For example, some pharmaceutical materials derived from space processing and intended for the treatment of critical human conditions have values up to $15 million per pound (i.e. tissue plasminogen activator-TPA).

It would be useful at this point to summarize a sample of the potential advantages and products that may be produced in a microgravity environment.

a. Immune response understanding leading to viral infection antibodies or vaccines;

b. Synthetic production of collagen for use in constructing replacement human organs (e.g., corneas);

c. Manipulated differentiation of plant cells to produce desired chemicals (e.g., Taxol);

d. Production of targetable pharmaceuticals (cancer cures);

e. Protein crystal formation for structure identification (structured biology);

f. Protein assembly;

g. Growth of large pure electronic, photonic and detector crystal materials (computer chips, quantum devices, infrared materials);

h. Ultrapure epitaxial thin film production in very high vacuum (e.g., Wake Shield Facility);

i. Production of perfect solid geometric structures;

j. Manufacture of pure zeolite crystal material for filtration applications (pollution control);

k. Manufacture of polymers with unique characteristics;

l. Electrophoresis for separation of microscopic components within fluids.

In the context of this report space "manufacturing" refers to the processes either of producing relatively small quantities of high-value materials in an orbital microgravity environment or of producing small quantities of pilot material with the intent of identification and analysis of the material's three-dimensional molecular structure. Both categories of product would be returned to Earth but the latter materials would be uniquely characterized by analysis. The resulting knowledge base would be used for the development of new drugs, themselves designed (via structured biology techniques) to interface with those molecular structures to produce beneficial therapeutic effects.

The unique characteristics associated with an orbital microgravity environment have been promoted by NASA for some years and have involved international cooperative efforts with Europe (ESA) and Japan. Initial efforts in the late 1980s involved suborbital sounding rockets (Consort and Joust), which provided typically minutes of microgravity exposure.

A KC135 aircraft has also augmented this capability with manned minutes of microgravity exposure. More recently shuttle-based carriers such as Spacelab (a European Space Agency carrier) and the series of U.S. Microgravity Laboratories have provided access to space for experimental programs. These shuttle flights are, of course, manned and typically provide up to 12 days in orbit.

A further shuttle-based access capability is the so-called get-away special (GAS) payloads. These facilities effectively are small and self sustaining and occupy cargo bay capacity remaining after major payloads are installed.

Spacehab has been developed commercially as an annex to the shuttle and to date (January 1994) has flown once with a complement of 22 individual experiments. The above shuttle-based carriers that provide microgravity access are integrated within the parent vehicle and provide an orbital duration of 12 days.

The Europeans have flown an orbital asset known as EURECA, which provides a microgravity exposure of about 9 months. This satellite is equipped to support long-term experiments and is both launched and recovered by a U.S. shuttle.

A further NASA/HQ-sponsored proposed program, pioneered by the Universities Space Research Association (USRA), is the student explorer demonstration initiative (STEDI). This initiative is promoting new exploratory space science projects for science graduate students within academia.

The projects are individual experiments typically about 100 lbm mass, which will be combined to yield a launch payload of about 450 lbm. The experiments are designed to support space-related research in areas such as astrophysics, space, earth, life, biomedical, and microgravity sciences.

The payloads are planned to be placed in orbit using a multiservices launch vehicle (MSLV) such as a converted Minuteman II missile. Current STEDI plans are to conduct three payload launches in 1996, all to LEO polar orbit, for which NASA/HQ has allocated funding of $24 million. Future plans project an escalation to 25 launches per year from 2004 through 2020.

The USRA believes that if the STEDI program is successful it will be able to establish a steady stream of dedicated space flights for research and development at universities, government laboratories, and commercial research centers. Study Approach

The study approach adopted for the general area of space manufacturing/processing is outlined as follows:
a. Conduct internal research to obtain an appreciation of the potential advantages available to the market areas in this category as afforded by space applications and potentially serviced by a commercial space transportation system (CSTS);

b. Conduct research to identify potential primary and secondary contacts;

c. Conduct a comprehensive telephone survey soliciting potential interest in a future CSTS that would enable commercial activities in space profitably relevant to each market area

d. Follow up immediately by FAX with a written introductory letter explaining the purpose of the CST study and defining the cooperating informal alliance members;

e. Conduct further telephone solicitation of selected primary contacts with request for interviews to discuss responses to a list of CSTS-related questions. These questions designed to evaluate the potential of space-based applications for the individual market areas making use of a CSTS. The questions are as follows:

1. What is the maturity of users' space application?

2. What are payload form factors?

3. What infrastructure and support to user must launch system company provide?

4. What is end user market infrastructure?

5. What changes or improvements are needed in the market infrastructure to reduce costs of space-produced products?

6. If users are performing experiments now, when will they begin producing commercial products in space.

7. What are current and near-term costs associated with using space?

8. How sensitive is user demand to launch system cost. How many more times will they use space if launch costs are reduced?

9. What decision-making process is used to decide on the use of space?

10. What are titles and names of executive managers who are making business decisions to invest their companies' resources into producing products in space?

f. Follow up telephone solicitation for interviews by FAX with a summary of the CSTS survey, the list of pertinent questions, and a matrix of the market areas under evaluation;

g. Conduct face-to-face interviews with responsive primary contacts using the above questionnaire as the basis to guide detailed discussions;

h. Record the indepth responses obtained with field research reports and summarize the overall response;

i. Summarize and analyze the results of the market survey in appropriate reports and estimate the business potential for the space manufacturing/processing general area.

An alternative technique was tried with regard to soliciting responses from Bay Area, California, biotechnology companies. From a list of 360 such companies resident in this area, 107 were selected based on employee headcount of 60 or over. A CSTS letter was sent to the CEO of each company providing information on the study and requesting a response describing interest in face-to-face discussions.

The majority of these companies (98%) provided zero response. The remainder each sent a polite letter declining interest. We concluded that whatever advantages space may hold for the evolution of the biotechnology industry, none of the letter recipients were aware of it.

All primary and secondary contact listings, contact reports, communications, and field research reports have been stored in an accessible database with comprehensive search and locate facilities. This information is a valuable resource pertinent to the overall objectives of the CSTS and represents a current realistic record of the reactions of industry and selected NASA-sponsored agencies to the concept of a commercial space transportation system used in support of commercial space manufacturing and processing activities in space. Market Assessment

The market for potential commercial utility of space manufacturing/processing currently consists only of experimental payloads wherein electronic, photonic and detector crystalline materials, protein crystal structures, and epitaxial devices are produced in small quantities. Most of these experiments are hosted by the shuttle with various annex facilities resident in the cargo bay.

The European Spacelab and the U.S. commercially developed Spacehab are both designed as an annex to the shuttle and provide facilities for similar experiments.

The 17 NASA-sponsored and partially commercially supported Centers for the Commercial development of Space (CCDS) are the primary means of access to space.

The following dialogue is an assessment of characteristics of the current access to system which have been advised to the CSTS researchers in direct interviews as being factors which discourage the near-term commercial involvement in microgravity-related space-based research and development.

These factors are summarized under market con drivers and the subsequent section reports on a potential launch services system that would stimulate the long-term development of commercial space activity.

Drivers Con:

a. Government (NASA) ownership and operation of the only access-to-space transportation system currently suitable for support of space manufacturing/processing is totally incompatible with commercial ways of doing business;

b. The NASA bureaucracy associated with flight certification of hardware/software and sample materials is a major impediment to commercial utilization of current access to space;

c. The extended time scale between decision of intent and the actual flight event of a shuttle experiment is unacceptable to potential commercial users;

d. High costs of commitment of staff/materials from experiment conception to actual flight even though the actual flight cost is zero by working through the CCDSs;

e. Shuttle touch-down location is subject to somewhat unpredictable local weather conditions, particularly at KSC. This leads to uncertainty and therefore redundant recovery team planning for the timely receipt of processed samples. This represents a risk for processed samples of limited lifetime and could introduce unpredictable sample degradation. This situation is unfavorable for a commercial operation;

f. The shuttle also has a history of experiencing delayed launch schedules. These delays represent a risk to sustained funding and the integrity of form for unprocessed sample materials, which could effectively negate the experimental objectives. This also is a significant risk to a commercial operation;

g. Shuttle manifests are subject to change at the discretion of NASA management. While we recognize that these manifest changes are managed with responsible integrity and due process with respect to priorities, the inherent uncertainty of flight date commitment is a cost and operational risk to a commercial customer;

h. Astronaut crew rotation for shuttle flights incurs a burden on retraining to ensure that appropriate expertise is available to conduct processing experiments, particularly if these are repetitive experiments. The benefits of manned versus autonomous experimental management has been quoted as worthy of a critical trade study. The retraining burden is certainly a cost disincentive to commercial involvement;

