Written Evidence Submitted by Satellite Applications Catapult

(SPA0037)

              What are the prospects for the UK’s global position as a space nation, individually and through international partnerships;

In 2010, the UK published its ground-breaking Innovation and Growth Strategy for Space (the IGS), which has set the direction for the UK sector ever since.  The IGS was a collaborative effort between experts from government, industry and academia, and set out for the first time the strategic value of space as a driver for economic growth rather than a drain on public resources – previously a widely held view.  It enshrined ambitious new economic targets, and made the case for UK launch, continued investment in space science, and established a national focus on developing a new generation of space-based applications and services which would support growth across the economy. It was revolutionary, and the space community world-wide sat up and took notice to what the UK was doing.

A decade on we, have made great progress, but it is time for a new strategy. Other nations are also recognising the value of space, and we are falling behind the top tier nations. The UK is in the bottom half of the top-ten space-faring nations for national investment, and just outside the top 10 when adjusted for GDP[1].  To remain in that list of ambitious nations and challenge for a top five spot we must demonstrate commitment to staying strategic in our space thinking and back this with appropriate funds. 

Now is the time to raise ambition and make some bold moves if UK industry and society is to capitalise on the opportunities ahead.  The focus on applications and services has been tremendously successful, with an estimated £360Bn[2] (about 18%) of UK GDP now supported by space technologies.  However, this has exposed weaknesses in our contribution to space infrastructure – much of this economic activity is dependent on systems owned and operated outside of the UK, not even subject to UK regulation, and exposes us to concerns over security and resilience

This is not just about money.  Government can support in many ways, from regulatory interventions through to policies that open up new markets.  But we must find ways, as other nations have, for industry and government to come together to build the next generation of space infrastructure we will all come to rely on, whether that is for Position, Navigation and Timing (PNT), Earth Observation, Communications or something completely new.  The recent investment in OneWeb is an important step in the right direction, but there is much more to do.

By working together, we can develop long-run plans that will unlock industry investment, future growth, and benefits to earth.  We must accept, and even expect, some failures, if we are to achieve the most valuable outcomes.  We have demonstrated that we can attract companies to the UK for financing, but to get companies to substantially invest and develop here, we have more to do to ensure the UK is the best place to be. 

Space is naturally a global endeavour, and international co-operation continues to be vital if we are to maximise our opportunity.  The multinational nature of the larger space companies can help here, and we should think about how to foster collaboration in space, and opening up space markets, through future trade agreements.

To continue to thrive in space, the UK should:

1)      Double down on our successes:

    1. Regulatory and Legal Leadership:  Our regulatory environment is known for being progressive, but others are catching up fastTo continue to lead in this area we need to create a robust, yet agile and supportive, regulatory environment for innovative space missions.
    2. Financing : Over the past 10 years private sector investment in the space economy has exploded.  1000 space companies have now raised a total of $150Bn of equity investment, with the UK accounting for 6% of the global total[3] - second only to the US. The £70M Seraphim Space Fund, which the Catapult helped set up with the BBB, was the world’s first dedicated space venture fund and has been fantastic for the UK.  It has invested in some of the best space business and helped many companies start in or move to the UK.  Government and industry must challenge each other to take more long-term risk and work in creative ways such as government investing and generating a return for this to remain the case. 
    3. Existing assets: On the ground we have internationally famous sites such as Goonhilly and the spaceports.  In space we have strong communications assets through companies like Inmarsat and now OneWeb, and other science assets.  These should be exploited to their maximum, both commercially and through intelligent government action. We do not believe this is happening yet.

 

2)      Target a small number of clearly defined areas for improvement

    1. Start-up to scale-up support: we have a great many innovative start-ups working with space technology.  The support structure for scaling these businesses up once they have achieved early market success, and then for long-term location in the UK needs improvement.  Funding is also a key part of this.
    2. National supply chain:  we have committed to spaceports and other space hubs across the UK and a levelling up strategy more broadly.  The supply chains necessary for these ventures to succeed are only now partially developed, and there is an opportunity here to develop broader participation right across the UK.  In fact, without doing this we risk a depressed future with launch sites failing to flourish.
    3. Establish a new strategic focus on becoming a global provider of critical space infrastructure.   We are doing well in communications, but for Position, Navigation and Timing (PNT) and Earth Observation we are critically dependent on other nations.  True independence is probably unachievable but being a leading part of a system of mutual dependence between trusted allies is a reasonable goal.
    4. Choose and stay focussed on one or two new global leading componentsA wonderful feature of space is the ambition and aspiration it inspires from toddlers through to senior leaders.  For the UK to benefit from that we must always have at least one far reaching, extremely bold plan that we are all behind and is measurably developing each year.

