Economics gets major lift from space tech

Data mined from satellite photos used to track development trends and effect change

NEW YORK • Some 400km above Earth, a flock of shoebox-size Dove satellites is helping to change our understanding of economic life below.

In Myanmar, night lights indicate slower growth than World Bank estimates. In Kenya, photos of homes with metal roofs can show transition from poverty. In China, trucks in factory parking lots can indicate industrial output.

Images from these and other satellites, combined with big-data software, are helping to create what former Nasa scientist James Crawford calls a "macroscope" to "see things that are too large to be taken in by the human eye". Aid organisations can use the results to distribute donations. Investors can mine them to pick stocks.

"This is one of those really rare game-changers that come along very infrequently but has the ability to remake the whole stock- and economic-research industry," said Mr Nicholas Colas, chief market strategist at Convergex Group, a New York-based brokerage.

For much of the nearly 60 years since Sputnik first circled Earth, satellites have mainly been the exclusive domain of the richest governments and companies, costing billions and weighing tonnes. Now cheap orbiting cameras are becoming more ubiquitous.

REVOLUTIONARY

This is one of those really rare game- changers that come along very infrequently but has the ability to remake the whole stock- and economic-research industry.

MR NICHOLAS COLAS, chief market strategist at Convergex Group

Planet Labs, a start-up founded by former Nasa engineers, has one of the largest-ever constellations. More than 50 of its Doves orbit Earth every 90 minutes, snapping high-resolution photos imaging most of the planet each day. 

Seattle-based BlackSky Global, backed by Microsoft co-founder Paul Allen's Vulcan Capital, plans to start launching its fleet of 60 satellites next year to scan most of the globe 40 to 70 times a day.

Millions of photos are useless, of course, until they become data. That transformation is the goal for start-ups like San Francisco- based Spaceknow. Its CEO Pavel Machalek says imagery eventually will track all the world's trucks, ships, mines and warehouses to attain what he calls "radical economic transparency".

He has created an index of China factory production using algorithms to monitor more than 6,000 industrial facilities, hoping to supplant survey-based purchasing manager indexes with software that identifies signs of economic activity, such as transport vehicles in parking lots. 

Mr Crawford, who founded Orbital Insight, wants to create the macroscope that will alter the world as microscopes did centuries ago. The Palo Alto company uses advanced image processing and algorithms to track national and global trends. One product estimates sales at 60 US retail and restaurant chains. Others generate a global poverty map and predict illegal deforestation by watching for signs of logging.

Customers include hedge funds, banks, government agencies, nonprofit organisations and Fortune 500 companies - "anyone who needs to understand the world at scale to make decisions", said Mr Crawford, who led the team that created the daily activity planners for Nasa's Mars rovers.

These technologies are breathing new life into economics, where policy is driven by information-gathering techniques dating back to the 1940s. Now images can be processed into statistics available in days, not months, and even old data can reveal new answers.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on July 13, 2015, with the headline 'Economics gets major lift from space tech'. Print Edition | Subscribe