How to cash in on the space race

America launched a “top-secret robotic space bomber” last week, according to some news stories. Other reports on the X-37B, a low-orbit space shuttle, are a bit less excitable. But whatever its purpose, I think we can agree that it has lost any element of secrecy.

The space plane, developed by a partnership of Boeing and the US military, has apparently caused consternation among the likes of Iran, who fear it might be used as a weapon. This follows comments from leading military strategists in China and America who claim that space will be a theatre of war in the future.

But there’s a lot more to the space industry than just another arms race. China, Japan and India are all growing their space programmes, with satellites and related infrastructure currently accounting for 67% of the $257bn global space industry. Over the next decade that figure is set to grow rapidly as more than a thousand new satellites are built and launched.

And another exciting step for the industry came last week when Barack Obama announced that the private sector would take over responsibility for shuttling supplies to the International Space Station from the space agency Nasa. Contracts have already been signed for firms to develop the rockets while Nasa is focusing on more distant targets such as Mars.

The plan drew plenty of criticism, but the idea is that it will act as a catalyst. Firms will be given access to experience and expertise which they can then apply to commercial space ventures, and the introduction of competition should drive down costs.

Projects range from solar panels in space to a hotel. Many of these ideas are, frankly, too flaky or at too early a stage for investors to risk their money on. But there are more solid ways to play the developing space industry – right now in fact, I’m looking into one promising ‘picks and shovels’ play on space. I’ll tell you all about it in the next issue of MoneyWeek magazine, out on Friday. (If you’re not already a subscriber, you can claim your first three issues free here.)