i. An inherent requirement within experimental programs is timely repetition subject to known variation of control factors. This requirement is difficult to implement due to uncertain manifests and change of associated onboard personnel. Recognizing that these random factors are perhaps inevitable with the shuttle-based program, they do, however, represent a further unfavorable factor regarding commercial involvement;

j. The nonavailability of regular routine flights committed to materials-processing experiments is a further disincentive to commercial and noncommercial involvement. This nonavailability is understandable due to the competition for access to space coupled with the limited number of annual shuttle flights;

k. Shuttle flights inherently involve human presence within the microgravity environment created by orbital precession. While this is an obvious advantage with respect to the presence of human intelligence, the microgravity environment is subject to unpredictable local disturbances due to crew motion. Some concern has been expressed by some respondents to the CSTS survey that these disturbances could affect the outcome of experiments. In addition, the possibility of undisciplined or accidental activities could also impact experimental processing, particularly in early phases of sample growth. The current necessity of human presence has been advised as a potentially unfavorable factor;

l. Limited time on orbit obtainable via shuttle-hosted experiments is a major problem. The maximum duration flight to date has been about 12 days, whereas potential experimental users have strongly advised that 30 to 90 days would be much preferred. Some experiments cannot tolerate 90 days; the selection is a function of the material being processed;

m. The issue of proprietary rights to experimental data derived from zero-cost access to space provided at public expense is a troubling concept (i.e., free rides if the experimenter is affiliated with any one of the 17 CCDSs).

There also seems to be a lack of published data reporting the benefits of microgravity processing. This is particularly surprising since many academic organizations (CCDSs) are associated with current experimental microgravity activities.
a. Even direct approaches to some selected CCDSs by CSTS researchers have failed to solicit specific information with reference to positive results of microgravity experimentation. The author is of the opinion that resolution of the above issues and perplexities would considerably enhance progress towards greater involvement by commercial entities, with subsequent long-term beneficial results;

b. The cost of access to space via the shuttle is perceived by commercial industry to be prohibitively high, particularly when the potential return on investment appears to be illusive. Even in the scenario of free rides, obtainable as an affiliate or member of one of the CCDSs, the cost of long-term involvement in preparation and certification of flight hardware and samples is a major factor.

Perhaps the Spacehab carrier situation is a good example. The rental cost of each locker is about $1.8 million and preparation and approval time duration is about 18 to 24 months. As noted previously, this time commitment is a significant additional cost to the user. The effective cost for orbital flight is between $6-7K per hour, which is almost two orders of magnitude above the cost of ground-based research.

The locker price is a function of return on private capital investment raised to design and develop this commercial shuttle annex carrier and also the cost charged by NASA for each flight.

As an example of manifest changes, the second flight of this carrier has been slipped due to the Hubble repair mission and delayed from late 1993 to early 1994.

c. The amount of electrical power available to support shuttle annex experiments is also limited. The result is that activities of a commercial scale cannot be accommodated, at least with reference to the growth of industrial-size electronic material crystals.

Any manned orbital facility must of necessity budget a proportion of available power to include life-support functions, which effectively reduces power available for experimental support. Some respondents to the CSTS survey also expressed similar concerns with reference to the Space Station experimental support facilities.

Drivers Pro:

The development of a future (2000-2010) market for space manufacturing/processing depends on a number of factors unrelated to the new development of a suitable low-cost launch system.

It is essential that NASA's commitment to the support of microgravity experimental projects be aggressively continued and, if possible, expanded regardless of the limitations relative to commercial applications that have been previously described. The probability of achieving breakthrough enabling technologies will be enhanced only by sustaining or preferably increasing the number of flight opportunities.

An aggressive commitment to the publication of experience and results achieved through microgravity processing will stimulate more widespread interest within the general but relevant industrial base. A recurrent theme of feedback derived from contacts with commercial companies was a lack of knowledge as to what had been achieved to date.

NASA's support of the Spacehab and Comet programs is also an essential near-term stimulant to long-term commercial involvement.

Following are the essential characteristics of a potential launch services system that, if available, would fully support a significant commercial space manufacturing/processing-based industry.

a. Commercial ownership and operation of the access-to-space transportation system available to support space manufacturing/processing is essential to support commercial utilization and, therefore, development of the market;

b. Routine access to space, similar to flight travel opportunity offered by the commercial airline industries, is required;

c. Elimination of extended time scales between the decision of intent and the launch-to-orbit event would be more suitable for commercial users. This would effectively maximize the efficiency of staff commitment and reduce the overall cost of involvement in space-related activities;

d. The postflight delivery of processed samples or products to a fixed known location without deviations would be favorable to commercial utilization;

e. Launch on schedule must be an essential characteristic of the space transportation system;

f. The launch of a given payload to an agreed schedule with zero probability of manifest changes is an essential requirement for commercial business operations;

g. An unmanned, autonomous system for payload launch, on-orbit processing, and processed sample or product return is much preferred by respondents interviewed by the CSTS researchers. The astronaut corps would have no part in this system and requirements and cost for repetitive training would therefore be eliminated;

h. Routine airline-type operations would enable the timely repetition of space processing activities;

i. A commercial space transportation system would provide regular routine flights dedicated to materials processing requirements;

j. The potential degradation of the orbital microgravity environment by human presence would be eliminated with an autonomous system. This would require the development of automated sample-processing facilities within the orbital asset;

k. The commercial system must provide a minimum of 30 days and a maximum of 90 days access to the orbital microgravity environment. This effectively means a regular return of processed samples achieved by either an on-orbit resident return capsule (s) or a recovery capsule launched from the ground with rendezvous and offloading capabilities;

l. Proprietary ownership of data derived from space applications would be absolutely guaranteed with a commercially owned and operated access-to-space system wherein launch, orbital processing facilities, and product return capsule services are obtained under standard contract conditions;

m. A low-cost access-to-space system is an enabling essential characteristic for commercial market stimulation and support. Development of the acceptable cost is addressed elsewhere in this report;

n. An orbital asset designed specifically to maximize the electrical power available for microgravity processing is also essential. A sun synchronous, LEO dedicated, autonomous processing asset would provide the necessary facilities. On-Orbit System Description

The commercial space manufacturing/processing system will comprise an orbiting service module (estimated as 4,000 lb mass) equipped with autonomous microgravity processing capabilities. These capabilities will be used to support the manufacture of electronic, photonic, and detector materials; ultrahigh vacuum processing; biological and organic materials processing; and the support of research subunits for microgravity activities. The capabilities will include monitor and control facilities for each processing activity.

The service module will be designed for at least 5-year on-orbit operations and will be configured with standard guidance, navigation and control functions; automated rendezvous and docking functions; command and communications functions; environmental control capability; high onboard continuous power systems; and an autonomous product module exchange facility for onload/offload of, respectively, unprocessed and processed product material subunits.

The service module will be placed in a polar sun-synchronous orbit to enable maximum onboard electrical power availability (estimated as 20kW) to support comprehensive product processing. A trade study has been conducted to compare the placement of the service module at a high-inclination orbit versus a low-inclination orbit (app. C.1) with the result that the polar orbit is preferred.

The orbital service module will be serviced at 30-day intervals via a launch system that will provide access to polar orbit for an approximately 1,500 lb recovery module that will carry a maximum of 3,000 lb of product and containment support modules.

The recovery module chase vehicle will be designed with autonomous rendezvous and docking capability (with ground support back up) such as to dock with the orbiting service module.

Following successful docking of the recovery module with the service module, the unprocessed product materials with support containment will be offloaded to the service module and the processed products will be onloaded to the recovery module. The latter module will then detach from the service module and deorbit to reentry for recovery at a fixed preplanned land-based site within the continental United States.

A recovery site team, equipped with helicopter services, and queued by a dedicated ground-based recovery module tracking system, will search or, locate, recover, and deliver the recovery module containing processed products to a dedicated recovery site facility (RSF). This RSF will be equipped with all necessary facilities to preserve the functional integrity of the returned processed products prior to pickup by the appropriate system customer.

Recovery modules will be refurbished on a routine basis and delivered to the launch vehicle site for integration and reuse. The disposal of the orbital service module following completion of useful service life is an open issue.

Possibilities include a deorbit rescue mission using an unloaded recovery module or perhaps a shuttle rendezvous and recovery. The former is preferred because of its system-independent nature without reliance on government-controlled assets. The orbital service module will be monitored and controlled during routine autonomous processing operations and possibly during rendezvous operations using a ground-based single program operations center (POC) positioned at a high geographic location (possibly Alaska).

In summary, the mass of the orbital service module is estimated as 4,000 lb, the recovery module as 1,500 lb, and the 30-day periodic product specific payloads as 3,000 lb. These estimated mass budgets are predicted as adequate to provide the necessary space manufacturing/processing facilities and service capabilities and effectively define the maximum payload weight for the commercial launch system as a maximum 4,500 lb to a 98-deg sun-synchronous polar orbit. Business Assessment

A viable space transportation system for commercial space manufacturing/processing must provide a product and/or service that is specifically designed and operated with commercial use as the fundamental premise.

