Written Evidence Submitted by the University of Strathclyde

(SPA0029)

 

Written by Prof Malcolm Macdonald and Dr Steve Owens.             

 

1.           About

1.1.      Founded as a place of useful learning, the University of Strathclyde is an international technical university. Its mission is to make a positive difference to lives of students, society, and the world. The university is located in the Glasgow City Innovation District, a global hub for entrepreneurship, innovation, and collaboration.

1.2.      University of Strathclyde is home to one of the largest space engineering clusters in Europe, providing access to a wide range of technology developments and expertise. Space activity is embedded across all four university faculties with collective space cluster leadership provided from the Aerospace Centre of Excellence, the Applied Space Technology Laboratory, the Space Mechatronic Systems Technology Laboratory (all in the Faculty of Engineering), and the Centre for Space Science and Applications (in the Faculty of Science).

1.3.      The Applied Space Technology Laboratory (ApSTL), is addressing global challenges by working at the boundaries between disciplines to deliver a step-change in the democratisation, exploration, and exploitation of space.

1.4.      Professor Macdonald is Director of ApSTL, and a visiting professor at University College Dublin’s Centre for Space Research. He is a non-executive director at Weather Stream Ltd., a weather data analytics company. He is a former non-executive member of the UK Space Agency Steering Board (2017 – 2020), and was Director of the Scottish Centre of Excellence in Satellite Applications from 2014 2020.

1.5.      Doctor Owens is a Knowledge Exchange Fellow in ApSTL, and CEO of Huli.Life, an outdoor adventure route planning company powered by space data and a spin-out from the University.

 

2.           Prospects for the UK’s global position as a space nation

2.1.      The UK enjoys a position of global leadership in the space sector, secured through our membership of the European Space Agency (ESA). Through ESA we gain access to many of the programmes that make space high-profile; from the Astronaut programme and the International Space Station, to conducting truly exceptional and exquisite science. ESA offers access to a depth and breadth of skills that the UK could not sustain within the current public spending settlement, and so is a vital part of the UK’s global position as a space nation.

2.2.      The UK currently lacks the depth and breadth of skills and resources to be a top-tier space nation. However, the UK does retain globally leading capabilities in specific aspects of the sector that makes it an attractive partner for international scientific and technical collaboration.

2.3.      In 2010, the Space Innovation and Growth Strategy (IGS) established a twenty-year vision for the UK’s space sector. This established the UK as a global thought-leader and has seen many countries emulate aspects of that original vision through significant government investment.

2.4.      Since 2010 the UK sector has outgrown the global space sector. However, much of this relative expansion occurred in the first half of the subsequent decade, in the immediate aftermath of the IGS. Growth in the second half of the decade broadly matched, or at times fell below global growth trends. Consequently, it could be concluded that the momentum, and thought leadership, gained from the IGS has not been sustained.

2.5.      The UK has a strong track-record of space start-up companies and leads the rest of Europe in attracting private investment into the space sector, but lags the USA, China, and others. The recent trend of space companies listing on the public markets via a Special Purpose Acquisition Company (SPAC) is a risk to the UK’s ability to sustain company growth as SPACs tend to be listed in the USA, risking movement of UK companies to the USA. For example, Arqit, a UK founded company has recently announced its plans to list on the Nasdaq, in New York City.[1]

2.6.      The UK appears to have broadly stabilised its global share of the space market in recent years at just over 5%. It therefore appears highly unlikely that, without significant near-term government investment, the UK will achieve its stated ambition of capturing 10% of the global space economy by 2030. Without a clear strategy to direct significant near-term government investment we can expect to sustain a similar level, or indeed as other nations invest more a reduced level, of global market share thanks to the emergence of strong private investment into the space sector.

 

3.           Strengths and weaknesses of the current UK space sector

3.1.      The UK has a distinctively broad-based space sector, with a diverse set of capabilities underpinned by a world leading academic community. It is also predominantly commercially-focused, with a growing but still smaller than globally-average public sector. The sectors commercial income is dominated by Direct-to-Home (DTH) broadcasting, a steadily decreasing market. Growth is strong in others areas of the sector, with non-DTH space-enabled applications driving the majority of growth, and outpacing the decline in DTH.

