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Remarks by U.S. Commerce Secretary Wilbur L. Ross at the Aerospace Industries Association Board of Governors Meeting

AS PREPARED FOR DELIVERY

Good morning, and thank you for the warm introduction. Today is an exciting time for aerospace industries in America.  The economy is strong.  Tax cuts and deregulation are maximizing business opportunities and creating jobs. And domestic manufacturing is growing at an unprecedented rate. 

 

Over the last year, U.S. manufacturing added well over 300,000 jobs, the most since 1995. Under the Trump Administration, America is open for business once again. And at the Department of Commerce, we’re always working to support U.S. industry.

 

Our toolkit is quite broad. Our work to help American enterprise reaches from the depths of the oceans to the vast frontiers of space. When I was sworn in as Secretary almost two years ago, I knew the Department had a broad portfolio.  From trade policy, to standards and technology, to the weather service and Census bureau — I knew we’d be pretty busy. But I must admit that even I was surprised by the amount of time dedicated to the FISH. 

 

In my first few months in office, I spent countless hours dealing with regional fish councils, environmental groups, fishermen, and the large fish lobby. You wouldn’t believe how much congressmen care about fish — sometimes I wonder if the fish can vote!

 

But in all seriousness, our team at Commerce does important work — from the seas to the skies — to help the American people. The recent efforts of Commerce’s National Oceanic and Atmospheric Administration are a good example. This past summer, during Hurricane Florence, NOAA’s 5-day hurricane track predicted the storm’s landfall within 2 miles.  It was a record unlike any before. Our hurricane hunters team utilized a combination of drone submarines, the new GOES-S weather satellite, and other modern technologies to more accurately collect and monitor weather data. 

 

Thanks to technology advancements – many driven by commercial support – we are generating more accurate and early weather forecasts. This enables state governors to more quickly declare emergencies, order evacuations, and save lives. The GOES-S weather satellite scans the Earth five times faster, at four times the image resolution, with triple the number of channels than older GOES spacecraft.

 

Satellite technology is redefining the world as we know it.  And as a result, business today looks far different than in generations past. That’s what I’d like to focus on this morning. For an Administration that boasts the world’s fastest growing major economy, space is truly the next frontier.

 

And you all are leading the way.

 

U.S. Aerospace companies continue to set the standard for human achievement and innovation — pushing the bounds of commercial success and supporting the United States’ position as the global leader in space.

 

Today there is a new space race — but this time, it is being run in the private sector. Companies are pushing one another to impressive new heights.   The global space economy now totals almost $400 billion – already up from the $340 billion statistic I was using when I started this job.  About 80% of that total is commercial. I believe we can reach $1 Trillion far sooner than most people realize.  But it’s going to take the people in this room to get us there.

 

At the Department, we have an effective approach to aid in this effort. It involves 4 key principles:  Advocacy; Regulatory Reform; Industry engagement; and Mission Support.

 

Commerce continues to promote and advocate for the U.S. space industry with foreign governments around the world. Our International Trade Administration’s Advocacy Center currently has 21 space sector cases valued at $2.83 Billion.  Since 2010, we’ve recorded 24 project wins for space companies across the globe valued at more than $4.3 Billion. 

 

In the broader aerospace/defense area, we’ve helped companies win 61 major contracts with foreign governments between October 2016 and September 2018.  The wins value over $79 billion. We’re also continuing to host events that connect industry with capital investment, export opportunities, and new customers.

 

This past summer we debuted a space commerce segment at our SelectUSA Summit – thanks in part to the help of Virgin Galactic, Lockheed, and others.  The summit welcomed some 3,000 business and government leaders to discuss foreign investment opportunities in America. My team and I have also been meeting with dozens of stakeholders to discuss the challenging issues facing their commercial space activities, not the least of which is burdensome regulation.

 

Commerce is conducting a regulatory reform that will unshackle the commercial space sector and unleash economic growth. As many of you know, last year we signed an interagency MOU that established concrete review deadlines and elevated decision-making when timely resolutions are not achieved.  As a result, the Department’s commercial remote sensing office expedited its licensing timelines.

 

In 2016, the average time to obtain a license was over 140 days.  Today that average has dropped to 62 days – and we are still improving. We are also working on new regulations that, if finalized, will revolutionize the way we regulate the use of cameras in space. 

 

This past August, after soliciting feedback from stakeholders on the existing regulations, my team got to work.   In just 2 months we drafted a new remote sensing rule and submitted it to OMB for final interagency review. We look forward to getting it out for public comment very soon. I can’t say too much before the rule is out for comment, but I can tell you this: we didn’t just make modest revisions.

 

We started from scratch.  The existing regulations are decades old and needed to be rewritten. Regulation of space activities today should not be a “one size fits all” approach as space activities quickly transform in purpose, size, and capabilities. Rather, the new rule would establish categories for license applications that exempt certain pre-approved activities from the lengthy review process if they are determined to not reach a heightened security threat threshold. 

 

In other words, the “Go-Pro-Like” cameras used by SpaceX and other companies — for marketing and showing customers successful stage separations — probably will not be treated the same as advanced sensing cameras that can see our shoelaces from space. This approach would allow the Federal government to focus its efforts on proposals that truly warrant national security attention.