By making shrewd investment and development choices we will be able to lead in enough areas to ensure our global position, both as a valued partner and as an internationally leading space nation in our own right.  The advantages that this brings in skills attraction, inward investment and long-term head-quartering of businesses will ensure rapid payback.

 

              What are the strengths and weaknesses of the current UK space sector and research and innovation base;

We are world leading in regulation and policy and are second only to the USA in investment in the space economy.  Our start-up market is rich and varied, but struggles to populate the self-sustaining medium size enterprise area which is essential for growth.  We have a few institutionally focused large companies, closely linked to aerospace and often with their primary footprint outside of the UK.  We should work very closely with them, but not rely upon them to the detriment of other organisations.

We are world-leading in small satellite design and manufacture.  The agility and cadence afforded by an end-to-end national capability for small satellites (through design, manufacture, launch and operations) has been the result of concerted effort across, academia, industry and government and should be celebrated.  Our new spaceports now give us the opportunity to double down on this leadership to take the next strategic steps, moving rapidly to deploy the next generation of satellite infrastructure, complementing that which already exists, and enabling the emergence of In-Orbit Service capability, and ultimately In-Orbit Satellite Manufacturing (IOSM). 

When considering the challenges that the UK faces in space we must acknowledge our failure hitherto to attract infrastructure builders and operators outside of the communications sector.  i.e. the people who are customers to our great manufacturers, and data providers to our applications and services industry.  This is a big gap (PNT is well known, but EO is also a major issue), and makes us (as a nation) fundamentally dependent on infrastructure provided by other nations.  There is not a fundamental reason for us NOT to be one of the infrastructure providers.  In fact, the OneWeb investment gives us that opportunity for future communications, and perhaps PNT.  Other serendipitous opportunities in EO should be listened out for.

 

              What lessons can be learned from the successes and failures of previous space strategies for the UK and the space strategies of other countries;

The 2010 IGS Strategy has demonstrated the value of setting ambitious goals that many don’t believe will happen.  However this is not a one-off.  We must continue to back the big bets until they are self-sustaining, and we must keep evolving the goals.  It is time to do this with a new focus, not least because it will bring a pipeline to the spaceports and allow for a high-quality supply chain to develop with confidence.

We need to get better at seizing opportunities when they arise.  The OneWeb transaction shows we can do it, but we have passed up many others over the years through the lack of certainty of success Furthermore, the noise around the OneWeb transaction brought negativity to what should have been something to mobilise around at pace.

Other countries have looked at the UK’s outcomes from IGS and have replicated them, especially in the area of space applications and regulation.  To maintain the hard-earned leads we must remain vigilant and agile.  Our position can easily be lost if we slow the pace.  A quick win now would be to focus on national needs and infrastructure.

 

              What should be the aims and focus of a new UK Space Strategy,

We should prioritise where our strengths lie to grow and generate sustainable capability in some key areas.

Regulatory activities: Publication this year of regulation and policy updates, as well as announcement of a regulation innovation group which holds responsibility for keeping the UK at the front of space regulation and policy on a quarterly basis. We will need to demonstrate continued leadership in policy and regulation for space sustainability and debris removal, and proximity operations. This is a strong market development lever for the UK and an area where progress lags potentialA visible, fast moving UK programme, including regulatory innovation, will help to raise the profile of the UK as the country that can enable these advances to happen and attract commensurate investment and economic growth.

Financing activities: A commercial focus for scale-ups to complement the VC funding that is being led by Seraphim.  The best companies are getting funded but the lack of other capital and competition in space sector funding means that organisations like Seraphim are able to pick the best business for their returns.  These are naturally on the typical 7-year investment cycle, leaving behind businesses with a longer-term revenue generation horizon, those requiring significant capital investment, and some other very good businesses that are not quite in the top tier on the table.  

A Patient Capital fund is proposed, of >£500M and able to invest for greater than 10 years before expecting a return.  The signal that this would give to the market would also start to bring the UK financial sector closer toward space, with potentially transformational outcomes.  This could be a critical enabler for space infrastructure investments, which would normally payback investors over longer time-frames than investment into applications and services.

Existing assets: We do not have meaningful EO infrastructure but we do lead the world in applications of EO data.  WE should develop our own systems now, before we find ourselves unnecessarily reliant on the missions of others.

The UK has invested in OneWeb.  A very forward looking decision, which was reached with much noise in the press.  With this first step towards a national space infrastructure we must ensure we make a success of it – getting behind it in the same way we did for a UK astronaut.

And we should supplement this with intervention where we have opportunity to generate rapid advancements.

