Introduction: Economic Effects of the Space Program Analysts have identified several types of economic benefits of the U.S. Space Program: public goods, spin-offs, R&D support, and creation of new space industries. Public goods are commodities which only the government can provide in sufficient quantity, since their benefits cannot be captured by private investors in the form of profit, and they remain underproduced unless the government intervenes. For the Space Program these include knowledge gained about the universe and it’s origins, information on the characteristics and the history of the Earth and solar system, and related basic scientific knowledge [ 1 ]. Spin-offs are those technologically advanced products and processes developed for the Space Program which ultimately find productive uses in other areas - areas often unrelated to space exploration. These include photovoltaics, aerodynamic design, telecommunications systems, microelectronics, chemical processes, and so forth [2]. The Space Program enhances the nation’s R&D base and that of specific industries, and it is important for the technological competitiveness of U.S. industry. Studies have shown that investments in NASA R&D have a return of between seven and nine to one over a 20 year horizon, and few doubt the importance of R&D programs for the U.S. economy [3]. Finally, there exists the potential for creating new space-based industries, including private launch services, materials processing in space and related applications of a microgravity environment, remote imaging, infrastructure development, and so forth. Without a strong U.S. government Space Program, development of these new industries may be delayed and opportunities lost to other nations [4]. However, there is a more direct economic effect of the Space Program, which results from the sales, profits, jobs, and tax revenues generated by Program expenditures. Here we assess this more immediate economic impact of the Space Program by estimating the economic effects of NASA spending on the U.S. and on specific states. Specifically, we simulate the effects on the private sector of the FY 1987 NASA procurement budget, focussing on the following impacts. Direct and indirect economic effects. The impacts estimated here include those resulting from the initial procurement expenditures as well as those generated indirectly throughout the economy by the expenditures. Where appropriate, the multipliers (ratio of total benefits to direct benefits) are computed. The effects on each of 80 all-inclusive two-digit SIC industries are estimated, including the increased output, sales, and profits generated by NASA procurement spending. Employment. The total number of jobs created in each of the 80 industries and in each of 475 all-inclusive occupations is estimated.
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