1. AST’s Research Roadmap On the web at www.coe-cst.org under the “Publications” tab.

2. COMMERCIAL SPACE INDUSTRY ANALYSES & STUDIES 2

3. CLAYTON CHRISTENSEN ON THE ROLE OF DATA AND THEORY IN STRATEGY AND INNOVATION 3

4. 4 “Strategy and innovation are somewhere between unguided trial-and-error experimentation and rules-based science.”

5. 5 “We train managers and do research about management [with] the belief that decisions should be grounded in solid analysis of data.” [Data-based analyses] “rely on an implicit theory: The past is a good predictor of the future.”

6. 6 “The game is changing, meaning what was successful in the past would no longer guarantee success in the future.”

7. 7 “The level of one's insight is not strictly a function of the level of one's access to unique or proprietary information.” “Armed with the right concepts, anyone can produce insights that surpass those of analysts who are knee-deep in industry minutiae.”

8. 8 “The only way to look into the future is to use these sorts of theories, because conclusive data is only available about the past.” “Good theory provides a robust way to understand important developments, even when data is limited.”

9. 9 “Theory is even more helpful when there is an abundance of data.” “With more information available, it is harder to discern what information really matters.” “Theory helps to block out the noise and to amplify the signal.”

10. 10 “Many people who make their livings providing advice about the future express deep skepticism about theory-based prognostication.”

11. COMMERCIAL SPACE INDUSTRY ANALYSES & STUDIES 11

12. Targeted Barriers of Entry Capability Demonstration Technology Development licensed to NASAResearchersTechnologies IP Entrepreneur employs owned by leading to with royalties to who develop Customers & Profits Venture Capitalists Angels Start-up Company A Growing Company providing initial funds for attracting running the providing next level of funding for if successful, becoming ROI A $20M Company IPO, M&A seeking start- up funds from helping grow the if Round B-C successful, becoming if enough, leading to selling the sold by for the Goods & Services producing USG Agencies working with permitting to the if initial success, seeking more funds from

13. Epistemology Industry Modeling & Strategic Planning Economics & Finance Management & Consulting Political Science & Policy

14. Epistemology The Usefulness of Models (Taleb) Increases Understanding Easier to Remember Simplifies by Necessity 3 Types of Scientific Literature (Kuhn) Journal Articles Text Books Popularizations Evolution of Scientific Investigation (Johnson) Joseph Priestley vs. Antoine Lavoissier Definition: The Nature, Scope, Limitations of Knowledge.

15. Political Science & Policy Commercial Development Policy History. (Hart) “U.S. policymakers, particularly at the state and local levels, have been groping toward an explicit entrepreneurship policy for at least a couple of decades. Their experiments have typically been pragmatic, inspired by immediate needs and pressures and by one another's examples, rather than by a grand theoretical design.” Space Power Perspectives ISS (Cathedral) - Commercial Space (Common Bazaar). Policies Of Conflicting Interests (Hertzfeld) National Security vs. Commercial Space

16. Economics & Finance Finance Is The Practical Application Of Economics. Rationality of Markets Is Highly Debatable. Provides Important Perspectives On Industry. Lack Of Consensus Makes Decision-making Very Hard. “If You Put X Economists In A Room, You Get 2x Opinions.”

17. Management & Consulting BUSINESS CONSULTING INDUSTRY EMPLOYMENT LEVELS 1980 - 18,000 2005 - 180,000 (10x) MBA DEGREES EARNED 1968 - 18,000 1988 - 70,000 (3.9x) 2008 - 140,000 (2x) BIZ CONSULTING EMPLOYMENT OF NEW GRADUATES 25% MBAs @ Top Biz Schools 16% BAs @ Elite Universities WHAT IS MANAGEMENT CONSULTING? NOT a discipline. A collection of unsolved problems and hidden agendas. Asking the right questions is more important than finding the right answers. Issues temporarily placated, not resolved. Offers (pretended technological) solutions to what are moral and political problems. MBA: TRAINING vs. EDUCATION Emphasis on technique, not theory In formal evaluations, those without MBAs performed better than those with MBAs. ◄Porter & McKibbin [1988]: “Key managers pay little or no attention to [academic business] research or its findings.” THE BOTTOM LINE USG needs to be “smart buyers” of mgt consulting services.

