Written Evidence Submitted by Lockheed Martin UK

(SPA0050)

 

  1. Lockheed Martin UK (LMUK) is a wholly-owned subsidiary of Lockheed Martin Corporation.  It employs approximately 1,800 people across the defence, space, and civil sectors.  Lockheed Martin spends on average £1.6 billion each year in the UK, supporting over 1,000 British companies (80 per cent of which are SMEs), and 20,000 jobs.

 

  1. Lockheed Martin is the world’s largest space company.  For civil, commercial, military, and national security applications, it develops systems for earth observation, weather and remote sensing, human and robotic exploration of deep space, communications, surveillance, navigation, missile defence, and strategic deterrence.  Lockheed Martin has built over 880 satellites, designed over 310 space payloads, and supported every NASA mission to Mars.

 

  1. In the UK, Lockheed Martin is part of Team Athena, the new national space team including CGI, Inmarsat, and Serco.  Team Athena aims to grow and diversify the UK’s space sector.  Lockheed Martin is also supporting the UK Space Agency’s (UKSA) commercial spaceflight programme, LaunchUK.  It is leading a team to deliver the first vertical space launch from British soil in 2022.  This includes developing a commercial spaceport in Shetland (Scotland), bringing a viable launch vehicle to the UK, building a platform that can carry six CubeSats, and demonstrating the utility of small satellites for a wide range of missionsFinally, Lockheed Martin is exploring opportunities to invest in the UK, aligned to major national programmes such as the Skynet 6 military satellite communications programme, and the potential Space-Based Position, Navigation and Timing Programme (SBPP).

 

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

 

  1. Whilst the UK’s spending on space activities has grown by over 48 per cent in real terms since 2008,[1] the UK has consistently spent less than other advanced economies (see Figure 1 for latest comparison of country spending).  The U.S. continues to be the largest investor in space (58 per cent of the world total), followed by China, France, Russia, and Japan.  The UK’s space spending is estimated to be approximately 0.014% of GDP.[2]  The majority of this spending is allocated to the European Space Agency (ESA).[3]

 

  1. The trade association for the space sector, UKspace, has commented that, in addition to higher levels of investment, ‘other nations have major space programmes which secure their national interests. The USA, Japan, France, Germany, Italy, India, and Australia all have established national space programmes focusing on specific areas of capability and expertise. The UK should be taking the same approach’.[4]  Analysts have assessed that the gap between emerging and mature space powers has grown significantly over the last decade, and threatens to grow even larger in the next, especially as the Covid economic fallout might force emerging countries to re-evaluate, cancel or postpone their space investments...’.[5]

 

 

Figure 1: World government expenditures for space program (2020)[6]

 

  1. The UK had stated an ambition to grow its share of the global space economy to 10 per cent by 2030.  The latest figures show that the UK’s share has remained at 5.1 per cent since 2016/17;[7] even taking into account foreign exchange fluctuations and other factors, there has not been significant growth.  Over the same period, export intensity declined from 37.4 per cent to 35.5 per cent.[8]

 

  1. To date, the UK has developed specialist areas of onshore industrial and academic capability.  These are largely focused on scientific instruments, sub-systems and components of upstream systems, and aspects of downstream applications (principally data exploitation, and location-based services).[9]  This is evident in the UK’s participation in internationally-led space exploration missions.  For example:-

 

    1. As part of NASA’s Mars 2020 Perseverance Rover mission (2020 to date), for which Lockheed Martin built the aeroshell and other aspects, a British company produced the parachute fabric that enabled the landing of the rover on Mars; Imperial College London is co-investigator of the Mars Oxygen ISRU Experiment (MOXIE) payload, which produced oxygen from Martian atmospheric carbon dioxide; Imperial College London and the Natural History Museum are assessing the planets geological features; and Teledyne e2v has provided image sensors for mineralogy analysis; and

 

    1. As part of NASA’s InSight mission (2018 to date), the lander, which was designed and built by Lockheed Martin, carried three microseismometer sensors developed by Imperial College London.  The sensors were integrated with electronics built by the University of Oxford, supported by the Science and Technology Facilities Council (STFC)/Rutherford Appleton Laboratory (RAL).

