Jonathan Marriott, Chief Investment Officer
In 1962 President Kennedy famously said "we choose to go to the moon", announcing that the US would put a man on the moon by the end of the decade. Fifty years ago this week, Neil Armstrong became the first man to walk on the moon with the words, "one small step for man, one giant leap for mankind". The material developed for use in his space suit that day is now used for roof structures such as the Mound Stand at Lord's cricket ground where England won the World Cup on Sunday. Just one example of the spinoffs from the Apollo programme that put a man on the moon. So what benefits do we see today from the $25 billion (or about $150 billion today) spent on the programme?
Putting a man on the moon was, by any measure, an extraordinary achievement and added enormously to our knowledge of the moon, but did little directly to change life on earth. The spinoffs from the Apollo programme are all around us. The Apollo programme was faced with disaster early on when a fire on board Apollo 1 asphyxiated the astronauts. This led to a redesign of the space suits, to provide better heat and fire protection, resulting in the familiar white suits worn during the moon landing. The Teflon coated material is weatherproof and light and is now used to provide not only the covering for the Mound Stand but also the roof of the Millennium dome, now the O2. Traditionally, aircrafts were controlled by mechanical linkages, however, the moon landing was controlled via a computer. This was the predecessor to the modern fly-by-wire commercial aircraft such as the Airbus A320. The Apollo 11 guidance computer weighed 32 kilograms, or 72 pounds, and the main memory was just 2K and had 32K of storage. Miniscule by today's standards, but when it overloaded during the moon landing (due to the radar system being left on) it flashed "System Error 1202". However, rather than crash, it automatically cut out all but essential services and the landing continued. A tribute to the computer programmers.
Many products used today, from cordless vacuum cleaners to the solar panels in pacemakers, originate from or have been improved by ideas developed from the space programme. Since 1976, NASA's 'Spinoff' magazine has chronicled nearly 2,000 products and services that began as a result of their technology. Oil pipelines in Alaska continue to flow because of foam insulation bonded to metal, a technique developed by NASA. It is true that if the same level of investment had been spent on the same research irrespective of the NASA programme, these products may still have been invented. However, the space race to beat the Russians incentivised the US to push developments faster and further than may have otherwise been possible. Some question the value of theoretical research that has no immediate practical applications. As an example of an unrelated benefit to come from a research project: it was scientists searching for subatomic particles at CERN that gave us the World Wide Web.
Competition today means that companies have to innovate to stay ahead. However, as NASA demonstrated, governments can play their part to promote long-term research. It is companies that recognise and adapt to changes that can lead us forward. Equally, companies who do not adapt to change, for example some high street stores vs online shopping, end up losing out to the competition. Investment in science is rarely wasted, but as illustrated by the moon mission, the headline objective may appear unrelated to the many benefits that come from it. From an investment point of view, we look to invest in companies that are forward looking and aiming to benefit from a changing world. Sadly, political uncertainty is holding back investment and contributing to a slowing economy globally.
US astronauts last visited the moon in 1972 when the programme was cut; it is possible that the next human visitor will be a Chinese astronaut. China have sent an unmanned probe to the far side of the moon earlier this year and have ambitions to build a space station on the moon. They have the political will and drive to do this, which may be lacking elsewhere. If the space programme gives Chinese technology the same boost the US experienced in the sixties, then we may look east for the innovations that change our lives in the years to come. Should the next country to bring rock samples back from the moon be China, could Trump impose tariffs on them if they are sent to the US for analysis? After all, the Apollo 11 crew completed a customs declaration form for the moon samples they brought back into the US. The rise of China as an economic and technological powerhouse is, in the end, unlikely to be halted by Trump's tariffs. Investors and companies will need to monitor developments in China even more closely in future.
US ambitions in space are far from over and the private sector is looking to develop space tourism. The space race continues with proposed missions to 'Mars and beyond', and developments from these projects will continue to filter into our lives. The Cricketers on Sunday may not have been aware but the shoes they wore were made using techniques and materials that were rooted in the space programme.