Britain’s industry-led space policy “model” has been a resounding success. But can it survive the fierce competition of the new space race?
Controversy over UK’s access to Galileo has doubled as a welcome reminder of how crucial space is for this country in security terms. The point was underscored on 21 May by the defence secretary, Gavin Williamson, who announced the launch of Britain’s first Defence Space Strategy.
But as a recent Policy Exchange event with Jesse Norman MP, Patrick Wood from industry, and Air Marshal Edward Stringer showed, the UK space sector is also a great British success story – and one achieved with comparatively little direct public investment. The latest figures for 2017 reveal a space industry with a turnover of some £15bn (6.5% of the global market) that is growing at 7% per year, with a 71% cumulated growth since 2012. (For comparison, the UK defence industry employs 140,000 people, brings in £22.1bn, and has grown only 13% since 2007.) It builds 40% of all small satellites in the world, and a quarter of all telecommunications satellites. And it employs 40,000 highly-skilled workers whose labour productivity is 2.7 times higher than the UK national average.
These numbers paint an impressive economic picture, but the real competitive advantage of UK’s space enterprise is qualitative. Britain is at the cutting edge of space science and technology, particularly in sophisticated space-data digital processing and advanced satellite payloads. This accounts for UK’s deep involvement with some of the most sensitive and complex aspects of the Galileo system, for example – and for the assured confidence in many parts of the space community that, if left no other choice, Britain has the capacity to build its own “satnav” capability.
In true free market fashion, the rise of UK space has been driven overwhelmingly by the private sector rather than by big taxpayer-funded space programmes in expensive domains such as domestic launchers or manned spaceflight. Domestic space champions include Inmarsat, one the world’s largest satellite operators, and Surrey Satellite Technology Ltd (SSTL), the world’s leading small-satellite manufacturer. And with vibrant, well-functioning investment and insurance markets, UK hosts both the largest number of “angel” investors in space, and the largest number of start-up space companies, outside the US. According to the FT, 43% of EU space tech companies funded by venture capital over the past year are UK-based.
By contrast, annual public spending on space through the UK Space Agency stands at only £371m and is one of the lowest levels among developed countries. The bulk of that goes straight into multinational European Space Agency (ESA) projects and eventually finds its way back into the UK space industry in the form of ESA-commissioned work. Even so, a 2016 report on the UK space economy showed that only 14% of the industry’s income comes from public sector contracts (including the ESA and other space agencies across Europe).
But as the new commercial space race heats up – with the global market set to reach £400bn within the next 12 years – will this low-cost, light-touch UK space strategy be enough? The government’s stated ambition is to grow UK’s share of that global market to 10% by 2030, and one major growth vector is expected to be the space launch sector – recently “activated”, regulatory-wise, through the Space Industry Act (SIA). The idea is to capture as much business as possible from a global launch activity that is set to put between 3,500 and 10,000 small satellites in orbit by 2025. Jesse Norman, the transport minister who helped guide the SIA through parliament, is confident that Britain can become the “European hub for commercial spaceflight over the next few years”.
“Time to market”, however, “is now critical for UK launch”, as our industrial panellist Patrick Wood – observed at a recent Policy Exchange event. There are still secondary space launch regulations to be sorted out following the SIA and no spaceport project has yet been greenlighted, let alone developed. Others are already ahead: in February last year, for example, an Indian rocket launched a whole constellation of 88 Planet Labs nanosatellites in one go. And this January Rocket Lab successfully tested its low-cost launcher in New Zealand: its rocket engines are 3D-printed and the company is licenced to launch every 72 hours (prices start from a mere $100,000 per nanosatellite).
In the face of such dynamic and strong competition in the years ahead, there might well be a case for an increased government role in supporting UK space. As Patrick Wood said, “We have the ambition and drive to grow further in the UK space industry but the rest of the world are very ambitious and I can tell you they are very active.” He also stressed that “more UK national missions would further stimulate growth here in the UK.” And a few days after the Policy Exchange event UK space industry released its new Prosperity From Space strategy calling for a “National Space Programme” and more public procurement in space. In this sense, a big project such as an UK alternative to Galileo could well be the best thing that will have ever happened to Britain’s space sector.
There is likely a wider significance to these kinds of noises from industry, however. They are a reminder that as the space domain enters a period of radical transformation we also need to take space much more seriously across the policy-making community, starting with Westminster. A mercantile, business-only policy focus only goes so far; perhaps the time has come to add a strategic element to how we approach space and to acknowledge UK space power as a key dimension of national power in the 21st century. At the moment, for example, the UK National Space Policy only recognises that “space is of strategic importance… because of the value that space programmes deliver back to public services” (author’s emphasis). This is an incomplete vision in a world becoming ever more dependent on space technologies both economically and security-wise. As Air Marshal Stringer, head of Joint Force Development, reminded the Policy Exchange audience, “97% of all military activity at some point has space in it”.
While Britain excels at niche and high-value-added capabilities, other countries – from the US and France to Russia, India and Japan – possess full-fledged space programmes and extensive sovereign space capabilities, including military. Apart from security advantages, this gives them increased influence in the space diplomacy shaping the emerging international outer space regime. Vastly more crowded orbits – supporting mega-constellations – and hundreds of billions of dollars worth of space activities by scores of countries will very soon require global regulations and standards that will in turn affect space economies like Britain’s. Both UK commercial and national security space interests will require protection; but the correlation between traditional “terrestrial” power and influence and space power is not direct. As it steps into this next age of space, Britain will need to get its approach right from the beginning – and seek to close the space power gap with the world’s space leaders as soon as possible.
In 2014 David Willetts, the then science minister, spoke of the “very distinctive British model in space” which has traditionally favoured excellence in small satellites and a “lean national space agency” acting as a “convener” for industry, as well as promoting space research and developing key technologies. The increased activity of recent years – from Tim Peake’s Principia mission to the current focus on UK Launch – is very welcome and producing good returns, yet it is still framed within the old model.
Today there is an increasingly strong case for a wholly different level of national ambition in space. Inevitably, talk of new national space projects always prompts the question of whether Britain can afford to play an expensive game of space power. But considering what space will mean in the next couple of decades globally, the real question is: can it afford not to?