18. Industry Frameworks, Structures Industry Structural Analysis (Porter) Disruption Innovation Theory (Christensen) Game Theory Value Net (Brandenburger & Nalebuff) Diffusion of Innovations (Rogers) 10 Schools of Strategic Mgt (Mintzberg) Industry Frameworks, Structures Industry Structural Analysis (Porter) Disruption Innovation Theory (Christensen) Game Theory Value Net (Brandenburger & Nalebuff) Diffusion of Innovations (Rogers) 10 Schools of Strategic Mgt (Mintzberg) Industry Modeling & Strategic Planning

19. Need for Commercial Space Industry Analyses & Studies Policy tends to by “pragmatic, inspired by immediate needs and pressures and by one another's examples, rather than by a grand theoretical design.” - David Hart, "The Emergence of Entrepreneurship Policy" USG Space Policy and Acquisition Strategy Regarding Commercial Space Industry… Currently Relies Heavily Upon Personal Experience and Data-Based Studies & Methodologies Could Benefit from Theory-Based Analyses & Structures Approach: Make Use All Analytical Options To Provide More Nuanced Perspectives to Support Decision-Makers Goals: Strategic Development of CST Industry Policy & Acquisition 19

20. Scope of Commercial Space Industry Analyses & Studies Accounting Economics Finance Human Resources Management (Strategic ~) Marketing Operations Multiple-Disciplinary Other General Business Information Technology Insurance International Business Law Real Estate and Urban Land Economics Risk Management Work and Organizations 20

21. Recent Work NASA, FAA & Other USG Reports 1997 Commercial Space Transportation Study 2002 DoC OSC Space Market Opportunities 2003 ASCENT Study performed by Futron Corporation (D. Webber) funded by NASA MSFC 2008 2nd NGEC Entrepreneurial Opportunity in Lunar Development 2008 Oxford Analytical "Understanding the Space Economy" 2010 FAA Commercial Human Spaceflight Workshop 2010 Near Earth LLC “Supporting Commercial Space Development” 2011 NASA Commercial Space Transportation Market Assessment Report FAA Launch Forecast Reports (Annual) FAA Economic Impact Reports (Biannual) US Industry, State, Academic, & Int'l Reports 2008 Tauri Report for PSF 2009 Toffler B&W Paper 2010 Paper: Measuring the Impact of Space Tourism Activities 2011 Tauri Report to Space Florida: Reusable Suborbital Market Characterization 2011 MD The Business of Space Science OECD Space Economy at a Glance Reports (2007, 2011) “Enabling Complementary Commercial and Government Enterprises In Space” by Dr. M. Griffin presented at the 2011 IAC. 21

22. Current Theory-Based Studies 22 Commercial Space Market Disruption Innovation Theory (Christensen) Industry Structural Analysis (Porter) Suborbital Vehicles "Suborbital Market Overview And Application Of Disruption Theory" by K. Davidian, 2010 IAC. COMING SOON: “Suborbital Research Market Industry Structural Analysis" by K. Davidian and C. Conrad. Orbital Launch Vehicles (Cargo & Crewed) "Disruptive Innovation Theory Applied to Commercial Cargo and Crew Space Transportation Markets" by K. Davidian, J. Foust, D. Kaiser and I. Christiansen, 2011 IAC. "An Industry Structural Analysis and Strategy Insights for the Commercial Crew Transportation Industry" by D. Kaiser, I. Christiansen, J. Foust and K. Davidian, AIAA Space 2011. On-Orbit Spacecraft "Applying Disruption Innovation Theory in Emerging Markets for Crew On-Orbit Transportation" by I. Christiansen, K. Davidian, D. Kaiser and J. Foust, AIAA Space 2011. "Industry Structural Analysis Of Commercial Crew To Orbit Sector" by B. Cheetham, 2010 IAC. "Strategic Evaluation Of Commercial Crew To Orbit Transportation Industry Structure And Status" by B. Cheetham, 2011 IAC. Nano-Sats “Market Characterization: Launch of Very-Small and Nano-Sized Payloads Enabled By New Launch Vehicles” by I. Christiansen, D. Vaccaro and D. Kaiser, 2010 IAC. Multi-Market "Are Commercial Space Transportation Industries Emerging?" by K. Davidian, J. Foust, D. Kaiser and I. Christiansen, 2011 IAC. Next Steps: Application of Game Theory Frameworks, Application of “Diffusion of Innovations” Research

23. Summary Current Portfolio of Industry Analyses are Heavily Data-Based Addition of Theory-Based Analyses With Data-Based Studies Can Paint a More Nuanced Picture Ultimate Goal is Better Space Policy and Acquisition Strategy Decisions 23

24. BACK-UP SLIDES 24

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