 

UK involvement in international space exploration missions could increase, if the Government encourages more inward investment and manufacturing by those international primes that lead or play principal roles in such missions, notably NASA’s missions.

 

  1. The lack of an end-to-end upstream capability in the UK (satellite manufacturing and integration) is notable compared to other countries.  This is important, as downstream services and applications are built on this.

 

  1. The prospects for the UK’s position as a global space nation therefore depend on the level and focus of funding for the sector, how that funding is provided to industry and academia, and new international partnerships.  In particular, the Government needs to consider:-

 

  1. The balance of spending through ESA versus a national programme;

 

  1. What larger-scale upstream systems to fund, including for satellite manufacturingCurrently, the Ministry of Defence’s (MoD) Skynet 6 military satellite communications programme is the only large-scale funded space procurement in the UK.  The business case for SBPP is due later this year.  Larger-scale systems can be used to attract inward investment, growing and diversifying the manufacturing element of the UK’s space sector in ways that complement rather than compete with existing production lines (including in other countries, therefore providing export opportunities);

 

  1. How larger UK programmes can add value to international partners, who are considering how to improve the performance and resilience of their own systems through ‘hybrid’ or ‘layered’ architectures (i.e. multiple assets in different orbits),[10] and have stated ambitions to work closely with allies on this.  For example, rather than replicating existing Global Navigation Satellite Systems (GNSS) in Medium Earth Orbit (MEO), SBPP could be used to provide sovereign systems in other orbits, which complement the systems of allies (such as GPS).  LaunchUK could also be of interest for a wide range of international industries, given the UK’s unique location which provides access to certain orbits; and

 

  1. How to diversify its industrial base, with companies that will provide inward investment, provide access to new international markets and supply chains in order to increase exports, and offer markets for SMEs.

 

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

 

  1. The UK has been able to develop specialist areas of expertise, some of which are described in paragraph 7.  Public funding has also been used to invest in some enabling infrastructure, such as the National Satellite Test Facility (NSTF) for the assembly, integration, and testing of space payloads and satellites.[11]  Finally, the UK is seeking to establish a competitive regulatory framework (see paragraph 16a).

 

  1. However, the space sector does face challenges:-

 

    1. Most funding is channelled through ESA, yet many companies and academic institutions are not familiar with ESA programmes and funding mechanisms, or struggle to access them (including SMEs).  The programmes tend to be dominated by a small number of organisations.  They often are not aligned to national priorities;

 

    1. The UK lacks diversity and scale in onshore satellite manufacturing, including at prime level.  This impacts competition and innovation, levels of R&D spending, and limits access to international markets, particularly for SMEs.  The UK has the opportunity to use national procurements, such as Skynet 6, to attract inward investment (see paragraph 9b); and

 

    1. The sector is largely expected to operate on a commercial basis.  However, space industries in other countries receive greater direct support from their governments.  The UK Government should act more as an “anchor customer”, or at least explore innovative ways to underwrite risk across the lifecycle of technology development and missions.

 

  1. In relation to national-level research and investment, the space sector faces similar issues to others.  These have manifested themselves in the nascent National Space Innovation Programme (NSIP).  They include, but are not limited to:-

 

    1. A lack of incentive to participate in government grant schemes, due to low overhead recovery rates, and the de-minimis support levels for projects (even though the Research & Development (R&D) project costs for space are often higher than other sectors);

 

    1. No option for 100 per cent grants for fundamental and early stage research, where the commercial returns are uncertain or very long-term;[12] and

 

    1. A focus on early stage research at the expense of development and demonstration, which hinders pull-through and exploitation.  The space sector is particularly dependent on the demonstration of technologies in the orbital working environment, and suffers from very limited availability of grant support for this phase of development and innovation.  Closely related to this, whilst the UK often focuses on R&D and innovation projects, there is a gap in support for UK-based production and manufacturing of the resulting technologies at scale;

 

    1. Multi-phase R&D projects, as part of which each phase is small and needs to be retendered.  This disincentivises participation by businesses, as the totality of funding available is unclear, and the retendering requirements are onerous.  Related to this, governmental financial year accounting practices, which are based on annualisation of commitment and cash spend, frequently impact the effectiveness of grant schemes, by distorting planning, execution, and efficiency of long-term projects undertaken by industry and academia.  Where match funding is required by grant support schemes, industry also often does not get sufficient notice to identify and plan this; and

 

    1. Lack of alignment between R&D projects and broader national programmes or ambitions, to enable pull-through and exploitation.