 

The new framework would also be “living” regulations that require Executive Branch agencies to periodically revisit category criteria for the differing license review processes.  We will better accommodate rapid technology advancements and regulate for the future, not the past. Proactive, not reactive.  Rules that enable, not disable.

 

I’m also pleased to report that Commerce recently submitted to Capitol Hill a new legislative proposal from the Administration – the SPACE Act. As directed by the President’s Space Policy Directive 2, the proposal calls for creating a consolidated new Bureau of Space Commerce. The Bureau will report directly to my office and coordinate all of the Department’s space efforts.

 

The Bureau of Space Commerce will devote additional resources to supporting a wide range of new space activities – tourism, manufacturing, on-orbit servicing, prospecting, and space situational awareness, to name a few. To be clear, the proposal should not be mistaken as expanding government.  Just the opposite.  Working in concert with our Regulatory Reform Officer, the Bureau will better coordinate and consolidate functions across the Department.

 

We are going to make life easier on all of you. And the office will be comprised of a lean team of experts, bolstered by internal and external detailees. We look forward to working with Congress to see this much-needed storefront for industry become a reality.

 

As prioritized in the Department’s Strategic Plan, advancing commercial space is a whole-of-Department initiative.  We have already begun laying the foundation for this “one stop shop.” Our new space team, representing all Commerce offices and bureaus, meets weekly and collaborates on ways to advance this growing economy.

 

Our Bureau of Industry and Security is actively engaged in White House-led interagency discussions on export control reform. And we continue working on holistic spectrum management policies that will advance the far-reaching commercial space missions envisioned by President Trump and Vice President Pence. Even our grant-making agencies are focused on space. 

 

Last month, the Minority Business Development Administration awarded a small grant to the Space Foundation to assist minority businesses supporting the industry. Our Economic Development Agency has also supported several commercial space initiatives through its Office of Innovation and Entrepreneurship. And our Office of Space Commerce is reinvigorated.  The Office will host an investment summit next month to unite large-scale lenders with key industry participants. If we are going to get to $1T, significant financing at all levels of capital structure will be essential.

 

Finally, as many of you know, the President and National Space Council in June directed Commerce to take on a new role in Space Traffic Management and Space Situational Awareness. We’ve been working very closely with the Department of Defense to take on this responsibility. Our senior space officials spent time at Vandenberg Air Force Base and in Colorado Springs to more deeply understand DoD’s existing operation and capabilities.

 

I’ll be heading up to Vandenberg later today. I’m very excited about it… though perhaps not the terrestrial traffic between here and there. If any of you have handy reading materials to lend me for the car ride, please let me know.

 

We’ve forged a strong alliance with DoD, the U.S. Air Force, and especially U.S. Strategic Command. As part of this partnership, we will soon assemble a cadre of Commerce employees to work at Vandenberg as we become the civil agency interface for industry on SSA-STM.

 

We are also meeting regularly with the companies poised to provide tracking, analysis, and safe coordination of objects in space. By tapping into industry expertise, we aim to provide basic STM/SSA services that more accurately track objects in space. Even the very small ones.  Today the government can track and provide warnings for 10cm objects in space.  We’d like to get that down to 2cm.

 

To improve basic SSA data, Commerce must act more like a business ———Nimble and adaptable.

 

We’re already investigating ways to incorporate cloud computing and other advanced technologies, into an “open architecture data repository.” This will showcase innovation beneficial to the entire U.S. SSA/STM enterprise. And we see opportunities to incorporate more automation, launch vector analysis, and crash probability algorithms into the operation. A safe and sustainable space environment is vital to business.

 

The topic of the $1T space economy isn’t a pure invention -- several assessments envision rapid growth between now and 2040. One estimate from Bank of America places the space economy near $3T by that timeframe. Next week I’m giving a talk at the Chamber of Commerce Space Summit titled “How do we get to $1 trillion dollars.” Maybe I’ll see some of you there.

 

For the rest of you — here’s the cliff notes version: The first element is continued disruption and innovation in “traditional” commercial models in areas like remote sensing, navigation, and even weather. Positive disruption in technology for mapping, agriculture, and insurance are rapidly expanding both the terrestrial and space economies. Commercial entities are collecting new phenomena and using novel platforms to gain unique information.

 

Location based services are expanding, and more precise weather predictions are helping farmers, shipping routes, and pilots. GPS has redefined the economy accounting for over $60 billion in indirect economic benefit.  And that’s just what we are able to currently measure. Many of you have already used satellite technology today to get here in a car, communicate with a family member, or keep from getting lost on your morning run. It’s a wonder how we got around before smart phones.

 

Second, we are going to need a robust finance and insurance environment for space industry to get to $1 Trillion. There continues to be strong and growing financial support for the space industry.  But one of the missing components of space finance are the bigger institutions — banks — whose participation will be necessary to achieve longer-term commercial plans.

 

To return to the Moon and get to Mars, large-scale financing at all levels of capital structure will be needed. To this end, the Department is hosting the Space Investment Summit on December 12 to bring the entire capital spectrum into the discussion.

 

And finally, to get to $1 Trillion we’ll need talent — more folks like the good people in this room here today. As we work toward a much bigger commercial presence in Lower Earth Orbit, and sustained presence on the Moon, you all are going to be the engine that gets us there.  Go for it!

 

I look forward to helping you do it.

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