WASHINGTON (August 5, 2026) — As the global space economy races toward a projected $1.8 trillion by 2035, a new report from the Progressive Policy Institute (PPI) argues that governors and mayors will play a critical role in American space leadership. In “Leading in the Space Economy: A Strategic Playbook for Governors and Mayors,” PPI Head of Space Policy Mary Guenther lays out the tactics state and local governments are using to attract and retain space companies, and warns leaders away from a subsidy race to the bottom.
Last year, the space economy was worth $626.4 billion globally, with the United States producing roughly half of that value as of 2023. Jobs in the sector pay above-average wages for workers at every education level, from high school graduates to PhDs, a combination that has touched off intense competition among states and localities.
“Governors and mayors have more leverage over the space economy than most of them realize,” said Guenther. “State and local dollars can’t replace federal space investment, but they can multiply it. The states that are best positioned right now are the ones with a holistic approach that amplify their local strengths by marrying various kinds of incentives, political attention, partnership with federal stakeholders, and initiatives building a workforce those companies can hire.”
Drawing on interviews with space industry representatives and startup founders, the report identifies four tactics that appear repeatedly in successful state and local strategies:
Guenther also documents an intensifying workforce crunch across educational levels. The report notes that 95% of space organizations face skills-related problems, with three-quarters struggling to recruit staff with the necessary skills. Because most space companies handle export-controlled technology or contract with the Department of Defense, employees generally must be U.S. citizens or permanent residents, a restriction that puts a substantial share of the STEM talent pool out of reach and makes homegrown pipelines essential. Washington state, Florida, Oklahoma, and Colorado offer models that run from K-12 programming through apprenticeships, community college credentials, and university-industry partnerships.
The report draws a pointed contrast with China, where provincial and municipal governments compete aggressively to build out local space capacity, an approach that has produced growth alongside waste, duplication, and excessive debt. American leaders, Guenther argues, should take the lesson without the liabilities.
Read and download the report here.
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Media Contact: Ian O’Keefe – iokeefe@ppionline.org
