Last Friday, the Financial Times ran a column entitled “Leading businesses are often born in the worst times.” In it, technology columnist John Thornhill describes an upsurge in entrepreneurship emerging from the dark pandemic period, a surge in the formation of new businesses, and “a new wave of entrepreneurs intent on building careers outside the corporate world.” The column notes how entrepreneurs tend to thrive on the type of volatility created by the pandemic.

This view parallels what I have observed and upon which I have opined.* Entrepreneurial thinking is particularly important today given the immense challenges we face, such as climate change, and the limitless opportunities created by new technologies like artificial intelligence and machine learning. Fortunately, research shows that today’s young adults have a particularly strong entrepreneurial bent, attracted by factors such as the declining cost of technology and starting a business, along with easier availability of capital and information.

Moreover, I believe that innovation born of entrepreneurship is particularly vital today given demographic trends. Stagnant growth in the labor force implies that economic growth (and income growth and market performance) will increasingly depend on the type of productivity growth stemming from innovation and technical progress. Back in the 1940s, the great Austrian economist Joseph Schumpeter described how innovation and entrepreneurship were the sparks for productivity growth. He coined the term “creative destruction” to describe a process that “incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.”

Space Mission

In my investing, I look for just such disruptive innovators on a global scale. Typically, these are mission-driven entrepreneurs with large, transformative ideas who reimagine or even create whole new industries through their innovation and long-term investments. An exciting current example of this process is the entrepreneur-led development of the space industry, often labeled “the last frontier.” Serial entrepreneur Elon Musk, with his SpaceX venture, attracts much of the space industry publicity, but in fact there are an expanding number of entrepreneurs who are active in space.

I recently had the good fortune to sit down for a Q Factor episode with Dylan Taylor, a pioneering investor in what’s being called “new space”—the privately financed, 21st century re-invention of what it means to explore and invest in space. Taylor, who himself thinks big, believes that space is “the next big thing for humanity” and allows us to “re-imagine what humanity is and could be.”

In fact, the economics of space are already changing dramatically due to technological innovations such as reusable rockets and fuel sources. Taylor estimates that launch costs have fallen 100-fold, which helps to explain why about 5,000 satellites will be launched this year compared to a cumulative total of 1,500 in all prior years. He notes that most of the advances are being driven by small entrepreneurial-led companies rather than the aerospace giants. Space entrepreneurs, Taylor says, tend to be driven by a larger purpose than just money; they are people who “are going to walk through a brick wall to make something happen.”

Clearly, a revolution is taking place in space, yet we are in the early innings of development of what seems destined to become a new trillion-dollar industry. It may sound like science fiction, but within 20 years Taylor foresees humans on Mars and in the atmosphere of Venus, along with permanent human establishments on the moon.

As for me, when I was growing up, akin to so many American kids, I dreamt of being an astronaut. That never happened, so I satisfied my curiosity about space by visiting planetariums and watching space shows such as Neil deGrasse’s Cosmos: A Spacetime Odyssey on television. Little did I know that someday I, too, would be involved in the exploration and development of space (as I am now) as an investor.

To learn more about the exciting growth industry of space, I invite you to listen my Q Factor podcast: Dylan Taylor: Investing in Outer Space.

*See, for example, Prime Time for Entrepreneurs

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