Welcome to Thoughts on the Market. I'm Adam Jonas, Head of Morgan Stanley's Space and Global Auto and Shared Mobility teams. Along with my colleagues, bringing you a variety of perspectives, I'll be talking about space and its connection to the next frontier of human innovation. It's Tuesday, February 16th, at 11:00 a.m. in New York.
Imagine a world where all electronic communications were hackable or spoofable. A world where all encrypted databases of historic information were decryptable and fully discoverable. Financial transactions, message logs, national security data, all for the taking. Now ask yourself, do we already live in that world right now?
We're not trying to be alarmists, but more to raise awareness about what is potentially the disruption of all disruptions, and that is quantum communication. Right now, we're on the cusp of a major disruption in global communications and cryptography based on the principles of quantum physics, where information is transmitted not by sending strings of 1s and 0s, but by sending individual particles of light - photons.
By transferring information through entangled photons, we would be capable of sending data over vast distances, instantaneously, and most importantly, privately.
Now, while it may take well beyond a decade for the quantum Internet to even begin to commercialize at scale, this scientific race has already begun, in stealth, and it is moving at the speed of light. And yes, that pun is intended.
Now, what many investors may not fully appreciate is how the fast growing space economy is critical to the development of quantum communication. The Morgan Stanley Space Research Team, working closely with our technology team, is now exploring this relationship between space, cyber and quantum communication.
Satellites have long been key to the functioning of critical systems on Earth: from accurate GPS navigation, to the calibration of atomic clocks that protect the money in your bank account. But satellites would also be the most feasible way to achieve global quantum communication over far longer distances, greater coverage, and configurability vis-a-vis terrestrial networks.
Add in the exponential growth of data in an ever expanding global computational cloud, and the role of space-based communication is greatly enhanced. These advances are being propelled by falling launch costs from reusable rockets, combined with artificial intelligence and machine learning. These innovations are dramatically reducing the cost of access to space, while improving the effectiveness of space-based infrastructure by potentially orders of magnitude.
So, we look at space as increasingly existential, and data security is just part of that narrative. If you want your flying car in a few years, then you'll be relying on a constellation of thousands of low Earth orbit satellites to safely guide you to your destination. If you want to go to New Zealand in 45 minutes, then you'll need to leave the Earth's atmosphere to achieve speeds of Mach 10 or higher for most of that journey. And if we really want to tackle climate change, then we'll need to leverage a host of sophisticated space-based, Earth observation technologies to measure nature empirically.
And don't discount the revival of human space exploration and the birth of space tourism at scale.
Only when we can observe Earth from a distance, when we can look down at the surface of our planet with no borders, can we truly appreciate what Carl Sagan described as "the pale blue dot suspended in a beam of sunlight".
Now, space is hard. Sure, it's hard. Anything meaningful our species has ever accomplished was hard, difficult, crazy, impossible, until it wasn't.
Thanks for listening. And remember, if you enjoy the show, please leave us a review on Apple Podcasts and share Thoughts on the Market with a friend or colleague today.