Matthew Weinzierl: Weighing Deregulation, Innovation, and Power in the Economics of Space Policy

EcoAero had the pleasure of speaking with Dr. Matthew Weinzierl, a Professor of Business Administration at Harvard University and a Research Associate at the National Bureau of Economic Research. His research focuses on economic policy design, specifically taxation and the principles that create the foundation of policy choices, as well as the commercialization and economic implications of the space sector. His knowledge of both government-driven economic fluctuations and the dynamics of the space sector puts him in the perfect position to discuss the Trump administration’s recent policy changes regarding space development. 

Space To Grow, a book by Dr. Matthew Weinzierl. Credit: Amazon

On August 13th, 2025, President Trump passed an Executive Order with the goal of encouraging competition in the commercial space industry and reducing the time it takes to complete launches. The goal of this order is clear: to increase the number of launches, lower launch costs, and increase the number of competitors in the space market by 2030.  

When asked whether the order balances government influence with deregulation, Dr. Weinzierl stated that many of the directions stated in the order were half-measures or stopping points between the current state of the industry and further deregulation. “Much of what it does is ask agencies to study or examine whether regulation should be relaxed,” Dr. Weinzierl explained. “So, it’s too early to say how far it will actually go.” He also noted that it is important to identify which part of the market a given policy change is meant to correct. Regulations exist to correct issues like externalities, such as environmental and safety risks. This Executive Order is based on the idea that government regulation has been too tight around the space industry and that relaxation would improve the amount of innovation seen. 

Dr. Weinzierl also drew attention to the nuanced geopolitical state of space in today’s world, especially concerning current U.S. space power in comparison to rivals like China. Any government act in the space industry will most likely be driven, at least in part, by concerns about American leadership in space. For many years, U.S. dominance in space was unquestionable, but now that many other countries and companies are beginning to move towards entering the space industry, and a genuine space rivalry has the potential to emerge. The current administration, and likely all administrations, are primarily concerned with national security and power, and deregulating space has the potential to increase innovation and drive America towards these goals. 

The Executive Order, however, defines its primary objective as helping new entrants to the space industry compete with industry giants like SpaceX and Blue Origin. Weinzierl does believe that deregulation can achieve this: historically, deregulation has lowered barriers to entry by reducing nonessential costs, such as in the Airline Deregulation Act of 1978. On the other hand, he also believes that major players like SpaceX are still creating value in the space industry rather than just capturing it. Innovation in these large companies is still alive and well, but to keep competition healthy, government support should allow smaller firms to enter the industry as well. 

The Executive Order contains many reductions in the environmental and safety standards by which launch programs abide. This could possibly shift more risk onto society, whether this is economic, environmental, or related to public safety. However, Weinzierl believes that in this case, the benefits outweigh the costs; increasing benefits to the commercial space ecosystem is important enough to warrant a small amount of added risk. The future of space lies in private companies, and private companies need room to grow 

Lastly, Weinzierl takes issue with the Executive Order setting its targets based solely on launch frequency. Raw numbers can be a poor measure of products, and furthermore, Weinzierl argues that “launches are inputs, not outputs.” More meaningful indicators of success or failure can be found in the Bureau of Economic Analysis’s space economy data, the creation of jobs, and the value added to the national GDP. There are also more exciting benchmarks that can be used to measure the success of the space industry, such as the replacement of the International Space Station and the achievement of long-term human missions to Mars. 

At EcoAero, we believe that the pursuit of progress in space must be done in a sustainable way with foresight and responsibility. Our discussion with Dr. Matthew Weinzierl helps us understand the intricacies of regulations in the space economy, and how deregulation has the potential to be very beneficial for the commercial space industry. EcoAero remains committed to promoting thoughtful dialogue about the big decisions in the space industry. Policies that ensure growth in the space sector must strengthen, not compromise, the prosperity of Earth, and only time will reveal the impacts of this Executive Order. 

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