3.2.      The industry contains over 1200 organisations[2]. However, only 132 generate space income of over £5M, and a handful are responsible for the vast majority of income, giving the sector a very long tail of SMEs. Consequently, sector growth, when measured in value, appears concentrated amongst very large enterprises and in larger SMEs. This can result in smaller, often newer, and often highly innovative businesses feeling omitted from consideration and support, with sector support skewed towards more established companies.

3.3.      The sector appears R&D intensive: investment has grown at >8% per annum since 16/17 and today is five times more intensive than the UK average2. However, R&D investment has not kept pace with the growth of the UK average, the sector was six times more intensive than this average in 16/17[3].

3.4.      The commercial nature of the sector appears to distort the nature of R&D investment, towards the mid- to high-Technology Readiness Levels[4] (TRL). Consequently, the sector is under-represented and under-active in the lower TRL range, in fundamental research. This predisposition is repeated throughout the sector, in its representations and its governmental support with, for example, a tendency to focus on the commercially valuable outputs of the innovation pipeline rather than the inputs. This has created a disconnect within the sector.

3.5.      The sector is a significant importer and exporter of goods and people, and heavily integrated to European supply chains for both. Labour productivity (average GVA per employee) is over 2.6 times the UK average. Moreover, the sector is highly-skilled, with 77% of employees holding at least one degree2.

3.6.      Unusually for such a high-skilled sector, it has a notable footprint in all four of the UK’s nations, with notable concentrations in Scotland, London, South East and East of England. Despite this, sector support mechanisms remain very focused on the south of England (along the M4 corridor) with those from further afield expected to be able to frequently travel long distances. The removal of this cost overhead (fiscal and time) through the COVID-19 pandemic has not only highlighted this cost to those who were incurring it, but also that things can be done differently, more efficiently and sustainably, and in a more equitable manner.

3.7.      Access to Horizon Europe, the Copernicus Programme, and other space-related activities secured through the EU-UK Trade and Cooperation Agreement has mitigated the impact of Brexit on the sector. However, restrictions within these programmes placed on third countries will create challenges for the UK’s space sector, and corresponding gaps in the R&D funding landscape. Within the UK some space, and in-particular space engineering R&D, for example, astrodynamics, is not funded by UK Research and Innovation, nor any alternative.

3.8.      Given the previous heavily integrated nature of the sector across Europe and the UK, our exit from the EU is both amplifying extant recruitment difficulties[5], and making it more challenging for UK nationals to gain wider professional experience. As such a new skills development strategy is required to ensure the UK reaches its full potential.

3.9.      Over the last decade the UK has become a global leader in the so-called new space[6] sector with, for example, Glasgow building more spacecraft than anywhere else in Europe. However, the rest of Europe, and further afield, is investing and is catching up.

3.10. The UK accounts for significantly more so-called new space Earth observation companies than any other ESA member state, with around 22% of the new space Earth observation companies in ESA member states. With these companies, the UK accounts for around 23% of employment, with a 17% market share. By comparison, Germany accounts for around 15% of new space Earth observation companies in ESA member states, but 22.5% employment, and 26.5% market share[7].

 

4.           Lessons learned from previous space strategies

4.1.      Space is an inter-disciplinary sector that draws on a very broad range of skills and capabilities, all of whom correctly identify as part of the space sector.

4.2.      The UK’s broad capabilities in the sector has at times led to equally broad strategy statements, and what might be considered a lack of focus within these strategies for fear of disenfranchising parts of the sector. This lack of focus and the broad strategy statements can serve to postpone difficult decisions, resulting in deferment of delivery and allowing competitor nations time to invest against the thought leadership developed in the strategy.

4.3.      Broad inter-disciplinary, integrated strategies are attractive and can deliver very meaningful impact. However, they require strong system level integration, to avoid the creation of silos, and to be backed up with investment that enables delivery.