As discussed at length within this report, the current NASA-dominated system of providing access to a microgravity environment is not appropriate for this long-term commercial use. The current system does, however, (with some limitations) support the necessary preceding process of experimentation and demonstration of the potential benefits of microgravity processing.

To perform the business assessment of a future commercial space manufacturing/processing system, it has been assumed for convenience that the total system will be designed, built, owned, and operated by the space launch company or consortium of companies.

It has also been necessary to postulate an enabling system configuration that contains the essential subsystem elements and operating scenarios derived from discussions held with users of the current NASA-sponsored systems and also potential future users.

This enabling configuration as described in sections and has been evaluated in terms of development and subsequent operation.

Standard investment analysis techniques were used to evaluate the space manufacturing/processing system. The goal of the analyses was to determine the feasibility of the launch system from an investment/return perspective. Analyses were performed assuming varied flight profiles, R&D expenditure profiles, and government funding levels.

The criterion for an acceptable investment opportunity was a 20% internal rate of return (IRR). A 20% IRR is achievable on paper in any investment analysis since the analysis can assume enough revenue (either through volume or profit margin) to produce a 20% IRR. The discriminator is the market and its ability to support sufficient sales volume at the calculated price level to produce the subject IRR. The approach taken in this analysis was (given investment levels, recurring costs, and flight profiles) what unit price is necessary to achieve a 20% IRR. The unit price is examined to determine if the market will bear such a price.

Some basic assumptions were used for all the space manufacturing/processing investment analysis scenarios. R&D effort began 5 years before the first flight. Fixed asset investment began 3 years before first flight. Straight-line depreciation was used for the life of the asset (7 years). Additional replacement fixed assets were added with a 1-year leadtime. Tax rate was assumed at 35% and loss carry-forwards offset outyear tax liabilities. Working capital adjustments were not included. The ROI analysis was performed over a 15-year window, which encompassed 5 years of R&D and 10 years of operations.

Three scenarios were analyzed: D, D1, and D2. Scenario D straight-lined the R&D expenditures over 5 years and used an initial step function flight rate beginning at IOC and then a gradual-growth flight profile. Scenario D1 utilized the same flight profile, while distributing the R&D expenditures over the 5 years as follows: 10% in year 1, 20% in year 2, 30% in year 3, 30 % in year 4, and 10% in year 5. Scenario D2 used the distributed R&D profile and a 3-year flight ramp up at IOC.

Within each scenario were three subscenarios, representing different levels of government funding of R&D. The government was assumed to fund all R&D and initial fixed assets, 50% of R&D and initial fixed assets, and no R&D or initial fixed assets. Figure below presents the price per pound to orbit of the scenarios D, D1, and D2.

Necessary Price for 20% IRR
Analysis ScenarioInvestment StrategyMaximum $K/lbMinimum $K/lbAverage $K/lb
DZero Gov't18.512.815
Total Gov't6.96.36.6
D1Zero Gov't16.812.715
Total Gov't6.66.26.3
D2Zero Gov't25.312.714.8
Total Gov't6.66.26.3

Figure Commercial Price Scenarios for Space Manufacturing/Processing

The rough order of magnitude estimate for R&D investment, the cost of replacement of limited life assets, refurbishment of recovery modules, and operation of the system are given in appendix C.2, together with detailed spreadsheets of the financial analysis for each scenario.

The business analysis performed as above was kept at a fairly simplistic level. Since the input data were speculative and business operations, which dictate cash flows, are not well defined, complex analysis techniques would not add value to the results. The criteria for an acceptable investment opportunity was a 20% internal rate of return (IRR). A 20% hurdle rate is consistent with the level of investment and speculative nature of the programs. However, increases to the risk-free rate in the time frame of the analysis may warrant a higher hurdle rate.

R&D investments were separated into two parts, R&D and fixed asset-related R&D. R&D was treated as a sunk cost and recovered through future profits. Fixed-asset design was assigned to the asset value and depreciated over the useful life of the asset. Straight-line depreciation was used, although an accelerated method is normally used for tax and book purposes. The rationale behind straight-line is twofold, elimination of the need to classify assets and the ability to match the depreciation period to the true (assumed) useful life of the asset. The analysis assumed the businesses to be going concerns (i.e., no recoupment of residual fixed asset value at the end of the analysis period).

A significant factor in the analysis is whether the business entity is a standalone company or part of a larger firm. The tax implication is loss carry-forward. A standalone company will roll forward losses (investment) and offset future tax liabilities, whereas a division's or subsidiary's losses will offset its current year tax liability (assuming the parent shows sufficient profit). The effect of being a division is an alleviation of the cash burden during the R&D phase. The model used herein assumed a standalone entity and associated loss carry-forward.

Net working capital adjustments were excluded from the analyses. Details of the payment schedules were not clearly defined, so cash receipts were assumed to coincide with expenditures and profits were paid upon launch. Market Infrastructure

The current infrastructure that supports experimental exploitation of microgravity processing has been previously discussed in section Fundamentally the commercial access infrastructure is presently dominated by NASA through the use of the shuttle configured with various annex processing equipment and by the sponsorship of 17 previous CCDSs, the latter with some partial support from commercial sources.

A limited number of value-added companies are also involved and provide individual materials processing and containment equipment. The companies usually act as support agencies between the user and the CCDSs.

Other than long-exposure duration experiments and certain untended get-away special canisters, each of the microgravity processing experiments is human tended by the shuttle crew with associated repetitive training requirements.

An exception to the above space access logistics involving the CCDSs is the commercially developed Spacehab processing module. Herein the user negotiates with the commercial Spacehab company, which in turn deals directly with NASA for shuttle manifests. It is understood, however, that to date the majority of users for Spacehab locker facilities are in fact also NASA centers.

The COMET program managed by the University of Tennessee Center for Space Transportation and Applied Research (CSTAR) is currently in a development stage as a small-scale (~300 lb of experiments) freeflyer-based system. This is an unmanned alternative to the shuttle but is also sponsored and funded by NASA.

This overall current NASA-dominated infrastructure is perhaps the only currently available and sustainable U.S. system to support experimental exploitation of microgravity processing but for the reasons discussed in the Drivers Con paragraphs of the "Market Evaluation" above, this system is not appropriate for profitable large scale commercial exploitation.

Based on feedback from CSTS research interviews, an infrastructure necessary to support commercial utilization of the benefits of microgravity processing is believed to be that of commercial ownership and operation devoid of government involvement other than as a customer and a regulating agency using commercial standards.

The current infrastructure as depicted in figure is more suitable for experimental exploitation of microgravity processing (an essential preliminary activity) and appears to be self-perpetuating with regard to government access control and operation. This self-perpetuation is due to a number of factors, including the concept of "free rides" offered to users by the shuttle-based systems, the sponsorship of CCDSs by NASA, the dominant purchase by NASA of facilities offered by the commercially developed Spacehab, the NASA funding of the COMET program through CCDSs and the proposed access to NASA-owned Alpha Space Station. None of these access routes are conducive to encourage routine commercial exploitation of space.

Figure Space Manufacturing/Processing Infrastructure, Today

The existing small-scale but commercial access to the MIR Space Station is believed to be an independent attempt by commercial sources to gain access to a controlled microgravity orbital environment independent of NASA or U.S. government control.

The illustration of figure outlines a future commercially compatible recommended infrastructure. Within the Drivers Pro paragraphs of section and within the System Description of section, it has been assumed that the total system consisting of the large-scale orbital service module, the recovery modules, the launch system, and both the launch facilities and recovery site facilities are all maintained, owned, and operated by the commercial launch company.

Figure Space Manufacturing/Processing Infrastructure, Future

The future system an operational commercial large scale CSTS space manufacturing/processing system as defined in the previous sections of this report. The commercial version of the COMET freeflyer is predicted to be suitable for small-scale experimental activities, possibly as pilot projects for subsequent migration to the larger scale commercial CSTS system. The relevant competitive utility of these somewhat similar concept systems will eventually be defined by market forces.

An upgraded MIR station and the ALPHA station will be available as manned facilities assumed to be supportive of fundamental research-oriented activities but with access availability for microgravity processing shared with other life support and space science-related missions.

The users for the large-scale commercial space manufacturing/processing will interface with the CSTS commercial launch system either directly or through value-added commercial companies that provide individual customized materials processing and containment capsules.

