How high can Washington state’s space industry rise?

Preliminary findings suggest that the economic impact of the state’s space sector more than doubled between 2018 and 2022, and nearly doubled again between 2022 and now. But at the same time, some leaders of the space community are questioning whether the Pacific Northwest can keep pace with other regional clusters in, say, Florida, Texas and Colorado.

That good news, bad news situation made headlines this week when Stoke Space CEO Andy Lapsa questioned whether he’d pick the Seattle area as his home base if he had to do it over — just before taking the stage as a member of Gov. Bob Ferguson’s Washington Space Council.

Ferguson isn’t the only elected official trying to make sure the Seattle area keeps up on the space frontier. Dana Ralph, the mayor of Kent, Wash., where Stoke is headquartered, made that clear in her remarks during the kickoff for Seattle Space Week at the Museum of Flight.

“We don’t take you for granted,” said Ralph, addressing a gathering of CEOs, investors and other VIPs. “I want you to hear that out loud: We don’t take you for granted.”

Seattle Space Week — highlighted by Tuesday’s Space Northwest Symposium in Federal Way — provided plenty of opportunities for discussing the challenges facing Washington state’s space ventures. Here are four problems to face, and four prospects to look forward to.

‘We have a problem’

The launch crisis: The availability of launch opportunities has shrunk dramatically. “It’s just crazy how there’s this mismatch between supply and demand right now in the industry,” said Tim Beard, Stoke Space’s chief financial officer. “It’s becoming a crisis.”

One factor is the increased demand for deploying satellite constellations for broadband data services (such as Starlink and Amazon Leo) and for future AI data processing (such as Starcloud, SpaceX’s Starmind and Google’s Project Suncatcher).

Another factor is reduced supply: Blue Origin and United Launch Alliance are dealing with setbacks in their next-generation rocket programs. Meanwhile, SpaceX is talking about phasing out its workhorse Falcon 9 rocket as it makes the transition to Starship. The resulting launch crunch is an industry-wide problem, but it hits Seattle’s satellite ventures especially hard.

The workforce challenge: There’s also a limited supply of skilled technicians and engineers. Bill Bruner, CEO of New Frontier Aerospace, ranks that as his No. 1 challenge. “It’s finding skilled, trained people to do, not just the hard engineering work, but the Grade 13, Grade 14 graduate technical work,” he said. “We need a national solution to that problem.”

Ralph said Kent and other Seattle-area municipalities need to partner with state government and commercial ventures to address the challenge. “We should be able to make it easier for employers to invest in apprenticeship, credentials and on-the-job training,” she said. “We need to build a workforce system that moves with industry, not several years behind it.”

Funding from faraway: Much of the funding that fuels Seattle’s space ventures comes from elsewhere. “There are a lot of VCs in Seattle, but they’re not necessarily space VCs,” said Mike Reilly, chief strategy officer for Varda Space Industries. “I feel like a lot of the space money comes out of L.A. and San Francisco.”

Brian Monnin, co-founder and chief commercial officer at Sophia Space, said midsize space ventures need to find ways to fill their funding gaps. “Debt financing is one way,” he said. “But I think there should be more public-private combinations of firms, traditional banks working alongside debt financiers, working alongside the public for us to fill that vast middle.”

Regional rivalries: Several executives said other states are much more aggressive than Washington when it comes to attracting space ventures. “The incentives just aren’t here,” Monnin said. “We’re looking at where we build our Factory One for Sophia Space tiles, and you have to look at the incentives from sovereign funds in New Mexico, Louisiana and others. They’re far more attractive than they are in this state currently.”

The inter-regional competition was one of the challenges cited by Stoke Space CEO Andy Lapsa — and by his CFO as well. “I need to be pretty direct in that we’re being actively courted by any number of states: Colorado, Texas, Florida,” Beard said. “They want us to move there, but Washington state is the right place for Stoke. … I hope our policymakers in Olympia, throughout the state, our senators hear this. We want to stay in Washington state. Help us do that.”

‘Light this candle’

Public-private partnerships: The newly announced Washington Space Council isn’t likely to set up a multibillion-dollar fund for space ventures anytime soon, but it could serve as a forum for business executives and government officials to work out realistic ways to foster the state’s space industry.