4.4.      Equally, the generation of a strategy is a massive amount of effort and care is required to ensure that simply creating a strategy is not viewed as the success, but is instead the start of the delivery process. A government entity, led by a Minister should be held accountable for delivery of the government’s strategy with progress updates delivered at least annually, or in line with budget announcements, to parliament.

4.5.      A key element of any national strategy is to review and deliver the correct support, policy, and regulatory structures. Such changes can be viewed as ‘zero cost’ as they do not incur a need for new cash investments beyond current spending plans. However, delivery of these cannot be viewed in isolation and care should be taken to ensure delivery across a strategy rather than to focus on the more easily achievable elements.

4.6.      Correspondingly, a strategy must be deliverable in the whole and so in the absence of unlimited budgets it may be required to use the system level integration of the strategy to ensure correct focus areas at the correct time.

5.           Aims and focus of a new UK Space Strategy

5.1.      Space is, almost by-default, a dual-use environment. The Ministry of Defence, aided by the outcomes of the Integrated Review of the UK's foreign, defence, development and security policy, has made significant steps towards re-establishing a sovereign, defence space capability. Much of this, by necessity as well as logic, builds on prior UK civil investment, and logically future developments should pre-emptively seek out such civil-defence synergies.

5.2.      Around 95% of global space revenues are for the space-for-Earth economy. Consequently, this will form a core element of future UK space strategy. However, space-for-space should be viewed as an emerging economy, and as such considered an area of future growth potential. This will include human exploration in and beyond low-Earth orbit, as well as in-space manufacturing, spacecraft-to-spacecraft services, and even data exploitation.

5.3.      The UK is a founding member of ESA. The purpose of ESA is dedicated to the exploration of space, and specifically to activities that member states could not do alone. Therefore, by definition, ESA allows the UK to undertake space activities it could not do alone. Furthermore, through our membership of ESA the UK gains access to a breadth and depth of skills and resources that would take the UK decades to develop. Securing, and growing our investment into ESA, and therefore taking an increasing leadership role within the Agency should be a key focus of the new UK space strategy.

5.4.      A key development since the Space IGS has been the significantly improved access the sector enjoys to private investment. As such, short to medium term returns and/or low-risk activities should now be transitioned to the private sector, with a transition of the governments risk posture towards investment in longer-term and/or higher risk activities. This transition should also seek to encourage the development of commercially viable, and scale-able products and companies.

5.5.      The tendency for government to issue grants, rather than contracts, hinders company growth. The strategy should seek to ensure government can act as a customer to the space sector, supporting both the creation and delivery of new services for the government customer within a single contract. This is analogous to the approach taken in competitor nations, and supports the development of commercially viable, scale-able products, and investable companies.

5.6.      The strategy should seek to develop a balanced sector that is not dominated by a small number of companies, and should seek to ensure the removal of structural geographical biases in the sectors support mechanisms, for example, through adoption of a digital first (rather than in-person or hybrid) approach to sector briefings.

5.7.      Academia needs to be viewed as a key enabler and core part of the sector that is integral to future growth. Further recognition should be given to the value of basic research as the pipeline of future commercial innovations, and that engineering science underpins the technical innovations of the future. To this end, steps should also be taken to encourage an increase in sector engagement in low-TRL research and consideration given to how academia might better support government with the identification of longer-term opportunities. This could include, for example, secondment into the civil service.

5.8.      The new strategy should seek to resolve long-standing discrepancies in the funding of basic research, and ensure all space related research, including space engineering topics such as astrodynamics are eligible for funding from UK Research and Innovation.

5.9.      Companies, colleagues, and universities should be encouraged to better engage on future skills needs, and to work collaboratively to support and accelerate on-going efforts to diversify the sector such that it better reflects the people and communities of the UK. Frequently, skills and diversity are fringe topics within the sector, of which warm words are said but somehow are never quite the immediate priority of the day. The strategy needs to find a means to allow companies, colleagues, and universities to collaboratively invest in this area and to integrate it with every day business priorities.

