NASA: An American Economic Engine

NASA, the National Aeronautics and Space Administration, has long been a cornerstone of American ingenuity and exploration. Established in 1958, NASA’s mission extends beyond the bounds of space; it significantly contributes to the American economy through job creation, technological innovation, and the stimulation of various industries. While some American taxpayers claim NASA is a “waste of money” and that the funds allocated to NASA “would be better used elsewhere,” when measured, it does not take one very long at all to realize that NASA largely pays for itself and that it holds a vital role in the American — and global — economy.

A study was conducted by the Nathalie P. Voorhees Center for Neighborhood and Community Improvement at the University of Illinois at Chicago, where the economic effects of NASA across the nation were measured and quantified.

In Brief

Key findings of the study include:

• Every state in the country benefits economically through NASA activities. Forty-five states have an economic impact of more than $10 million. Of those 45 states, eight have an economic impact of $1 billion or more.
  
• The agency’s Moon to Mars initiative, which includes the Artemis missions, generated nearly $2.9 billion in tax revenue. These activities provided about 32% of NASA’s economic impact.
  
• The agency’s investments in climate change research and technology generated more than $1 billion in tax revenue.
  
• Approximately 11% of NASA’s economic impacts are attributable to its investments in climate change research and technology.    
  
• NASA had more than 644 active international agreements for various scientific research and technology development activities in the 2023 fiscal year. The International Space Station, representing 15 countries and five space agencies, has a predominant role in the agency’s international partnerships.
  
• In fiscal year 2023, NASA oversaw 2,628 active domestic and international non-procurement partnership agreements, which included 629 new domestic and 109 new international agreements, active partnerships with 587 different non-federal  partners across the U.S., and partnerships in 47 of 50 states. 
  
• NASA Spinoffs, which are public products and processes that are developed with NASA technology, funding, or expertise, provide a benefit to American lives beyond dollars and jobs. As of result of NASA missions, our fiscal year 2023 tech transfer activities produced 1,564 new technology reports, 40 new patent applications, 69 patents issued, and established 5,277 software usage agreements. 
  
• Scientific research and development, which fuels advancements in science and technology that can help improve daily life on Earth and for humanity, is the largest single-sector benefiting from NASA’s work, accounting for 19% of NASA’s total economic impact.

Job Creation and Workforce Development

One of the most tangible benefits of NASA’s presence in the American economy is job creation. NASA employs roughly 17,823 full-time equivalent (FTE) jobs, paying more than $3.5 billion in annual wages and benefits across its various centers, including engineers, scientists, and administrative staff. While that is a lot of employees, NASA’s role in job creation extends much further than that.

NASA regularly contracts with private companies for spacecraft development, satellite launches, and scientific research. This relationship generates significant employment in the private sector. According to a report by the Aerospace Industries Association, for every job at NASA, approximately 10 jobs are created in the private sector, which includes roles in manufacturing, engineering, and research and development. This job creation not only supports individuals and families but also stimulates local economies where these contractors are based. The Vorhees Center study found that total employment sustained by NASA across the U.S. is estimated to be 304,803 jobs — with most of those roles being well-paid high-tech jobs.

On the intangible side of the ledger, NASA’s workforce development programs promote STEM (Science, Technology, Engineering, and Mathematics) education, which prepares the next generation for careers in high-demand fields. Through internships, educational partnerships, and outreach programs, NASA invests in human capital, ensuring a skilled workforce capable of supporting future technological advancements.

According the the Vorhees study, “For every FTE job located at a NASA facility, at least 16 additional jobs are supported throughout the U.S. economy. For each million dollars of labor income earned by NASA civil service employees, an additional $6.8 million of labor income is generated in the U.S. And for each million dollars’ worth of output produced by NASA, an additional $8 million of output—consisting of both intermediary inputs and consumption goods and services— is produced throughout the national economy. These figures are boosted by the large volume of procurement spending administered through NASA.”

Technological Innovations and Their Applications

NASA is synonymous with cutting-edge technology. The agency has been responsible for many breakthroughs that have transcended space exploration and found applications in everyday life. The agency was the first to land humans on another celestial body, the first to send a scientific probe into interstellar space (and they sent two), in addition to studying every planet and most of the important minor celestial bodies in the Solar System.

The technologies developed for space missions have led to advancements in various sectors, including healthcare, transportation, and environmental monitoring. One of the most well-known examples is the development of satellite technology. NASA’s Earth-observing satellites provide crucial data for weather forecasting, climate research, and disaster management. These technologies have been integrated into industries such as agriculture, where they help farmers optimize crop yields through precise weather data and monitoring.