3.2.3 Prospective Users Contacts

John Cassanto, President
Ulises (Al) Alvarado, Sys. Eng. Mgr.
Instrumentation Technology Associates (ITA)
Exton, PA 19341
Louis Hemmerdinger
Dr. David Larson
Grant Hedrick Grumman Corporation
Bethpage, Long Island, NY 11714
Dr. Hardy W. Chan, VP and
Director of Biotechnology
Dr. Randolph M. Johnson
Syntex Discovery Research
Palo Alto, CA 94303
Dr. William Wilcox, Center Director
Mark Pasch, Dir., Technology Dev.
Prof. Liya Regel
Consortium for Commercial Crystal Growth
Clarkson University
Potsdam, NY 13699-5700
Chuck Rudiger
Lockheed Missiles & Space Company, Inc.
Sunnyvale, CA 94088
John Vellinger, Vice President
Space Hardware Optimization Technology (SHOT)
Floyd Knobs, IN 47119
Dr. Javier de Luis, President
Dr. Anthony Arrott
Payload Systems, Inc.
Cambridge, MA 02142
Al Reeser, President and CEO
David Rossi, V.P. - Bus. Development
Spacehab Incorporated
Arlington, VA 22202
Dr. Wesley Hymer, Director
Center for Cell Research
Penn State University
University Park, PA 16802-6005
Dr. Charles Bugg, Director
University of Alabama - Birmingham
Birmingham, AL 35294-0005
Dr. Steve Schwartzkopf
Manager: Life Sciences & Biotechnology
Lockheed Missiles & Space Company, Inc.
Sunnyvale, CA 94088
Dr. Ray Bula
Wisconsin Center for Space Automation
and Robotics (WCSAR)
University of Wisconsin
Madison, WI 53706
Dr. Alex Ignatiev, Director
Space Vacuum Epitaxy Center
Houston, TX 77204-5507
Ole Smistad, COMET Program Mgr.
Space Industries
League City, TX 77573
Dr. Charles Lundquist, Director
University of Alabama - Huntsville
Huntsville, AL 35899
John Lloyd, ACRV Program Mgr.
Sam Housten, ACRV CSE
Lockheed Missiles & Space Company, Inc.
Sunnyvale, CA 94088 Summary of User Inputs

Instrumentation Technology Associates
(ITA) with John Cassanto. See
Appendix C.3.1. The firm has been in business since 1982, providing technical space services and space hardware (instrumentation and materials processing in space (MPS) hardware and containment devices) to university researchers, and biotechnology and drug companies who want to perform experiments in space. They employ about five full-time personnel, with an additional 10 to 20 part-time personnel available, as required to support specific projects or space shuttle launches. Messrs. Cassanto and Alvarado and other personnel previously worked for GE Aerospace, Valley Forge, PA. Mr. Cassanto left GE/VF to start Instrumentation Technology Associates.

The firm provides their engineering services and hardware to drug (pharmaceutical, chemical, biotechnology, etc.) companies. They provide the technical understanding of space to drug company researchers who want to place their experiments on the shuttle, Spacehab, or the MIR.

ITA developed the Materials Dispersion Apparatus (MDA) minilab, which can accommodate as many as 150 sample data points during protein crystal growth, casting thin film membranes, cell research, encapsulation of drugs, and conducting biomedical and fluid science experiments. Four MDA units are accommodated in current shuttle flights, in mid-deck lockers, and provide 500 to 600 data points. Mr. Cassanto says other types of experiment holders that are available to researchers typically provide six sample points.

A major product area for ITA includes providing their services and equipment to researchers who are experimenting with space-grown protein crystals. Researchers have demonstrated they can grow larger, more uniform protein crystals faster in a microgravity environment than can be done on Earth. The three-dimensional molecular structure of the larger, space-grown crystals can be determined using X-ray diffraction. Determining the molecular structure is an essential step in several areas of medical research and rational drug design.

At the current cost and infrastructure, the experimenters will continue their current level of space research, primarily to exploit the two principal attributes of space: the diminution of gravity and the attendant virtual absence of convection. There have been no scientific breakthroughs that would indicate a high-growth space market. There is no certainty that a breakthrough will occur in the foreseeable future.

ITA personnel believe that the probability of a biomedical breakthrough could be enhanced by increasing the data yield per mid-deck locker. One approach to accomplish this is to use high-density space processing hardware devices that allow multiple techniques to process samples. This can be made available through the private sector. ITA has the technology and equipment on hand to increase the data yield by an order of magnitude, for example, from the present ~ 60 samples to 600 samples per mid-deck locker.

Consortium for Commercial Crystal Growth (CCCG)
with Dr. William Wilcox. See Appendix C.3.2. The center, established in 1986 under NASA Code C funding, conducts technology development for commercial growth of electronic, photonic, and detector crystalline materials.

Crystal growth activities in space are experimental rather than commercial manufacturing, and the center was involved with five shuttle-based microgravity-related experiments in 1992.

Their experience indicates skepticism about immediate space applications from the commercial sector due to high costs. Their view is that a preferred facility for conducting microgravity experiments should be automated and unmanned and should provide extended duration orbital flights.

They believe that one of the greatest benefits achieved by the CCDSs is the development of ground-based capabilities in commercial crystal growth.

The launch system company should provide support to the user by affording on-schedule launches, return of samples to a predetermined location, and access to extended duration orbital flights in a simple straightforward way with an absence of bureaucratic procedures.

Commercial value-added companies should be encouraged to provide instrumented sample containment equipment for general application in ground- and space-related activities. There appears to be little short-term benefit in "manufacturing" crystalline material in the space environment, since to date there has been no statistically significant evidence of a higher performing infrared or semiconductor crystal material that has been produced using methods unique to the space environment. With reference to space application activities, there appears to be currently near-zero sensitivity of user demand to launch system cost. This is due to the free rides currently offered by NASA and also the fact that few higher performing materials have been produced using methods unique to the space environment.

The lack of experience with regard to space applications, shown by nonspace commercial companies, is such that informed opinions on the investment potential of space-based business is difficult to obtain at this time.

Payload Systems Inc.
with Dr. Javier de Luis. See Appendix C.3.3. The researchers met with Dr. Javier de Luis, president, Payload Systems Inc. (PSI), and with Dr. Anthony Arrott, formerly with PSI, on August 3, 1993, to discuss the commercial markets for space. For reference: Dr. Arrott can be reached at Arthur D. Little, Acorn Park, Cambridge, MA 02140-2390. Tel 617/498.5886 and FAX: 617/498.7007. The firm began business operations in 1984. They currently employ about 20 personnel. The 3-hour meeting focused on applications in commercial space research markets.

PSI provides space experiment containment devices or holders and instrumentation; the combination can be referred to as "minilabs." They also provide space engineering and payload integration services to drug companies (i.e., pharmaceutical, biotechnology, medical), universities, and government researchers who want to perform experiments in space. Recently, the firm received a contract from the Canadian Space Agency to develop a furnace and data management system that will support Canadian researchers' needs. The equipment will fly on Spacehab.

The company was flying three missions per year on NASA's C-135 parabolic, øg flights. However, they have stopped these flights because NASA-HQs lawyers redefined the liability to the user to include the aircraft and crew. The insurance is now more than the flight costs.

Dr. de Luis commented, "…they are helping experimenters get into space." PSI has moved aggressively into providing innovative space services to the users. In 1988 they began contracting with the Russians to fly on MIR. This move has been successful for the company and they are seeing an increase in the frequency of biomedical research.

Some key reasons why researchers want to fly on MIR are-

a. MIR provides the researchers with more than 2 weeks on orbit.
b. The experimenters do not have to disclose the specific research compounds.
c. The Russians can accommodate an increased frequency of space experiments.
d. There is less leadtime for reserving space on MIR.
e. There is much less preplanning, meeting, and reviewing than with NASA flights.
Dr. de Luis thinks protein crystal research in space is a growing market. The experimenters want to do much more research in space. The number of protein crystal space experiments is increasing significantly. The actual increase or growth, however, is confidential to the experimenters.

Payload Systems' customers include-

a. USA: BioServe Space Technologies, Kansas State, Penn State (CCR/CCDS), Bionetics, MIT, Instrumentation Technology Associates, Los Alamos National Laboratory.
b. Japan: Hitachi, Fujitsu Laboratories, Ishikawayima-Harima Heavy Industries.
c. Europe: Novaspace, Kayser-Threde, OHB System.
d. Canada: Alberta Research Council, National Research Council of Canada.

University of Alabama - Birmingham
with Dr. Charles Bugg. See Appendix C.3.4. The CMC specializes in space-grown crystals of biological materials that are identified by participating firms in pharmaceutical, biotechnology, and chemical industries (i.e., drug companies). The goal is to work with companies to develop the technology and applications for space-based materials processing of biological crystals.

The mission of the center focuses on-

a. Developing new techniques for protein crystal growth on Earth and in space. (This report summarizes the space-related activities.)
b. Structural studies of biological macromolecules using protein crystallography for drug design and protein engineering.
c. Definition and development of hardware and software for performing various macromolecular crystallography experiments.
Since 1988, the center has flown 17 protein crystal experiments on the space shuttle. The next shuttle flight (STS-51) will include another CMC experiment. The last shuttle flight had one CMC experiment in the Spacehab module. Other CMC experiments are scheduled on future shuttle flights.