5.10. It could be perceived that Earth observation continues to underdeliver on promised commercial potential. The new space Earth observation sector lags the rest of new space in the UK. However, in Europe as a whole the new space Earth observation market is significantly outperforming the rest of the Earth observation sector, with a CAGR of 7.6% from 2013 – 2018, against an Earth observation sector wide CAGR of 1.7% in the same period. The UK has established a track-record of company creation but has failed to scale those companies, with market share significantly below pro-rata levels in comparison to other ESA member states7.

5.11. Earth observation needs to look beyond its traditional core community, to engage with more established aspects of the new space community such as small satellites, and to engage with adjacent technology sectors where the UK also has significant strengths.

5.12. The space sector needs to better engage with adjacent technology sectors, both in and outside government. For example, the space sector strategy should be complementary to the Geospatial Commission’s strategy. This type of integration was the motivation for the creation in June 2020 of the National Space Council, however it is likely that support will be required from academia and industry to deliver it.

5.13. Finally, for space to deliver its promised potential it needs to transition to an outward looking, underpinning sector of the economy that is ubiquitous across a vast range sectors in a similar fashion to things like artificial intelligence, communications, and data analytic. The UK’s space strategy needs to enable this transition.

 

6.           An appropriate, resilient & future-proofed space and satellite infrastructure

6.1.      The UK could, should it choose to make the required public policy and fiscal choices and priorities, deliver a resilient and future-proofed space infrastructure without the need for international collaboration. However, the fiscal cost of this, coupled with the lead-time to develop the sovereign resources and skills required to deliver this, has so-far proven to be prohibitive.

6.2.      The UK already enjoys a position of global leadership in weather forecasting through the Met Office, and our memberships of both the European Centre for Medium-Range Weather Forecasts (ECMWF), and the European Organisation for the Exploitation of Meteorological Satellites (EUMETSAT), which provide direct access to comprehensive meteorological data from space and World-leading research capabilities. International collaborations such as these and the European Space Agency are vital.

6.3.      To secure resilient and future proofed satellite infrastructure, that can support the UK’s critical national infrastructure, needs an integrated approach. This should be developed by moving beyond consideration of services such as navigation, timing, communications, and Earth observation as separate. Instead, a combined civil – defence, public – private approach should be taken to develop a heterogenous space enterprise that provides reliable access to a broad spectrum of information and services in an opportunistic environment by integrating government owned and commercially provided services.

6.4.      The development of this integrated enterprise should also be able to nurture and service the emerging space-for-space economy as that grows, and domestic critical national infrastructure needs should not be assumed to be located only on Earth.

 

 

(June 2021)

 

 


[1] https://spacenews.com/arqit-raising-400-million-with-a-spac-to-launch-quantum-encryption-satellites-in-2023/

[2] The Size and Health of the UK Space Industry 2020, know.space,
https://www.gov.uk/government/publications/uk-space-industry-size-and-health-report-2020

[3] The Size and Health of the UK Space Industry 2018, London Economics
https://www.gov.uk/government/publications/uk-space-industry-size-and-health-report-2018

[4] A method for estimating the maturity of technologies on a scale from 1 - 9. Broadly speaking, 1-3 are basic research, 4-6 are applied research, and 7-9 are technology development for operational deployment. See https://en.wikipedia.org/wiki/Technology_readiness_level 

[5] Space Sector Skills Survey 2020: Research Report, BMG Research, https://www.gov.uk/government/publications/space-sector-skills-survey-2020-research-report

[6] Defined herein as companies with a focus on ‘lowering the barriers of entry to the space industry’ and/orproviding cheaper access to space and more high-quality and affordable data.

[7] The state of Commercial Earth Observation, Size & Growth across ESA Member States, London Economics,

https://londoneconomics.co.uk/wp-content/uploads/2020/05/LE-ESA-State-of-Commercial-EO.pdf