Inside Financial frontier
Why the UK’S space industry has such astronomic potential
Mention the space industry and most people think of huge rockets blasting astronauts through the atmosphere. That may be where the glamour is, but the UK has quietly made a name for itself in a less glitzy, but potentially more valuable line of work.
Instead of looking up to the stars, Britain has become a major producer of satellites looking down to Earth, an industry worth almost £14bn a year and employing 40,000 people.
The UK is reckoned to produce about a quarter of all large communication satellites. Britain is also good at making small satellites – 10cm cubed “boxes” that the miniaturisation of electronics has made possible.
What the UK lacks is the capability to launch craft into space. Britain is unique in that it developed its own space launch capability – the Black Arrow project of the Sixties and Seventies – then gave it up under pressure from the Treasury, having undertaken only one mission.
Last year’s Queen’s Speech laid out plans to develop the sector. The ambition is to create spaceports that would allow small satellites to be launched. This could mean traditional vertical rocket launches but is more likely to see “horizontal launches”: aircraft taking off from conventional runways, with satellites “piggybacking” on them, then, once at altitude, being launched into space high above the Earth. Such a system is cheaper than traditional rockets.
The legislation hasn’t yet caught up, according to Craig Clark, chief executive of small satellite business Clyde Space. “The current Space Act means that for launches there’s a massive potential liability cost. For a satellite that might cost only £50,000 you might need £60m liability insurance in case it hits another satellite – and that’s something I’ve never heard of happening.” In some other countries, governments cover the risk but Clark says high potential costs make it difficult to get insurance.
The Space Industry Bill hopes to address the issue. Launched last month, Jo Johnson, the Science Minister, said the Bill aimed to ensure “the UK remains a leading player in the commercial space age by enabling small satellite launch from UK spaceports … it will help make the UK the most attractive place in Europe for commercial launches.”
Key measures include licensing launches and creating a regulatory framework to cover operational insurance, indemnity and liability. Creating the environment in which Britain’s space industry can thrive is
‘We’re living in a very different world – where satellite communication is now considered essential’
key. Companies have had to be resilient and adaptable, with no national projects to support them in the way that countries such as the US have. This has forced Britain’s space industry to be commercially focused.
“It’s interesting the way the UK industry has developed over the past 50 years,” says Stuart Martin, chief executive of the Harwell-based Satellite Applications Catapult.
“We’ve developed in niches, such as small satellites, telecoms and applications for data, largely because we’re not participating in big national programmes like the rest of the world. Now that we’re seeing the shift to space being privatised, the UK industry is fantastically well placed.” In the US, privatisation is well under way. Oneweb plans to launch a “constellation” of almost 650 small satellites to provide worldwide broadband, offering connectivity in places not currently covered.
Elon Musk – who is already providing satellite launches through his Spacex business – is planning a similar constellation, while Amazon founder Jeff Bezos’s Blue Origin and Richard Branson’s Virgin Galactic have also entered the space race.
As technology becomes an increasingly bigger part of our lives, Britain is looking to tap the torrent of data that is being beamed down from Earth observation satellites. Agriculture and forestry, maritime surveillance, flood prediction, and autonomous cars all “present huge opportunities” for the world of data and applications, Richard Peckham, chairman of trade association UK Space, claims.
“We’re living in a very different world from just a decade ago; one in which satellite communication is now considered not peripheral or nice to have, but an essential part of the emerging global digital society,” a spokesman for Inmarsat says, pointing to GPS systems from satellites being part of every smartphone.
Whatever the Space Bill delivers, there is one cloud hanging over the industry: Brexit.
Leaving the EU could have implications for the UK’S role in the European Space Agency, though other non-eu nations are participants, so negotiation could retain access to and funding from this global industry power.
“The rhetoric from government is positive and there’s so much more money coming into the industry worldwide,” says Clark of Clyde Space. “We’ve grown at 40pc a year for five years and if the Government can make legislation fit for purpose that matches up to what they’re talking about the UK is in a great place.”