Outer space is the newest investment frontier, and the lure of a virgin market has started a “space race” to commercialize it. New technology is helping to reduce rocket launch costs and is making satellite deployment more efficient. The sky is no longer the limit for disruptive innovation. This year SpaceX will launch the world’s most powerful rocket, the Falcon Heavy, into low Earth orbit at a fraction of the cost of previous launches. At $83 million for a payload of 53,000 kg, the Falcon Heavy has a cost of roughly $1,600 per kg (~ $700 / lb). By comparison, traditional launch costs exceed $10,000 per kg (~$4,500 / lb). 
SpaceX achieves lower overall launch costs by reducing operating costs and increasing in-flight efficiency. The Falcon Heavy carries more payload and is lighter than any other rocket in existence today. Its rocket engines are similar to the SpaceX Falcon 9, allowing reuse of common components. Its engines have more thrust and less mass than traditional engines, resulting in greater fuel efficiency.
In addition to declining launch costs, cheaper and lighter payload satellites are accelerating commercial development in space. Advanced software technology is enabling the creation of smaller, more accurate satellite cameras. Skybox Imaging, for example, produces high-tech satellites weighing approximately 100 kg, twenty times lighter than traditional satellites. Lighter satellites are cheaper to produce and launch. Estimates are that a Skybox satellite can be built and launched into orbit for less than $50 million, a fraction of the $250- $500 million for current competitors.
Google [GOOG] recently acquired Skybox for $500 million. It plans to use the satellite technology to expand its global Internet presence. AT&T [T] also recently announced a $48.5 billion deal to purchase DirecTV [DTV]. These deals demonstrate the growing importance of the commercial space market.
Satellites allow businesses to access real-time images of enterprise activities around the planet. Examples are monitoring trade activity, national borders, and even exhaust emissions. The potential productivity gains could be quite significant.
Space exploration is getting cheaper, allowing spacecraft to industrialize the earth’s atmosphere. As the barriers to entry diminish, companies like SpaceX and Skybox continue to innovate and disrupt the industrial world as we know it. Like outer space itself, the opportunities are boundless.