There are also plans to perform CMC flights on free flyers in space. CMC experiments had been designated to fly on the Comet free flyer; however, the Comet project is on hold (see Comet Summary below) pending additional funding to complete the development. Another alternate is the LABS, a new free-flyer project discussed below.

Space Vacuum Epitaxy Centers
with Dr. Alex Ignatiev. See Appendix C.3.5. The researchers met with Dr. Alex Ignatiev, director of the Space Vacuum Epitaxy Center (SVEC), at the University of Houston on July 29, 1993, to discuss the commercial markets for space, including space manufacturing.

The SVEC is a NASA CCDS. Their primary technical area is applied engineering on thin film epitaxy using molecular beam epitaxy (MBE) processes for producing a new generation of semiconductor, magnetic, and superconductor thin-film materials.

The 1-1/2 hour meeting focused on the SVEC plan to produce higher quality thin films in space than can be produced in Earth-based, production vacuum chambers. Several years of work have led up to a space demonstration flight of the deposition of thin films of gallium arsenide (GaAs) wafers, layer-by-layer in a harder vacuum than can be achieved in a manufacturing environment on Earth.

SVEC researchers conceived a wake shield facility (WSF), with a 12-foot disc flying in LEO (fig. The free-flying facility will be deployed from the shuttle. The stainless steel disc is estimated to provide a vacuum of 10 E-14 torr on the wake side. The first of four flights, a 2-day mission, will demonstrate thin-film growth of several GaAs 6- to 7-micron wafers, using MBE processes. Three additional flights will expand the thin-film processing capabilities and the autonomy of free-flight WSF operations.

Figure Wake Shield Free Flyer Concept

The first flight is on STS-60, scheduled for early 1994. The second and third shuttle flights will increase the duration of processing operations and autonomy of free-flight operations. For the first flight, the WSF hardware is estimated to cost $12.5 million. Additional hardware through flight three will increase the facility costs to $22 million. The industrial partners are contributing an additional $3 million.

Space Industries, Inc., is the principal industrial partner for developing the WSF flight hardware. A fourth flight would demonstrate pilot commercial operations, but will require additional industrial funding. The WSF is a proof-of-concept (Mark I) demonstration program. Dr. Ignatiev has plans for a follow-on program (Mark II), that will demonstrate commercial approaches to thin-film deposition process on GaAs wafers.

The University of Houston Business School estimated that a free-flyer Mark II facility with a 5-year operational life would be economically feasible. For commercial operations, approximately four resupply flights per year would be required. Each flight would deliver approximately 100 lb of materials for processing and return an equal weight of finished product to Earth. The facility would cost about $30 million to build.

University of Alabama-Huntsville
with Dr. Charles Lundquist. See
Appendix C.3.6. The writer contacted the Dr. Lundquist, director, UAH-HSV. They are a university organization working as part of the NASA Center for the Commercial Development of Space (CCDS) program. They are lead center for materials development in space.

Regarding CSTS, he commented that there have been many studies, several per year. The companies and his activity are getting tired of so many studies.

Dr. Lundquist has 8 to 10 ongoing, active materials development initiatives as part of the CCDS program. Some are with small companies, other with large business. Small business examples are with ITA, John Casanto, in Pennsylvania. They are selling space on a facility that can go into LEO to other companies.

Another small business is SHOT (Space Hardware Optimization Technology), Floyd Knobs, Indiana. Contact is Mark Duser, president. Application is biological separation. Dr. Lundquist promised to send complete contact information for these referrals. He also promised to provide recent reports on their accomplishments.

An agreement was made to follow up with meetings or telecons in the later part of July to discuss these applications, when the alliance begins the market research phase.

Grumman Corporation
with Mr. Louis Hemmerdinger. See Appendix C.3.7 . Grumman has considerable experience in research and development of crystalline group III-V materials. They have also been involved as a commercial member with the Center for Commercial Crystal Growth in Space at Clarkson University, Potsdam, NY.

This membership has been discontinued due to the perception that the center activities seem to emphasize university-based research rather than commercial-based research. The apparent trend of the CCDSs is to conduct growth experiments on smaller samples, requiring less on-orbit power than is required for commercial products. In addition, the quality and size capability of ground-based crystal growth furnaces is increasing rapidly, whereas the NASA trend is to smaller size equipment for space applications.

A past Grumman proposal to utilize a limited number of initial no-cost shuttle flights to demonstrate proof-of-concept for an in-space commercial crystal growth venture was mutually terminated by NASA and Grumman following the Challenger disaster, due to a 4 to 5 year delay to launch the furnace system.

Grumman has no current plan to participate in space applications of crystal growth or subsequent manufacturing. Prevailing NASA-sponsored flight-qualified equipment and power limitations are considered inappropriate for the crystal materials they would be interested in producing.

In addition, the limited on-orbit duration and extended turnaround time between experimental proposal request and actual flight for shuttle-based flights is not compatible with Grumman's commercial-scale requirements.

Grumman appears to favor a commercial access-to-space launch system that must provide reliable, launch-on-schedule, extended-duration orbital facilities, recovery capabilities, and appropriate contractual agreements with regard to payload accommodations and multiple launch commitments.

Grumman does not anticipate a significant space manufacturing market until the current experimental exploitation of space for crystal growth has demonstrated a conclusive advantage for material processing in a microgravity environment.

Given this successive demonstration and low-cost of access, Grumman may use the system about four times annually. The decision criteria for space application depend also on the availability of equipment (furnaces) and adequate power to support large crystal growth.

Research and Development Facilities - Lockheed Missiles & Space Company
with Mr. Chuck Rudiger. See Appendix C.3.8 . Unique environmental conditions obtainable within an Earth orbital asset should be a stimulant to spaceborne research and development, particularly for materials and life sciences considerations. Payloads that feature research and development assets will be broad-based, and, therefore, no specific form factors were estimated at this time.

The launch system company must provide a go-and-return capability in support of an orbital R&D facility. In addition, human two-way transportation, stringent environmental and temporal constraints on access and return, and autonomous rendezvous and docking capability may need to be provided. Current infrastructure involves NASA and the government central to the whole process of access-to-space. The incumbent bureaucracies, uncertain STS flight schedules, and the potential for priority manifesting are not conducive to the concept of commercial use of space for R&D facilities.

The commercial user must be offered on-time, reliable, cost-effective, and efficient access-to-space and safe return of processed experimental assets to a guaranteed specific landing location. All these attributes must be available with absolutely minimum bureaucratic procedural processes.

The current costs burdened on the space experimenter user community are far too high, even though the actual ride is free. These costs include the use of an inflight protective container, resources and materials commitment to experiment planning, multiple sample preparation, recovery from landing sites, and final analysis of resultant materials. Some of these costs are significantly influenced by STS flight schedule uncertainties and priority manifesting.

Acquisition of independent company funding for space-based research is usually more difficult than for nonspace-based projects, is usually associated with business development opportunities for large programs, and incurs the risk of cancellation due to shuttle flight delays and NASA procurement decision fluctuations.

Spacehab Incorporated
with Mr. Al Reeser. See Appendix C.3.9 . Spacehab Incorporated is a commercial company that offers a pressurized habitant module that flies in the shuttle cargo bay. The SH-1 SPACEHAB module first flew on STS-57 on June 3, 1993. The module provides pressurized lockers, and single and double rack enclosures for commercial and government researchers to conduct experiments in the microgravity environment of space. During the initial flight, crew members operated and monitored 21 laboratory experiments during the 8-day mission.

The firm's headquarters are in Alexandria, VA, with business operations near Kennedy Space Center (KSC) and Johnson Space Center (JSC). They have a payload processing and launch operations facilities near KSC and mission operations offices near JSC.

Space Agriculture - Lockheed Missiles & Space Company
with Dr. Steve Schwartzkopf. See Appendix C.3.10. Lockheed has participated in the STS-based Life Science Flight Experiments program.

Pertinent to space agriculture, the program seeks to identify the role of gravity in plant cellular processes, embryonic development, morphology, and physiology. An attempt is ongoing to identify mechanisms of gravity sensing and the transmission of gravity sensing perception information in plants. The interaction of light and stress stimuli is also being studied. Perhaps the main emphasis of understanding plant growth and metabolism is to provide for long-term survival and self-operation of bioregenerative systems for future space missions.

Lockheed has developed a number of flight-qualified common module-type life science laboratory equipment items, which have flown on the shuttle.

A general characterization for space agricultural payloads is that of similarity to those required for human transportation. Experiments require a life-sustaining environment with nutrients, temperature, pressure, airflow, illumination, and contaminants carefully controlled.

This life-sustaining environment is required throughout the flight experiment including prelaunch, recovery, and delivery back to the original sample source, although the levels can be changed during launch and landing. The enclosures must allow confident identification of the isolated effects of microgravity.