Will the work of the council go beyond virtue-signaling? Last year, the Governor’s Economic Development Strategic Reserve Fund awarded $350,000 to support Portal Space Systems’ expansion into a 50,000-square-foot satellite manufacturing facility in Bothell, Wash. Such grants may serve as a model for future financial incentives.

Satellite offices: Space ventures don’t need to be headquartered in Washington to benefit the state’s space industry. Cowboy Space, for example, is based in California but recently announced the opening of a 291,035-square-foot spacecraft design and manufacturing facility in Kent. BlackSky is based in Virginia, but its satellites are built in a 22,000-square-foot factory in Tukwila, Wash. SpaceX may have moved its corporate headquarters from California to Texas, but it still makes more than half of the world’s satellites at its facilities in Redmond and Woodinville, Wash.

Just as Google and Meta maintain engineering hubs in the Seattle area, out-of-state satellite ventures are likely to establish Seattle-area outposts. “The fundamentals that made this region are still here: talent, a deep supply chain, industrial capacity, a culture of making things, and generations of knowledge that you simply cannot re-create overnight,” Ralph said.

Coming attractions: The silver lining to the launch crisis is that Stoke Space and other commercial space ventures plan to fill the gap. And when SpaceX’s Starship enters service, that could dramatically change the parameters of the launch market. Ron Faith, CEO of RBC Signals, said this week’s first orbital Starship flight was “a pretty big milestone event.”

“Having Starship go into orbit and deploy real satellites … that’s a significant increase in capacity for launch,” he said. “But with that said, we’re also seeing many, many more launchers come online.” The list includes Blue Origin’s New Glenn, United Launch Alliance’s Vulcan, Rocket Lab’s Neutron, Firefly Aerospace’s Alpha, Relativity Space’s Terran R — and yes, Stoke Space’s Nova.

A pad of our own: When it comes to space facilities, the Seattle area lacks two big items: a nearby NASA center and an orbital launch pad.

During a recent visit to Redmond, NASA Administrator Jared Isaacman didn’t offer much encouragement for the space agency’s fans in the Pacific Northwest. “I think it’s unlikely we’re going to be adding any additional centers right now,” he told me.

But at the Museum of Flight, Ferguson said the Washington Space Council “will look for ways we might be able to develop Washington-based commercial launch capabilities.”

At the Space Northwest Symposium, Monnin wondered why the Seattle area’s space ventures haven’t forged closer ties with the region’s military installations. “It’s a shame that over the last few decades we haven’t seen the affinity toward Fort Lewis-McChord or the naval base in Bremerton as innovation centers … because from an orbital compute standpoint, the biggest need is defense- or security-related,” he said. “How we haven’t tapped into that as a state, I think, is a miss.”

The Pacific Northwest’s geography would make it difficult to put a launch pad in a place that avoids posing a significant risk to populated areas. That’s why Blue Origin and Stoke Space have their orbital launch pads in Florida instead of Washington. But when Beard was asked about the prospect of using a pad closer to home, he wasn’t dismissive.

“Launching from the Washington coast would be fantastic,” he said. “Also, my geography is not great, but I think it’s slightly closer to ship a rocket to the Washington coast than it is all the way down to Cape Canaveral. So, that’s one advantage as well. We’d love to see launch here, and I think that we’d be good partners to do that with.”

Check out the Space Northwest website for the Seattle Space Week event calendar.

The preliminary results of a study commissioned by Space Northwest, an association focused on regional space ventures, suggest that Washington state’s space economy contributes $8.1 billion in direct economic output annually.

The newly reported figures show that the space industry’s economic impact in the Evergreen State has nearly doubled since a similar study in 2022. That earlier report also documented a doubling effect over the course of four years, from $1.8 billion in 2018 to $4.6 billion in 2022.

Kelly Maloney, Space Northwest’s co-founder and the chair of the association’s board of directors, shared the latest figures today at the Space Northwest Symposium in Federal Way, Wash. She said the preliminary findings, developed by BERK Consulting and Alliance Velocity, reinforce the view that space is not just a niche industry in Washington.

“We are effectively the Space Tech State,” Maloney said.

