One theme of the NewSpace 2016 conference, held this week in Seattle, was that a functioning space economy is tantalizingly close. The 700 or so conference goers were repeatedly told that Earth-observing satellite constellations, improved asteroid monitoring, commercially-run space stations, space hotels, and reusable rockets will all become available in the near future. The conference made clear science fiction is coming to fruition, but it was also evidence that another concept largely regarded as fiction applies to the space industry: trickle-down economics.

Jeff Bezos, center, celebrates with his Blue Origin team after the company's rocket successfully launched and landed itself unscathed. Bezos and other billionaires are bankrolling numerous space-oriented companies.

Jeff Bezos, center, celebrates with his Blue Origin team after the company’s rocket successfully launched and landed itself unscathed. Bezos and other billionaires are bankrolling numerous space-oriented companies. Photo courtesy Blue Origin.

The “new space” industry, so dubbed because it will rely on commercial forces rather than government entities, is nonetheless reliant on enormous financial contributions from a few enormously wealthy people. SpaceX and Kent’s Blue Origin are the playthings of billionaires Elon Musk and Jeff Bezos. Vulcan Aerospace was founded by Paul Allen. Charles Simonyi, who built Microsoft Office for Allen, is one backer of Redmond-based Planetary Resources; he’s joined by Google founders Larry Page and Eric Schmidt as well as director and explorer James Cameron.

“I’ve heard Jeff (Bezos) speak and talk about what drove his passion, which was being 5 years old and watching the moon landing,” Rob Meyerson, president of Blue Origin, said during a panel of Seattle-area executives at the conference. “It’s inspiring. It’s something that sticks with you, and so if you do have the resources to do something like that later in life — that’s why he founded Blue Origin.”

Billionaires creating jobs and investing in innovation is precisely what President Ronald Reagan had in mind when he pitched his trickle-down policies that cut taxes for the wealthy. The theory was that America’s richest people would use their tax savings to reinvest in companies, hire more people, and develop new technologies.

That, we now know, is not what happened. Since Reagan’s time, the vast majority of new wealth has been funneled to the wealthiest people, causing incomes to stagnate or decrease for American workers. By and large, the money isn’t trickling down from wealthy to poor; it’s being pumped uphill in the reverse order.

Trickle-down’s biggest flaw may be that its logic is based on an antiquated notion of innovation. The tycoons who created incredible amounts of jobs — Ford, Carnegie, Rockefeller — were the ones who made significant breakthroughs in niche or brand-new industries. Henry Ford and his systems put millions of Americans to work building automobiles for decades, not just for Ford but for competitors who adopted its practices.

But when markets and companies mature, they become leaner. Good-paying jobs are shipped overseas or automated to cut costs, the rewards of which are reaped by executives, not the unemployed. One reason trickle-down policies have failed is because, since Reagan’s time, there have been no major technological breakthroughs to the level of the automobile, airplane, or oil refinery. That will change if we all start going to space.

Think of the early days of Ford and General Motors. There was no highway system, no standardized engine types or fuels, and no special-made vehicles for certain industries. These companies had to employ a lot of people to try a lot of things. Some endeavors failed, but employees still gained paychecks as well as skills that were transferable to the companies that did succeed.

The same thing could soon happen in space. It’s too early to tell if Bezos or Musk or Allen has the best idea of how to monetize space, but they’re all trying, and are together building a brand-new industry.

Without government assistance (of which there is still plenty in space, though NASA’s footprint is shrinking), tycoons are necessary. Gambling in new industries is expensive, and deep pockets are needed to absorb the blow of exploded rockets, busted satellites, and the myriad other failed projects that await these companies.

“It’s a lot like philanthropy,” said Jason Andrews, CEO of Seattle-based Spaceflight Industries, which offers a sort of ride-sharing service for satellites. “If it wasn’t for these investors with their 10-or-longer year returns — I mean, mining asteroids. I’m all for what they’re doing at Planetary Resources, but that’s a super-long-term business plan.”

The technologies these billionaires fund also will trickle down from space to Earth. Planetary Resources, for instance, is partnering with Bayer to deploy a satellite constellation that will monitor, among other things, water and resource usage for agricultural clients. The company’s Ceres satellites will use the same technology it plans to use to locate precious minerals on asteroids.

It’s this early diversity of approaches that’s also promising. The SpaceX-Blue Origin reusable-rocket commands the most media attention, but the fledgling space industry is branching out into numerous tendrils.

Planetary Resources CEO Chris Lewicki said this allows the current flock of space companies to work, to a degree, harmoniously. He hypothesized that tourism would be the first industry to take hold in space. “Today, it’s the International Space Station, but tomorrow it might be Hotel Inn and Suites, zero-G variety,” he told me. “There are a lot of economies on earth that are built around (the tourism) model. But there are all sorts of things that are needed to support that primary business. That’s usually not the only business in town.”