The design and development of space instruments are considered to be distinct from that of other products. It is because the key considerations are vastly different from those that govern the use of products on planet earth. The service life of a space instrument, its use in extreme space environments, size, weight, cost, and the complexity of maintenance must all be considered. As a result, more innovative ideas and resource support are required to assist mankind in space exploration. This article reviews the impact of product design and innovation on the development of space instruments. Using a systematic literature search review and classification, we have identified over 129 papers and finally selected 48 major articles dealing with space instrument product innovation design. According to the studies, it is revealed that product design and functional performance is the main research focuses on the studied articles. The studies also highlighted various factors that affect space instrument manufacturing or fabrication, and that innovativeness is also the key in the design of space instruments. Lastly, the product design is important to affect the reliability of the space instrument. This review study provides important information and key considerations for the development of smart manufacturing technologies for space instruments in the future.