Entrepreneurs have been backing space-related companies for years, but recent developments are pushing the private space race further into the spotlight.

In April, President Obama laid out his plan for the future of the United States space agency. A key part of his vision includes providing funding to private companies to build and fly their own spacecraft.

Although the latest NASA budget will do away with certain long-standing provisions of the space program, Obama’s 2011 proposed budget, announced in February, would dedicate $6 billion over five years to the development of commercial spacecraft. In addition, the proposed budget provides (only in FY 2011) $312 million for additional incentives for NASA’s current domestic commercial cargo service providers.

“Obama’s NASA proposal hands over more space operations to the commercial sector, saying it will create thousands of new jobs and hold costs down,” Reuters reported in February, citing a handful of private firms awarded $50 million in grants in the first step toward implementing the president’s vision of commercialized space transportation.

This month’s successful launch of the privately owned Falcon 9 shuttle bolstered that faith in space travel privatization.

On June 4, Space Exploration Technologies Corp. (SpaceX) announced that during the inaugural flight of its Falcon 9 vehicle, the craft successfully launched and achieved Earth orbit right on target, marking a key milestone not just for SpaceX, but for the commercial space flight industry.

“We achieved 100 percent of our objectives on the mission,” Elon Musk, SpaceX’s founder and chief executive, said in a New York Times report on the event.

According to Wired.com’s Autopia blog, Falcon 9′s orbital bullseye “once again pushed the private space race back into the spotlight.”

The Times agrees, saying “success was a major boon to those supporting President Obama’s proposal to turn the launching of astronauts over to private companies.”

Founded in 2002, SpaceX is a private company currently focused on delivering payloads to low Earth orbit. It aims to develop a family of launch vehicles that “will ultimately reduce the cost and increase the reliability of space access by a factor of 10,” according to the company’s Web site. SpaceX, Autopia says, believes it will be able to deliver passengers to orbit for $20 million a seat, “a fraction of the roughly $50 million NASA will be paying Russia for taxi services in the immediate future.”

Meanwhile, a start-up founded in 1999 by an entrepreneur who made his fortune in real estate and hotels, is working on a place to stay in space.

“Two prototype space modules built by Bigelow Aerospace are now circuiting the Earth,” Space.com says. “Lofted in July 2006 and in June 2007, respectively, the company’s Genesis 1 and Genesis 2 expandable modules served as forerunners to ever-larger and human-rated space structures.”

Bigelow Aerospace plans to launch expandable modules by 2014, to be assembled into “the solar system’s first private space station,” accommodating visitors a year later, according to another New York Times feature, published days after the Falcon 9 launch. A second, larger station would follow in 2016.

“The two Bigelow stations would then be home to 36 people at a time — six times as many as currently live on the International Space Station,” the Times reports.

At $395 million per six-person module per year (less than a single shuttle launch), Bigelow will lease the space station to countries that lack funding for their own space programs, while simultaneously serving as a source of revenue for the commercial space shuttle companies Obama plans to fund.

Other U.S. space companies include: the Spaceship Company; a joint venture between U.S. firm Scaled Composites and U.K.-based Virgin Group; and Space Adventures, a space tourism company that has sent seven private astronauts to the ISS.

“By showing there’s a market, we inspire private investment in technologies that will one day make it less expensive,” Space Adventures founder Eric Anderson said. (Source: America.gov)

Outside the U.S., there is great interest in the business of space but fewer strictly commercial space companies, George Nield, Federal Aviation Administration associate administrator for commercial space transportation, told America.gov in April.

“The space programs of Japan, Russia, Europe, China and India are funded by national governments,” America.gov explains. “France’s Arianespace is a quasi-private European space consortium founded in 1980 as the world’s first commercial launch-services provider.”

“We’re departing from the model of the past, in which the government funded all human space activities,” Maj. Gen. Charles F. Bolden, Jr., a NASA administrator, told Reuters. “This represents the entrance of the entrepreneurial mind-set into a field that is poised for rapid growth and new jobs. And NASA will be driving competition, opening new markets and access to space and catalyzing the potential of American industry.”

In a separate article, America.gov notes that NASA “has had a mandate to promote commercial space activities since the National Aeronautics and Space Act created the agency in 1958. In 2005 [...] the agency authorized $500 million over five years (2006-2010) to support the growth of a commercial space transportation industry and create a competitive market for supply flights to the space station.”

Related: What NASA’s New Budget Means for Aerospace

Resources

Fiscal Year 2011 Budget Estimates
NASA, Feb. 1, 2010

NASA Picks 5 Firms for Commercial Spaceflight Plan
by JoAnne Allen
Reuters, Feb. 2, 2010

Private Rocket Has Successful First Flight
by Kenneth Chang
The New York Times, June 4, 2010

No Longer the Final Frontier, Space Is Open for Business
by Jason Paur
Autopia (Wired.com), June 8, 2010

SpaceX Achieves Orbital Bullseye with Inaugural Flight of Falcon 9 Rocket
SpaceX, June 7, 2010

Private Moon Bases a Hot Idea for Space Pioneer
by Leonard David
Space.com, April 14, 2010

In New Space Race, Enter the Entrepreneurs
by Kenneth Chang
The New York Times, June 7, 2010

Growing Space Transportation Industry Expands Final Frontier
by Cheryl Pellerin
America.gov, June 3, 2009

Space Travel Moves from Government Control to Commercial Realm
by Cheryl Pellerin
America.gov, April 27, 2010

U.S. Agencies, Companies Work to Commercialize Space Travel
by Cheryl Pellerin
America.gov, May 29, 2009