The (New Space) Economics Behind Cubesats—Return on Investment Considerations of Government-Funded Space R&D Projects,with a Focus on a Business Case from Hungary

Abstract

Our study explores the economic implications and returns on investment (ROIs) of government cofunded CubeSat initiatives, focusing on a Hungarian case within the New Space Economy. It highlights CubeSat as cost-effective platforms for scientific exploration and technology demonstrations, revealing a projected ROI ratio of 1:2.58 for the privately funded portion of a Hungarian nanosatellite mission launched in August 2024, compared with the United Kingdom’s general 1:9.8 ratio from all European Space Agency investments. Cubesat enhance scientific productivity, with the Firebird II mission yielding 2.2 publications per million dollars, outperforming larger missions. They also contribute to workforce development by providing hands-on experience for students and researchers. However, the success rate for first-time CubeSat developers is a concern due to project management challenges, early stage on the learning curve, and the absence of economies of scale. To improve mission success and ROI, structured project management practices are essential. This article concludes that government-funded CubeSat projects can yield significant economic and scientific returns, emphasizing the need to address operational challenges and foster innovation and education in the space sector.