Association for Public Policy Analysis & Management

A thriving U.S. commercial space industrial base is a critical part of domestic national security policy. However, declining federal resources for investment creates a great challenge to advancing innovation in space. This means that defense investment must be strategically allocated in a way that ensures a thriving commercial space industrial base, which includes a better understanding of how rules and regulations could impact the commercial space ecosystem. This paper explores the case of regulation in the U.S. shipbuilding industry, as a potential analog for informing the appropriate approach to regulation in the U.S. aerospace industry. The U.S. shipbuilding industry is considered for its key similarities to U.S. aerospace, namely, a symbiotic relationship with the U.S. government, limited demand, and the nature of being high-tech, high expense investments. Yet U.S. shipbuilding today is shell of what it once was in terms of global competitiveness, having been subject to heavy piecemeal regulation of over the last hundred years. This research finds that, in thinking of commercial space as an ecosystem, the case of U.S. shipbuilding could have meaningful implications for how policymakers think about space regulation. Specifically, this research suggests that a disjoint regulatory approach which does not consider the entire space ecosystem could distort the level of potential investment and innovation, and therefore the vitality of the space industrial base.