Flight durations of 12 days maximum as obtained via the shuttle are only of limited value in the study of plant physiology in microgravity; durations of 30 to 90 days would be more valuable to researchers.

No agricultural products are currently being manufactured in space. Companies involved in ground-based production of agricultural products are mostly inexperienced in space applications. The opinion was expressed that there is currently no predictable benefit to producing plants in space; in fact some plants have become sterile when exposed to microgravity. Effects observed to date are stochastic rather than deterministic.

The effects of microgravity on plant growth are not understood and there appears to be no reason to suppose that the environment of space "encourages" growth.

It appears that the primary reason for plant-based research experiments in space is in support of development of a bioregenerative environment to sustain human life in space vehicles or planetary colonies rather than the discovery of a new-generation plant species derived from growth in microgravity.

The interviewee felt that reduction in launch costs either direct or indirect would lead to an increased demand for experimental missions. This demand could be rapidly accumulative if a unique advantage of the space environment were demonstrated, particularly in the microbiology field rather than space agriculture.

The launch system must allow late access to samples (2 hours), have high launch reliability, launch on schedule, and guaranteed return to a postflight collection point.

Space Industries
with Mr. Ole Smistad. See Appendix C.3.11. The writer contacted Space Industries to discuss their COMET program as part of the CSTS market research project. Smistad is the program manager for the COMET program.

The COMET is basically a service module, or space platform, that can be used to perform space manufacturing and processing. Space Industries views themselves as a service organization that provides the module to end users.

The end users buy space in the service module for performing processing and manufacturing in space. The service module weight is in the 1-ton range. Smistad says that the shuttle is too expensive for space manufacturing applications. An inexpensive ELV would be appropriate for the mission. The mission requires the payload to be recovered, and therefore, a recovery module is needed to return the payload to Earth. Space Industries has developed the overall approach for supporting potential manufacturers with a service module and recovery module.

Space Industries has evaluated and is familiar with Pegasus for launching the service module. Estimated launch costs for Pegasus are about $12 million.

Figure shows the Smistad summary of the overall costs for a COMET flight as-

Product Element/ActivityCost ($M)
Expendable launch vehicle, including ELV and ground ops, is about$18$6
Service module$6$3
Recovery module$6$3
Mission operations, including ground stations$2$2

Figure Overall Costs for a COMET Flight

The key points of the discussion included-
a. Reducing the launch vehicle cost by a factor of three to $6 million will make it economically possible to sell space manufacturing to users.

b. The benefits would include increased launch rates.

c. Lower operating costs for space manufacturing will cause innovation.

Syntex Discovery Research
with Dr. Hardy W. Chan. See
Appendix C.3.12. Syntex has no direct experience of space applications and does not budget to track developments that may be occurring.

Syntex is a "small molecule" pharmaceutical company with ground-based annual manufacturing of thousands of metric tons of materials. Research budget is $300 million (~20% of profit) totally expended in nonspace activities.

Syntex's assessment of space applications is that they have seen no evidence of benefit to their particular industrial interests. If a smaller biomedical or biotechnology company were to discover some kind of enabling technology derived from space application experiments, then Syntex would simply buy equity in that company. This would provide the necessary production, distribution, and marketing support necessary to commercially capitalize on the enabling technology.

Subsequent to the demonstration of enabling technology, Syntex may well become involved in space experiments targeted to drug development with multiple flights annually at $200K per flight.

Payload samples probably would not exceed a few kilograms per year. Syntex would need appropriate sample containment enclosures and close support in the development of their inhouse space application experience base.

A reliable, launch-on-schedule, late-sample-access-and-early-retrieval, rapid-turnaround space transportation system would be required. Commercial business practices are perceived as incompatible with NASA's current methodologies associated with space access via the shuttle carrier. Syntex affirmed that they would never produce "small molecule" products in space. The company perceives that the overall cost of space application is high without specific reference to launch cost apportionment.

Pharmaceutical product pricing is a function of supply and demand rather than the recovery of specific investment in development of a particular product.

Syntex would only use space for product research and development if they become convinced that the space environment afforded a definite unique advantage.

They also are concerned that a good starting point for commercial space application be established by NASA funding.

Space Hardware Optimization Technology
(SHOT) with Mr. John Vellinger. See Appendix C.3.13. The researchers met with Mr. John Vellinger, vice president, SHOT (Space Hardware Optimization Technology) on August 2, 1993, for 2 hours to discuss the commercial markets for space. The company is a small business with four full-time personnel, and several part-time personnel. The firm began business operations in 1989.

SHOT provides space equipment, payload integration, and engineering services to drug company (pharmaceutical, biotechnology, etc) researchers performing space experiments. The firm provides the following type products and services to end users:

a. Containment equipment for housing biological experiments in the mid-deck lockers on board the shuttle and Spacehab.

b. Technical services (integration of biological experiments with space hardware).

c. Launch integration services.

SHOT's space hardware is designed to contain living organisms for space experimentation. They have provided their equipment and services on several shuttle flights and concert 5 and 6 missions. The firm provided payload containment facilities for two successful shuttle missions: (1) chicken embryos experiment on STS-29 in March 1989, wherein Kentucky Fried Chicken, Inc. was involved and (2) organic separation experiment on STS-57 in June 1993. In the former mission they provided flight-certified hardware, that contained both a suspension system and an environmental control system for experimental sample protection and containment.

Typically, SHOT provides an enabling interface between the commercial end user (e.g., KFC, drug companies) and the NASA shuttle organization or Spacehab organization.

The firm has a new business thrust to develop new containment equipment for the drug companies to use for housing or packaging their experiments for the space environment.

Center for Cell Research, Penn State University
with Dr. Wesley Hymer. See Appendix C.3.14 . The Center for Cell Research (CCR) was established in 1987 as a part of NASA's Centers for the Commercial Development of Space program. CCR focuses on commercial product and process-oriented biotechnology projects in the areas of physiological testing, bioseparations and illumination.

Recently, as a spinoff from the CCR, Penn State has formed a private enterprise for the production and marketing of various automated systems for use in conducting both space-based and ground-based biological research.

The discussions essentially indicated that significant potential exists for biological product development in space, but currently no commercial market exists.

Currently, space-based biological production will be on the research and development level only. Any one user's needs would require only small payload weights to be placed in orbit on an intermittent basis. Dr. Hymer estimates that as many as ten bio payloads per year may be commercially sellable but would require some more work.

International government interest in space-based biotechnology is increasing; the Japanese have indicated keen interest in space biotechnology and several European consortia (university/industry/government) will be in place in 1994 to do space biotechnology as well.

Human interaction is not an absolute requirement for conducting space-based research. Ultimately space-based processing (e.g., electrophoresis) may require manned interaction for routine maintenance on on-orbit laboratories.

Allowable cost per flight is difficult to estimate since payload space on current STS flights is provided at no charge. It is evident that low-costs will be required ($50K to $100K per user) to develop the market.

In order for commercialization of biological products in space to occur, a concerted commercial venture must be undertaken to convince biological product firms of the potential profitability of space-based research and production and coalesce these firms into joint investment ventures to conduct research. CCR has this charter. Six biotechnological/pharmaceutical companies have already flown experiments in the last 3 years because of the CCR. Applications for the space research include the concept that space can be used as a testbed in the drug development process leading to new pharmaceuticals for use on Earth. There is a surprisingly large database that shows that rodents and astronauts experience bone loss, muscle atrophy, immune dysfunction, and so forth, all symptoms that mimic diseases on Earth.

Wisconsin Center for Space Automation and Robotics
with Dr. Ray Bula. See Appendix C.3.15 . The Wisconsin Center for Space Automation (WCSAR), formed in 1987, works in a variety of areas among that is space agriculture.

Commercial interest in space agriculture does not directly exist. Essentially, commercial industry is interested in controlled environment systems for plant growth on Earth. Development of systems for space research is applicable to terrestrial plant growth.

Ultimately, space-based agriculture may become a commercial market in the event of lunar colonization or manned orbiting factories, hotels, and so forth. Until such achievements are in place there appears to be no commercial interest in space agriculture.

Universities Space Research Association (USRA)-Washington, D.C.
with Beth Ransom and Rick Zwirnbaum. See Appendix C.3.16 . The researcher met with Beth Ransom and Rick Zwirnbaum, representatives of the Student Explorer Demonstration Initiative (STEDI) program, at the USRA offices in Washington, D.C., to discuss the academia space research market. Dr. Paul Coleman, USRA president, and Kevin Schmadel, assistant executive director, were not available for the meeting.

The objective of the STEDI program is to demonstrate that significant space flight missions can be performed for science and technology development at very affordable costs. USRA believes that if the STEDI program is successful that it will be able to establish a steady stream of dedicated space flights for research and development at universities, government laboratories, and commercial research centers.

