The secret ingredient for Artemis I’s success: How small businesses are taking us to the moon

NASA has once again set human beings on course to walk the moon. The space agency’s successful launch of the Artemis I mission on Nov. 16 and the Orion spacecraft splashdown over the weekend will position us to bring the first woman and person of color to the lunar surface by 2025. That represents a “giant leap” not only in terms of technological prowess but also in championing human diversity.

This huge success follows the release earlier this year of astounding images of star-forming nebulas and faraway galaxies from the James Webb Space Telescope.

These mammoth space achievements are not just the handiwork of NASA and our great scientific community–they have also been made possible through the contributions of our nation’s small businesses.

While some may think NASA programs are largely executed by big aerospace contractors, roughly 90% of aerospace companies are small businesses. NASA contracts with a surprising number of them. In 2021, the agency spent more than $3.5 billion on contracts with small firms.

Of the more than 3,800 suppliers providing parts for the Artemis rocket, the overwhelming majority are small businesses.

One reason NASA and its prime contractors use so many small firms is that SMEs can often devote more time and energy to unique projects than larger enterprises can. Plus, they can often do so at a lower cost.

For example, there’s a firm focused on developing thermal systems that would allow rovers to travel to the cold depths of the moon’s craters for the first time. Another small firm is perfecting technology that can clear debris in space without a human crew’s help. Another business is focused on creating a rocket propulsion system that uses electricity rather than fuel.

On its own, a single small firm’s innovation might not make or break a mission. However, by synthesizing the cutting-edge technology of so many specialists, NASA can create end products that are truly revolutionary.

Small firms deliver an outsized economic impact

In South Carolina alone, aerospace companies contribute $19 billion to the economy and employ roughly 100,000 people. Small businesses–many with fewer than five employees–make up the majority of these firms. In Washington, small companies help fuel a $4.6 billion aerospace economy that supports 13,000 jobs.

Additionally, small aerospace businesses have a hand in educating their communities about space programs. And since many small firms are women-, minority-, or veteran-owned, they play an outsized role in diversifying the entire aerospace industry.

Despite the critical part these firms play in space exploration, they face a number of barriers.

One is access to capital. Small aerospace firms typically rely on just a few products–or even a sole product–to drive revenue. They may be pre-revenue–and thus reliant on private investment or government contracts for the funding they need.

To cut costs, NASA is increasingly using fixed-price contracts that offer a business a set amount of money for a job, even if the scope of that job increases or if inflation rises. That strategy is forcing small firms to take on more financial risk every time they partner with the government.

Meanwhile, small firms without the resources or name recognition of larger enterprises are grappling with a shortage of roughly 50,000 workers–from engineers and scientists to technicians and manufacturing workers–in the aerospace and defense sector, according to August data.

It’s imperative for the future of U.S. space exploration, the economy, and the pursuit of equity that the government recognizes these challenges.              

NASA can diversify the supply chain and support a more inclusive industry by avoiding a one-size-fits-all contracting approach. The agency should issue fixed-price contracts only when the scope of the project in question is certain.

In any other scenario, NASA should use appropriate contracting mechanisms, which require the government to reimburse the company for the full cost of the project, plus a profit. NASA should also continue to use contract requirements to ensure that a reasonable percentage of work (historically, around 10%) goes to women-, minority- or veteran-owned firms.

Government organizations like the National Space Council and the Department of Labor can bolster the aerospace workforce by facilitating partnerships between companies and the academic institutions that are training the next generation of workers. A more direct connection between government, industry, and academia could ensure students have sufficient exposure to the aerospace sector and the skills needed to succeed and support the industry.

The government could go a step further by offering economic incentives to help small businesses attract new talent.

Making such investments wouldn’t just help small aerospace businesses maintain their rapid pace of innovation–it could, quite literally, propel us to the moon.

Frank Slazer is president and CEO of the Coalition for Deep Space Exploration.

The opinions expressed in commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.

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