Start-up to scale-up support: With such a vibrant start-up landscape resulting directly from those ambitious interventions in 2010 we have excellent opportunities to embrace start-up success and engage with companies to help scale effectively.  The support environment, including funding and regulation as well as access to high cost space manufacturing and test facilities does exist but needs to be rapidly expanded, and made more accessible nationwide.

National supply chain: it is essential that spaceport and spacehubs are enabled to work at a national level to develop their supply chains and pipelines.   Further support for them should be linked to the effort being put into supply chain maturation as well as pipeline support.

Becoming a global provider of critical space infrastructure: such as EO and PNT as well as communications.

Choose one or two new global leading components: IOSM is an area where UK is one of the leaders in the baby steps taken so far.  We must put a comprehensive plan around developing our in-orbit ‘agility’ and our related on-ground infrastructure to support IOSM.

We suggest the following no regrets moves are actioned immediately:

1: An ambitious Active Debris Removal (ADR) mission

Such a mission will be a visible marker of UK intentions towards space sustainability, although this mission needs to be more than a “me too” and go significantly beyond RemoveDebris, CleanSpace-1 and ELSA-d, to lead the market.  Importantly, the mission must accelerate regulatory and policy interventions that will both enable this mission and other opportunities based on close-proximity operations in space.  This can create some short-run advantage for the UK, as well as laying foundational capability for a new global In-Orbit economy with UK companies being the leading service and hardware providers.

 

2: Development of a low-cost robotic laboratory in space to support capability building at scale.

This will demonstrate automated and autonomous technologies, feature robotic arms, and enable operations for on-orbit servicing, debris removal and in-orbit assembly and manufacturing. This investment will advance technology, build capacity and capability, energise UK launch, and establish UK leadership in this critical emerging area.   Our capability will be much in demand by allies and friendly trading partners to keep the orbit environment safe.

 

3: Space-based solar power.

Take steps to ensure our position is this key net-zero development by: derisking key technologies (e.g. wireless power transmission, ground receiving capability), developing our UK role on the international stage by forming key international partnerrships quickly, provided regulatory leadership and back the critical UK supply chains (including space manufacturing infrastructure).

 

 

              What needs to be done to ensure the UK has appropriate, resilient and future-proofed space and satellite infrastructure for applications including: navigation systems; weather forecasting; earth observation including climate change; and communication (including broadband).

This is where the biggest change in approach and mindset is required.  Space infrastructure is not all the same.  Where it is straightforward to establish linear, end-to-end service chains from the space infrastructure owners to end users, then commercial arrangements work well.  The market opportunity is clear and identifiable, so business plans can be developed and investment justifiedThis is the case for communication services, and TV broadcast, and is an area where the UK performs very well.

However, where the service chain is very fragmented, for example with PNT and EO (including weather) systems the situation is different.  Here, the market opportunity is much less clear, and consequently the investment risk very much greater. At least initially, a greater level of public support is needed to get systems into operation.  This is where the UK has always been weak.  However, experience tells us that these are the systems most likely to achieve widespread economic benefit.

Current PNT systems are all state owned and operated.  GPS in the US, Galileo in Europe, Glonass in Russia, Beidou in China.  However, this does not need to be the case.

If we look at how the EO market has developed, then it too started with predominantly government funded systems – mostly for weather forecasting and for military and intelligence applications.  In the past 10 years, however, a number of commercial EO satellite operators have come to the fore.  The countries where these ventures have been successful (notably Maxar and Planet in the US, Airbus in France and Cosmo/Skymed in Italy) are those where the government has made the shift from procurers of systems, to procurers of commercial servicesSimilar ventures over the same period in the UK have failed because of the inability to secure early commitment from government as a customer to unlock venture investment.  As a consequence, our burgeoning satellite data applications industry – and its government customers – are now critically dependent on data providers from overseas.  This makes them very vulnerable.

What is needed is a new intelligent, and forward-looking approach to procurement of new space infrastructure. The essence of innovation is the convergence of capability and opportunity.  There is no point in developing the capability if we don’t have the means or appetite to seize the opportunity.  This will not only fix the issues of resilience we face in our existing systems, but will also enable the UK to take full economic and geopolitical advantage of the as yet unknown opportunities ahead.  Just 30 years ago, it would have been impossible to imagine the economic dependence we now have on systems like GPS.  Who knows what will emerge over the next 30 years?  We must be doing the research, and we must have the mechanisms in place to take advantage of the outputs.  Only then can we ensure we are masters of our own destiny.

 

(June 2021)


[1] “Measuring The Economic Impact of the Space Sector”, Background paper for the G20 Space Economy Leaders’ Meeting (Space20), OECD, October 2020

 

[2] “Size & Health of the UK Space Industry 2020”, UKSA, May 2021

[3] https://spacecapital.docsend.com/view/6d4z54dtrwmd8ihw