Two important aspects of the program are (1) support limited duration projects (e.g., PhD research) and (2) significant hands-on participation by students and entry-level engineers and scientists. The program is sponsored by NASA. The USRA will select a range of university experiments in 1994 to be built, launched, and begin mission operations, flying three polar LEO space flights beginning in 1996.

The science objective is to select small payloads that are designed to conduct research in space-related scientific disciplines (e.g., astrophysics, earth sciences, life and biomedical sciences and applications, microgravity sciences, and space physics).

Approximately $8 million per flight is planned for payload (up to 450 lb) and launch vehicle. The cost for each flight is split evenly between payload and small expendable launch vehicle (SELV), that is, $4 million for the payload and $4 million or less for the SELV. The cost per pound of payload is equivalent to approximately $9,000/lb, assuming 450 lb to 100 nmi orbit at a 90-degree inclination. The multiservice launch vehicle (MSLV) has been identified as the expendable launch vehicle.

Mr. Dan Goldin, NASA administrator, supports the program. USRA estimates that a total of $24 million is needed to complete the initial phase of the STEDI program. Launch dates for the three flights begin in 1996. If the initial phase of the program is successful, then NASA would continue to support the program, leading to a robust academic research program with a buildup of up to 25 space research flights per year. An estimate of the initial and follow-on phase launches is forecast in figure

Figure STEDI Program Launches

USRA is a nonprofit organization that consists of approximately 76 member universities. The association was established in 1969 by the National Academy of Sciences at the request of NASA. The objective of USRA is to provide a mechanism through which universities and other research institutions could cooperate with each other, with the U.S. government, and with public and private organizations to further space science and technology. The association operates a number of institutes, divisions, and programs throughout the U.S. that sponsor exploratory research and aerospace education.

3.2.4 CSTS Needs and Attributes Transportation System Characteristics

In general, the potential users of the space manufacturing/processing system have expressed a strong preference for an airline-type operation with routine scheduled access-to-space operated as a commercial venture. Each payload must be precertified via adherence to predetermined commercial Federal space regulations, similar to the FAA regulations for aircraft, without individual government-controlled safety reviews.

The launch vehicle must provide a launch each 30 days, with late access of 12 hours for selected subunits of the total payload wherein inactive time delay would be critical to the integrity of the unprocessed products. The vehicle lift capability must be at least 4,500 lb to LEO at 98 degree inclination. This total payload mass to include 3,000 lb of product and containment support modules and also the 1,500 lb recovery module, which provides the controlled on-orbit maneuver and rendezvous functions for delivery to the orbiting service module.

The delivery of payload to the preferred sun-synchronous orbit at high inclination will require highly reliable launch operation timelines, highly accurate guidance, and staging and precision range-tracking instrumentation.

The customer base for the space manufacturing/processing system is envisioned to be from nonaerospace industry, such as semiconductor materials manufacturers, biotechnology, and pharmaceutical manufacturing/processing companies. The launch system company, therefore, must provide a full-service capability both before and after launch and will probably encourage the significant involvement of space-experienced value-added companies as primary interface agencies.

To accommodate the routine launch on a 30-day cycle of 3,000 lb of unprocessed payload comprising possibly 20 to 30 subunits of individual product/containment modules will require a significant scheduling, multimanifesting, and interface effort. A significant team of dedicated staff will be required to achieve this previously unprecedented tasking involving sustaining engineering, planning, and program management.

Prelaunch payload processing facilities will require careful planning to accommodate the necessary timely support to multiple subunits of the total payload. Commonality of product processing and containment modules will be an essential feature to support the relatively short preparation cycles for individual integrated payloads.

Preparation of the recovery module to be carried with each flight will commence following each return flight containing processed products. A refurbishment facility will be dedicated to this task and should probably be located at the actual launch site. Postflight payload storage and holding facilities will be needed located at the fixed recovery landing site. This facility will enable the tasks of both dismantling the composite processed product and containment modules from the recovery module carrier and subsequently storing of each module within suitable environmentally controlled enclosures prior to customer pickup.

The entire emphasis of the space manufacturing/processing system will be to provide regularly scheduled, service-oriented access to microgravity space with minimum bureaucracy, maximum throughput efficiency, and minimum cost. Elasticity of Demand

Commercial demand for space manufacturing/processing currently exists only as a supporting interest participating in shuttle-hosted flights committed to microgravity processing. A significant commercial demand for regular access-to-space to process raw materials for the creation of products to sustain a viable commercial market simply does not exist at the present time. Commercial companies, with interest in the use of microgravity processing facilities, have for some time (8 years or so) obtained access at zero flight cost through the NASA sponsored and funded CCDSs. This zero cost transportation access as provided by NASA is, of course, impossible to match in price with any commercial access-to-space system.

Spacehab is the only operational commercially developed system currently available to support microgravity processing. The cost of such access equates to about $30,000/lb based on a 60-lb locker priced at about $1.8 million for a 10 to 12 day duration on orbit with a lead preparation time of about 18 to 24 months. Revisit periodicity had previously been planned for two Spacehab flights per year, but recent Congressional budget cuts have reduced this to only one flight per year.

It is believed that to date NASA has rented all available locker space for the second and third missions with no individual U.S. commercial reservations. This arrangement has been described as an "anchor tenancy," which ensures that the commercial developers of Spacehab (Spacehab Inc.) will be able to recover the construction costs of flight modules.

The issue of elasticity concerning price versus demand has therefore been estimated based on the assumption that the near-term experimental flights dedicated to microgravity processing will lead to technology breakthroughs. Furthermore, it has been assumed that these breakthroughs will receive appropriate publicity and therefore stimulate commercial interest in this activity. Products will be subsequently created that will have significant commercial potential and therefore will provide a commercial business incentive.

Current prices for access-to-space vary considerably depending on the approach used. The shuttle-based GASs intended as standalone, self-contained canisters cost about $10,000/canister. For a shuttle flight with about 40,000 lb capacity and price quoted as $400 million to $650 million per flight, the effective cost would be between $10,000/lb and $16,250/lb.

The Spacehab vehicle, operating as a shuttle annex, is priced at $30,000/lb. This price is understood to include markup intended to recover the commercial cost of vehicle development. The CCDSs managed COMET free-flyer program (currently in development) quotes a price of $32 million per flight, which involves about 300 lb of experiments and is therefore $100K/lb. This higher price, however, provides up to 30 days of microgravity environment exposure. As stated previously, the access cost to space is priced at zero cost for experimenters seeking access through the CCDSs.

The space manufacturing/processing system discussed within this report (sec. has been evaluated on the basis of determining what price must be charged to users in order to recover the investment needed to develop, produce, and replace usable assets and operate a suitable system at a commercial profit.

These prices range from a maximum of about $25.3K/lb to a minimum of $6.2K/lb depending on annual flight rates and investment strategies, which include government/industry cost-sharing schemes (see summary fig.

The actual stimulation of demand in the long term is perhaps more a function of service than of price. The space manufacturing/processing system as discussed herein is specifically designed to incorporate those elements of service and capability, advised to the CSTS researchers, as being essential to support commercial utilization. Discussions with potential users has established a guide to elasticity of demand, as shown in figure

Figure Elasticity of Demand

The high probability curve demonstrates that for current price ($30,000/lb) as available from the Spacehab module commercial demand is practically zero to unity. Reduction to 25% range would stimulate perhaps a factor of 2 increase in demand.

Further reduction to 10% of current prices would yield a factor of between 5 and 6 increase in demand. A reduction in price in the range of two orders of magnitude (i.e., $300/lb) would increase demand by a factor of between 10 and 20. The net effect is therefore a nonelastic market. That is, the differential reduction in price exceeds the differential increase in demand, at reasonable economic prices (e.g., greater than $1,000/lb) which results in an elasticity of less than unity.

The projected flight rates for the space manufacturing/processing market have been estimated based on the assumption of continuing government-sponsored/funded experimental activities, technology breakthroughs, and the future availability of a service-oriented system with capabilities and operating characteristics as suggested by CSTS research contacts.

A highest probability baseline rate of 12 flights per year at about $1000/lb has been predicted to correspond to the requested minimum 30-day on-orbit duration. A slow growth has been assumed out to about 7 years following initial operating capability as being a conservative increase in utilization. This low-cost access is probably not achievable, even with government investment, if the launch company must assume replacement costs for the assets with limited lifetime, that is, the orbital service modules and the recovery modules.

The minimum projected cost for access that includes replacement of these assets has been evaluated as about $6000/lb. The high probability rate of 6 to 8 flights/year at current prices is a projection derived from commercial utilization stimulated by technology breakthroughs as potentially possible from the ensuring experimental programs but with demand bounded by relatively high-cost access.

Low probability rates are very unlikely to be realized in practice but have been estimated based on conservative upwards scaling of the higher probability cases.

The overall flight rates shown within the composite mission models demonstrate the potential impact on this specifically designed space manufacturing/processing system that a space business park may have, that is, certain users may prefer to utilize the latter manned facility perhaps for activities involving living organisms or animals or for activities that are less predictable than routine production processes.