She said the state’s space sector directly supports about 12,300 jobs and $2.3 billion in labor income. When indirect and induced impacts are included, the figures rise to about 34,200 jobs, $12.4 billion in statewide economic output and $3.9 billion in labor income.

“For every direct space job in Washington, another 1.8 jobs are supported elsewhere in the economy,” Maloney said.

She noted that the space sector’s direct labor income averages about $188,000 per worker.

“That is twice the statewide average,” Maloney said. “So, this is not just a growing industry in terms of employment. It is an industry generating significant economic value and exceptionally strong labor income here in Washington.”

Maloney added that 94% of the state’s direct space sector jobs are concentrated in three highly technical areas. “Nearly 6,500 people work in space vehicle and propulsion manufacturing; more than 3,000 in research, engineering and computing; and just over 2,000 in space electronics and hardware,” she said.

Washington’s space workers play a central role in the satellite industry. More than 68% of all active satellites in Earth orbit were built in the state, according to the analysis. Most of those made-in-Washington satellites were produced at SpaceX’s Starlink operation in Redmond.

The study also found that 24 space startups headquartered or operating in the state have collectively raised more than $4.3 billion, including more than $3.7 billion since 2021.

Space Northwest is lending support to eight space startups through a new program called the Space Technology Accelerator for Growing Entrepreneurship, or STAGE. The selected startups will participate in a 12-week program, with each startup receiving three hours of personalized coaching alongside specialized workshops.

STAGE’s first cohort includes:

• Beyonders: “We’re opening the door to the wonder of cosmic discovery by creating your own spacecraft … gram-scale picosatellites,” said founder Mike Antares.
• Godel Space: Founded by Vikash Kodati and named after famed mathematician Kurt Gödel, this startup is building autonomous AI agents for satellite payloads.
• Kynthos: Co-founders Selvan Viswanathan and Priya Srinavasa are working on software that maintains continuous custody of high-value assets and non-cooperative space objects.
• Luthien Space: “We are in the business of making lunar landings and missions safe with a decision-grade intelligence tool that is physics-validated,” said founder Tammy Payne.
• Ora Biomedical: “What Ora Biomedical is focused on is creating the therapies that enable longer, safer spaceflight and crewed missions,” said co-founder and CEO Ben Blue.
• Signal Sights: This venture is developing systems that convert radio frequency signals into intuitive visual information to improve situational awareness and decision making.
• SQK: This three-year-old startup provides guided computational AI to reconstruct and validate complex scientific data from noisy, incomplete or low-signal measurements.
• Wave Motion: “What we want to do is turn the rocket equation on its head. … We essentially take the rocket fuel and beam it to the rocket as it’s needed,” said co-founder James Penna.

The preliminary findings reported by Space Northwest were produced by BERK Consulting and Alliance Velocity. Additional data sources include company-reported information, Crunchbase, and satellite data from Jonathan McDowell. The full report is still pending.

Check Space Northwest’s website for a schedule of Seattle Space Week events.

Making the entrepreneurial leap is hard enough, let alone launching a company into orbit. Andy Lapsa gave up a well-paying job, spent his family’s nest egg and went 15 months before paying himself half his old salary to get Stoke Space off the ground.

He said Stoke chose Washington state for its world-class talent in software, aerospace and manufacturing, and for a virtuous cycle in which iconic global companies bring talent and suppliers to the region, and their alumni go on to start companies of their own.

But if Lapsa and co-founder Tom Feldman were starting the Kent, Wash.-based rocket company today, he told a Seattle audience Monday, he’s not sure they’d do it here.

Lapsa cited factors including a political climate that vilifies successful companies and their founders; a state that does less than others to court promising startups; Seattle’s public schools, which he described as a failed institution; and the push for a wealth tax on unrealized gains, which he said would put startups out of reach for anyone who isn’t already wealthy.

“What will it take to ensure the next Stoke builds here, too? If Stoke were starting today, I’ll be straight honest with you: I’m not sure we’d make the same decision,” he said.

Lapsa delivered the keynote at “Manufacturing the Future in the PNW: Space, Defense & Robotics,” a Seattle Space Week event hosted by Creative Destruction Lab-Seattle.

