Russia throws in the towel


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Russian Deputy Prime Minister Dmitry Rogozin, who Putin had placed in charge of Russia’s space effort, today said in a television interview that it makes no sense for them to try to compete with SpaceX in the launch market.

“The share of launch vehicles is as small as 4% percent of the overall market of space services. The 4% stake isn’t worth the effort to try to elbow Musk and China aside,” Rogozin said in an interview on the RBC-TV channel on Tuesday.

He estimates the real market of space services at approximately $350 billion, with the creation of payloads, and not the launch of these payloads in space, accounting for the bulk of the sum. “Payloads manufacturing is where good money can be made,” he said.

Translation: We can’t figure out how to cut our costs and build better and cheaper rockets without eliminating many government jobs, so we have decided not to try. And we are going to make believe this failure is a good decision.

In response to the competitive threat from SpaceX, Putin’s government decided to consolidate their entire space industry into a single government corporation, run by their space agency Roscosmos. This reorganization however has failed entirely. Rather than encourage innovation and a lowering of costs, it served to make Russia’s entire aerospace industry a servant of politicians, who are more interested in distributing pork than building an efficient and competitive business.

Rogozin is thus essentially admitting here that Russia has lost its international commercial space business, and is therefore rationalizing that loss by claiming they never really wanted it in the first place.

This story confirms that Russia will be launching far fewer rockets in the coming years. Their dominance as one of the world’s launch leaders is now fading.

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5 comments

  • Orion314

    YET another failure of socialism.. California, demokrats, heed the example.

  • Localfluff

    It is the wise thing to do. SpaceX lower launch costs will lower profits in rocket making while increasing demand for payloads. But it is impressive that the first and most frequent launch organization gives up. Shows the magnitude of the change going on. I don’t know how competitive Russian communication satellites and such are. Rocket engines and human spaceflight have been their strengths in space.

  • Michael Dean Miller

    “Rather than encourage innovation and a lowering of costs, it served to make Russia’s entire aerospace industry a servant of politicians, who are more interested in distributing pork than building an efficient and competitive business.”

    We can describe the US healthcare industry in the same way.

  • Edward

    Localfluff wrote: “SpaceX lower launch costs will lower profits in rocket making while increasing demand for payloads.

    Manufacturing payloads will only benefit Russia if they do not succumb to the same problems that they did for launching them. Otherwise their manufacturing industry will suffer the same fate.

    As Robert noted with his link to his state of the rocket industry post, the Soviet Union had a majority of the launch market in the 1980s but has hardly any part of it, now. Back then, and as part of its downfall, the Soviets put a high priority and a lot of resources into launching rockets in order to show technical prowess and superiority. Keeping their space industry in government hands has resulted in the same disaster as all other government-run industries (including the US healthcare industry).

  • Mike Borgelt

    “We can describe the US healthcare industry in the same way.”
    Sounds like NASA to me.

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