It should be noted, however, that the threshold access cost to stimulate significant space business park activity is around $500/lb, which may well require application of leapfrog technology such as is predicted for a reusable transportation system. In that case, the same technology could be applied as the launch service element and the recovery carrier for the autonomous space manufacturing/processing system, thereby considerably modifying the effective access cost for this system also.

3.2.5 Confirmation of Market Opportunity

The field research reports that provided much of the database for this report were individually reviewed with the interviewed personnel from the organizations visited during the study. Amendments and corrections were incorporated such that the final versions of each report were confirmed as a faithful and true record of the responses obtained from the CSTS questions and subject discussions.

The primary sources contacted for the Space Manufacturing/Processing segment of the CSTS included the following list of organizations and individuals.

John Cassanto, President
Ulises (Al) Alvarado, Sys. Eng. Mgr.
Instrumentation Technology Associates (ITA)
Exton, PA 19341
Louis Hemmerdinger
Dr. David Larson
Grant Hedrick
Grumman Corporation
Bethpage, Long Island, NY 11714
Dr. Hardy W. Chan, VP
and Director of Biotechnology
Dr. Randolph M. Johnson
Syntex Discovery Research
Palo Alto, CA 94303
Dr. William Wilcox, Center Director
Mark Pasch, Dir., Technology Dev.
Prof. Liya Regel
Consortium for Commercial Crystal Growth
Clarkson University
Potsdam, NY 13699-5700
Chuck Rudiger
Lockheed Missiles & Space Company, Inc.
Sunnyvale, CA 94088
John Vellinger, Vice President
Space Hardware Optimization Technology (SHOT)
Floyd Knobs, IN 47119
Dr. Javier de Luis, President
Dr. Anthony Arrott
Payload Systems, Inc.
Cambridge, MA 02142
Al Reeser, President and CEO
David Rossi, V.P. - Bus. Development
Spacehab Incorporated
Arlington, VA 22202
Dr. Wesley Hymer, Director
Center for Cell Research
Penn State University
University Park, PA 16802-6005
Dr. Charles Bugg, Director
University of Alabama - Birmingham
Birmingham, AL 35294-0005
Dr. Steve Schwartzkopf
Manager: Life Sciences & Biotechnology
Lockheed Missiles & Space Company, Inc.
Sunnyvale, CA 94088
Dr. Ray Bula
Wisconsin Center for Space Automation
and Robotics (WCSAR)
University of Wisconsin
Madison, WI 53706
Dr. Alex Ignatiev, Director
Space Vacuum Epitaxy Center
Houston, TX 77204-5507
Ole Smistad, COMET Program Mgr.
Space Industries
League City, TX 77573
Dr. Charles Lundquist, Director
University of Alabama - Huntsville
Huntsville, AL 35899
John Lloyd, ACRV Program Mgr.
Sam Housten, ACRV CSE
Lockheed Missiles & Space Company, Inc.
Sunnyvale, CA 94088

3.2.6 Conclusions and Recommendations

The private sector has not yet endorsed space manufacturing and processing as a viable commercial business venture, at least not in the near term.

The potential advantages of processing materials and products in a microgravity environment are apparently not well publicized by the relatively few companies and university centers currently involved in experimental activities.

Practical demonstration of useful, real, space-produced products has not yet occurred on a scale of significant magnitude to attract commercial interest.

The current NASA virtual monopoly of providing shuttle-hosted zero cost access to an orbital microgravity environment, through the CCDSs, is commendable in principle for the support of limited experimental-based opportunities.

This shuttle-based approach, however, with government ownership and operation of the access-to-space transportation and microgravity processing system, is fundamentally incompatible with private sector commercial business practices. The system is apparently excessively burdened with time-consuming bureaucratic procedures, provides less than desired on-orbit time duration and process-related electrical power, provides inconveniently long leadtimes between repeat flights and between planned intent and realization of a given flight, is subject to schedule delays and manifest priority changes, and provides a training burden and local microgravity disturbance potential due to the constant presence of crew.

The private sector development of the Spacehab equipment has been a commendable and promising first step towards commercialization of the provision of microgravity processing facilities., however,, the commercially acceptable price threshold for general use of this facility appears to be more than commercial industries are willing to pay. It seems reasonable to suppose, however, that the apparent reluctance of commercial customers to use the facility is also dependent on the current access system characteristics as described above, since Spacehab is flown as a shuttle annex.

The free-flyer COMET program concept for microgravity processing access appears to be a step in the right direction to address at least some of the concerns associated with the current STS-based system., however,, this new system still appears to continue the principle of government ownership and operation and appears to be designed and managed as a research asset rather than a commercial venture. In addition, this system also appears to offer a very high price for access at about a factor of 3 above Spacehab with therefore pessimistic prospects for stimulating commercial use.

The elasticity of demand for the space manufacturing/processing market has been estimated based on responses derived from direct interface with potential users and is shown in figure Current access price for commercial customers is either zero (via CCDSs), $30,000/lb (Spacehab), or proposed as $100,000/lb (COMET).

A cost value corresponding to Spacehab was taken as a baseline for potential customer use discussions. It was found that commercial demand would probably become finite if the cost of access was reduced by 50%. Reduction to 25% of the baseline price would result in a factor of 4 increase in demand. Further reduction by an order of magnitude indicated an increase in demand of less than tenfold. A dramatic reduction in price by two orders of magnitude indicated an increase in demand by a factor of between 10 and 20. The net result indicated was that the differential reduction in price exceeded the corresponding differential increase in demand, therefore demonstrating an elasticity of demand of less than unity.

This finding indicates an unfavorable business proposition with respect to space manufacturing/processing, that is, although a decrease in access cost would stimulate increased demand, the revenue obtainable by the system provider from this demand would be insufficient to cover the cost of providing the means to satisfy the demand.

The business analysis of section, for a space manufacturing/processing system designed specifically to contain all the required attributes indicated by the CSTS research study, should also be noted. A rough order of magnitude evaluation was carried out with various funding profiles, investment cost-sharing schemes between government and industry, and also various flight profiles for 10 years of system operation following initial operational capability. This analysis is summarized in figure Categories D, D1, and D2 are defined in appendix C.2.

This business analysis indicates that the estimated price for access, designed to achieve a reasonable rate of return for the required high-risk investment, in a dedicated "preferred concept" space manufacturing/processing system, is unlikely to attract commercial users.

Development and operation of such a system funded by the private sector alone is not sustainable. With industry and government contributing an equal share in the upfront R&D investment, the business viability would still be highly uncertain, even though the price for access would reduce by about 40%. Consider the perhaps-unrealistic scenario of the government providing 100% of the upfront R&D costs, but with industry funding the replacement of limited life assets. In this case the minimum necessary access price needed to be charged to profitably operate in this service business is not less than $6,000/lb.

This figure is < 60% of the STS cost and < 20% of the typical current commercial access cost. To realize the earlier projection of stimulating a new industrial base, with inherent reliance on space manufacturing/processing, the government investment in the system will need to be more innovative.

It should be noted, however, that the user "value for price" projected for the dedicated "preferred" space manufacturing/processing system is considerably higher when compared with access systems in current use, that is, cost comparison should also be considered with schedule compliance, extended orbit duration, enhanced available processing electrical power, routine nonbureaucratic service, and so forth.

These additional benefits may stimulate more commercial interest even though the price charged for access still appears to be high. The combination of these analyses indicates that in 1994 investment in a space manufacturing/processing system may not be a sound business proposition. The situation could change, however, pending dramatic results potentially achievable through the ongoing NASA-sponsored research experimental effort.


The government should maintain a vigorous support of providing access-to-space for microgravity research and development using the shuttle. A little less bureaucracy would also go a long way. Even though the STS system has certain limitations, it does provide a means of support to accelerate the possibility of technology breakthroughs. These breakthroughs are key to the stimulation of greater commercial interest.

The issues of required commercial proprietary control over experimental results balanced with the needed wider dissemination of knowledge gained from experimental work needs to be addressed. Simultaneous resolution of these issues is naturally difficult to achieve; however, denial of the former and absence of the latter are perhaps a further key to the current lack of commercial involvement on a significant scale.

Stimulation of commercial ownership and operation of the access-to-space system should be addressed. Numerous respondents to the CSTS research emphasized this point. Innovative investment options need to be considered, certainly with emphasis on the concept that government investment support in a potentially wide-ranging commercial enterprise could well be cost effective with reference to stimulation of the GNP and future employment.

Serious consideration should be given to the concept of an unmanned, automated space manufacturing/processing system. The characteristics of at least one possible system, as described in this report, were derived via direct feedback from potential users. In short, the optimum way to stimulate the interest and involvement of commercial users is to listen to their needs and, if feasible, provide them.

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3.2 Space Manufacturing
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