The speech, which he read from multiple sheets of printed paper, drew on his family’s story and at one point left him choked up. The crowd gave him a standing ovation at the end. The talk was the buzz of the afternoon and the Space Week kickoff at the Museum of Flight in the evening.

Echoes of Schultz: Lapsa’s remarks tracked closely with a July op-ed in the Wall Street Journal by former Starbucks CEO Howard Schultz, who singled out Stoke as a test for the state.

“We should all be watching Stoke Space,” Schultz wrote, to see whether it and other companies “decide that Washington is the best place for them to grow.”

Schultz, who moved to Miami earlier this year, came up in Lapsa’s speech, too. Lapsa cited him and Jeff Bezos as examples of successful founders the region has vilified, and he pointed to Boeing’s headquarters move and Amazon’s HQ2 as part of the same pattern.

Other states calling: Lapsa said South Carolina, Texas, Florida, Ohio, Idaho and Illinois had all emailed him in the past week or two trying to get Stoke to open up shop there.

“I’ve never received the same in Washington state,” he said.

To be clear, in questioning whether he would make the same decision today, Lapsa was speaking hypothetically about founders starting new companies, and didn’t suggest that Stoke plans to leave Washington, where the company has been expanding its operations.

Hours later, Lapsa was among the 23 members of Gov. Bob Ferguson’s new Washington Space Council, introduced at the Space Week kickoff event, as GeekWire reported. Speaking there, Lapsa struck a similar tone, stressing the need for the state to move quickly.

“States like Florida and Texas and Colorado want this industry, and they want it bad,” he said. “They compete for it every day. Washington has every advantage it needs to lead them all, and the window to use those advantages is open right now.”

A rocket ship: Lapsa’s comments carry additional weight because of Stoke’s trajectory.

Stoke is developing Nova, a rocket designed so that both of its stages can return and fly again, with the goal of making access to space cheaper and more frequent. It’s only the second company to pursue full reusability, after SpaceX, which reuses the first stage of its Falcon 9 but hasn’t yet achieved full reuse with its much larger Starship.

The company announced a roughly $1 billion Series E round this month, bringing its total funding to about $2.3 billion. It has more than 350 employees in Washington state, a 168,000-square-foot factory in Kent, and a test site in Moses Lake that it’s expanding from 75 to 550 acres.

The first Nova launch is scheduled for early 2027 from Cape Canaveral.

The personal stakes: Lapsa made his case against a wealth tax by telling a personal story that he said he had never told before.

His father grew up in a post-war refugee camp and waited 12 years to immigrate to the U.S., arriving without speaking English. He became a university researcher, but Lapsa’s mother still worked a minimum-wage job to help put Lapsa and his two siblings through college. Lapsa and his wife graduated from college about $200,000 in debt and spent about a decade paying it off.

When he left Blue Origin to start Stoke in 2019, he gave himself nine months to get on track to earn a living wage. Small-business grants and a few angel investors kept the company going.

That’s why proposals to tax unrealized gains worry him. When a startup raises money, its founders become wealthy on paper overnight, he said, without a dime of cash to pay the resulting tax bill.

“It makes it so that the only people who can afford to start a company are the people who are already rich,” he said.

Washington doesn’t tax unrealized gains. However, Lapsa noted that the idea of a wealth tax has been popularized in California and to some extent locally. A one-time tax on California billionaires’ net worth is on the November ballot there, and wealth-tax bills introduced in Olympia haven’t advanced.

Washington’s new 9.9% tax on income over $1 million, which takes effect in 2028 if it survives legal and ballot challenges, applies to income, not to the paper value of a founder’s shares.

A note of optimism: Lapsa closed by urging the audience to look past the headlines in their feeds and think critically about the consequences of the policies being proposed. He warned that political extremism harms the country and benefits its adversaries, and that both sides of the aisle are feeding a dangerous cycle of rhetoric.

Americans have more in common than their differences, he said. The freedoms they share, including the ability to change public policy when it isn’t working, are what made the U.S. the greatest country in history, he added.

“These are the reasons I stubbornly cling to the hope that Washington state will come around,” he concluded, “and the next Stoke Space decides here is their place.”

Updated at 3:56 p.m. to clarify that Washington does not tax unrealized gains, and to add context about wealth-tax proposals and the state’s new tax on high earners.