Another notable output of the space program was the rapid advancement of integrated circuits — what we call “chips” — in the early 1960’s as the Apollo program sought to miniaturize, harden and extend the capabilities of computers that would be used to travel to the moon. At one point, NASA used 50% of the global supply of IC’s, and to meet the needs of the program, multiple advancements were made in the design and manufacturing of IC’s, which of course ultimately led to personal computers, cellphones and other technologies that we all use on a daily basis.

Another notable innovation is the development of advanced materials. NASA’s work on lightweight materials for spacecraft has led to the creation of stronger, lighter products used in automotive and construction industries. These materials not only improve efficiency but also reduce costs, further benefiting the economy.

Moreover, NASA’s innovations in telecommunications, such as improved data compression and signal processing techniques, have revolutionized the way information is transmitted. These advancements have fueled the growth of the telecommunications sector, which is a significant contributor to the American economy.

Research and Development (R&D) Investment

NASA’s commitment to research and development plays a vital role in driving economic growth. The agency invests billions of dollars annually in R&D, fostering innovation across various fields. This investment not only enhances NASA’s capabilities but also stimulates the broader economy by encouraging collaboration with universities, private firms, and research institutions.

By funding research initiatives, NASA creates a robust ecosystem of innovation. Universities often partner with NASA to conduct research, resulting in the development of new technologies and intellectual property. This collaboration leads to commercialization opportunities, where new inventions can be licensed or sold to private companies, generating revenue and creating additional jobs.

For instance, the Small Business Innovation Research (SBIR) program, which allocates funds to small businesses to engage in R&D, has successfully fostered numerous innovations that have applications in multiple industries. Many of these technologies find their way into consumer products, contributing to economic growth and enhancing competitiveness in the global market.

Economic Multiplier Effects

The economic impact of NASA extends beyond direct employment and technological innovations. The agency’s activities generate significant economic multiplier effects in local and national economies. For example, investments in major projects, such as the Space Launch System (SLS) and the Artemis program, lead to increased spending on infrastructure, technology, and workforce training.

When NASA undertakes large-scale projects, it requires a vast network of suppliers and contractors, which stimulates local economies. These contractors purchase materials, hire additional workers, and invest in facilities, all of which contribute to economic growth in the regions where they operate. The ripple effects of this spending can be felt throughout the community, benefiting local businesses and enhancing the quality of life for residents.

International Collaboration and Trade

NASA’s role in fostering international collaboration has substantial economic implications. By partnering with other countries on space missions and research projects, NASA enhances America’s global competitiveness and opens new markets for American companies.

Collaborative efforts, such as the International Space Station (ISS) program, bring together scientists and engineers from various countries, promoting the exchange of ideas and technologies. This international engagement not only strengthens diplomatic ties but also creates opportunities for American companies in the global market. The commercial space sector has seen significant growth in recent years, with companies like SpaceX and Boeing benefiting from NASA’s contracts and partnerships.

Moreover, NASA’s involvement in international missions often leads to the export of American technologies and services, contributing to the nation’s trade balance. The growth of the commercial space industry has also positioned the United States as a leader in space exploration, further enhancing its global standing.

Enhancing National Security

NASA’s research and technological advancements contribute to national security, which has profound economic implications. The agency’s work on satellite technology enhances the United States’ capabilities in surveillance, reconnaissance, and communication. This not only supports military operations but also provides critical data for disaster response and recovery efforts.

Additionally, NASA’s innovations in aerospace technology contribute to the development of advanced defense systems. The collaboration between NASA and the Department of Defense (DoD) leads to the creation of cutting-edge technologies that bolster national security while simultaneously providing economic benefits through job creation and technological advancement.

Long-Term Economic Benefits and Sustainability

Investing in NASA is an investment in the future.

The agency’s focus on exploration and innovation leads to discoveries that can have long-term economic benefits. For instance, the search for sustainable energy solutions is a key area of research for NASA. The technologies developed for space missions can be applied to renewable energy sources, such as solar power, benefiting both the environment and the economy.

Furthermore, NASA’s commitment to addressing climate change through Earth observation satellites and research initiatives provides valuable data that can inform policy decisions. By equipping governments and industries with the knowledge needed to address environmental challenges, NASA plays a crucial role in promoting sustainable economic growth.

In short, the bottom line is the bottom line: America is getting a great deal for the money it spends on NASA. It gets technological advancements that enrich all of our lives. It provides well-paying jobs across a wide swath of the country. It enjoys the downline spending by the employees of NASA and its vendors. And, it gets a very good rebate on the money spent in the form of taxes remitted from the businesses and employees involved in the space program.