Developing Institutions for the New Space Race: Examining the Privatization of Space Exploration and Its Implications for International Business

Developing Institutions for the New Space Race: Examining the Privatization of Space Exploration and Its Implications for International Business

Luis Alfonso Dau (Northeastern University, USA), Elizabeth M. Moore (Northeastern University, USA), James Arie Figgins (Northeastern University, USA) and Julián Martínez-Rincón (Stanford University, USA)
DOI: 10.4018/978-1-5225-7561-0.ch006
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This chapter examines the dynamic of the major actors in today's new space race. The initial space race featured nation-states as the primary actors. However, the current space race has undergone privatization and now features corporations as additional key players, along with developing nations. The result is the semi-private commoditization of a public good that crosses through different hemispheres, as well as competition between actors from both the firm and state level. Building on world systems theory and institutional theory, this chapter argues that the privatization of space exploration mandates the construction of inter-hemispheric institutional frameworks that apply globally. A descriptive case study that juxtaposes India and SpaceX offers foundational insight into how inter-hemispheric institutions are created. Given the challenging parity between state sovereignty and global consensus and its influence on firm behavior, this chapter proposes an exploratory examination of the processes and strategic choices behind inter-hemispherization to incite future scholarship.
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As the world continues to globalize, there is a constant race for resources (Mahtaney, 2013; Porter, 2003). All actors (e.g., individuals, governments and corporations) are in a competition for the small volume of remaining resources, while simultaneously searching for new ones (Boulhol, De Serres, & Molnar, 2008; Kwon, 2012). Considering the limited amount of remaining natural resources, there has been an increasing attention on planets other than earth (Devezas et al., 2012). Moreover, there has been an increasing curiosity amongst scientists, governments, firms and individuals on space and inter-hemispheric travel (Berryman, 2002; Devezas et al., 2012). Whether for its mysterious uncertainty or for the potential that it holds in terms of societal advancement, there has been an increased effort to understand and explore the remainder of the solar system (Bainbridge, 2009; Ehrenfreund et al., 2012). In fact, it has been more than a century since individuals started using private funding to promote space exploration, even before significant government support (MacDonald, 2017). As the curiosity expands, so too does the need for a more nuanced understanding, from both a practitioner and academic perspective, of the consequences of the new space race (Devezas et al., 2012). From a historical perspective, the space race was a surrogate war between states, built on the premise of a primary payoff of national prestige for nations that were able to reach other planets (Berryman, 2002; Brown, 2011). Today, however, the space race is increasingly privatized, as corporations have become key players (Burnett, 1997; Reibaldi & Grimard, 2015). The result is a new dynamic and a potential institutional void. Thus, it is critical to parse out the impacts of the new race on both the private companies involved, as well as the states.

The new space race, like having the world’s tallest building, is now a competition between developing countries and private companies (Devezas et al., 2012). Developing countries seek to demonstrate and advance their position and prestige in the world system (Ansdell, Ehrenfreund, & McKay, 2011; Shahrokhi & Harwell, 1989). It is important to note that these ‘competitions’ were established by the modern superpowers as demonstrations of their superiority through use of surrogate warfare (Brown, 2011). But, as developing states have entered the global competition for power, so too have western-born private corporations, in place of the developed countries they represent (Karlgaard, 2012; Musk & Pelley, 2012). This is not to suggest that developed countries do not have an interest in space exploration, but rather that they participate through funding and supporting private corporations from their respective nations (Reibaldi & Grimard, 2015). Thus, the privatization of the space race invites a new competitive dynamic between states and corporations with relative parity, rather than classic intra-state competition. As such, it is imperative that scholars understand the impact that this competition has on both sets of actors. Is it possible for governments to establish inter-hemispheric institutions? If so, what institutions would exist? If not, where will corporations involved find the institutional structures that guide behavior for firms as they enter space? Do western-born corporations possess an advantage from sharing a formative identity with the original space racers? The purpose of this chapter is to offer preliminary descriptive evidence into the institutional structures and frameworks that dictate how corporations behave, and further, what strategies they employ as they undertake the mission to enter the space race with developing nations. We argue that the semi-privatization of space mandates the need for the development of inter-hemispheric institutional frameworks. Thus, this chapter serves as an invitation to expand upon this burgeoning research program.

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