 

  1. The proposed new subsidy control regime could be used to address these issues for the space sector.[13]  It could adopt differentiated allowances for overhead recovery, raise de-minimis thresholds for supporting research and innovation, allow 100 per cent grants, and plan subsidies over multi-year timeframes.

 

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

 

  1. LMUK would highlight three examples of best practice, from which the UK could learn:-

 

    1. Australia’s Civil Space Strategy 2019-2028, which sets out seven national civil space priority areas.[14]  Each area is supported by a specific technology roadmap (for example, the Communications Technologies and Services Roadmap 2021-2030).[15]  In other words, Australia is clear about its large-scale and long-term technology priorities, timelines, and funding mechanisms.  This allows industry to make business cases for investment, including in relevant R&D;

 

    1. Germany’s space strategies have consistently supported a company’s (OHB) space aspirations, in order to create an additional satellite manufacturing prime; and

 

    1. The U.S. National Space Council has a Users’ Advisory Group, to provide a means for industry and others to provide specialist input to policies, laws, regulations, and programmes.  A similar approach should be adopted in the UK.

 

What should be the aims and focus of a new UK Space Strategy, including considerations of technology; skills and diversity; research funding, investment and economic growth; industry; civil and defence applications; international considerations and partnerships; place; current regulatory and legislative frameworks and impact on UK launch potential; and impacts of Low Earth Orbit on research activities.

 

  1. In addition to previous comments in this submission, LMUK recommends that a new National Space Strategy:-

 

    1. Establishes a better balance between ESA and national funding/programmes.  This should include increasing and reforming national funding mechanisms, and ensuring ESA programmes are better aligned with UK priorities;

 

    1. Confirms and funds strategic, meaningful scale national programmes for civil and defence purposes, such as SBPP.  SBPP needs Ministerial leadership and momentum, to underpin a broader National Position, Navigation and Timing Strategy (PNT);

 

    1. Ensures space programmes support cross-departmental requirements, rather than just meeting the needs of an individual department.  For example, LaunchUK could support aspects of the requirements for Skynet 6 and SBPP;

 

    1. Increases confidence in the delivery of space programmes, as other countries are delivering their programmes with greater clarity and pace than the UK.  The UK needs to develop an effective programme delivery organisation for space;

 

    1. Encourages inward investment through public procurement, to diversify and grow the upstream manufacturing element of the space sector.  This would allow easier application of new technologies to satellites, operations, and services in the UK (such as quantum, Artificial Intelligence, etc); increase onshore R&D; and allow greater international reach, and therefore supply chain and export opportunities; and

 

    1. Prioritises and funds new international partnerships and associated programmes, where the UK can add value.  The Five Eyes partners should be a priority.

 

  1. The Committee specifically asked about regulatory/legislative frameworks, their impact on UK launch potential, and the impacts of Low Earth Orbit (LEO) on research activities.  From LMUK’s perspective:-

 

    1. The space sector remains concerned that the draft Spaceflight Regulations 2021 do not provide sufficient clarity in respect of operators facing unlimited or uncompetitive liabilitiesThe Government should introduce a mandatory cap on liability (other countries have specified competitive caps on liability in their equivalent legislation), and review the new liabilities created in relation to third parties.[16]  It should also focus on securing Launch Site Operators and Range Services provider for spaceports.  These providers will require some form of financial support, as they are unable to make a business case for purely commercial investment at this stage, given that the UK market is not quantifiableFinally, the Government, and its proposed regulator, must ensure timely processing of licence applications; and

 

    1. It is unclear how the Government views the potential pipeline for LaunchUK, beyond the first ‘Pathfinder’ launch(es).  LMUK recommends that the Government consider how part of the requirements of national programmes, such as Skynet 6 and SBPP, could be supported by LaunchUK.  It also recommends that the Government explore the potential for the UK to create a global LEO economy’ for research and development in microgravity environments, by developing ‘earth return capsules’ as a service that, coupled with LaunchUK, would allow cost effective access to LEO for science and commercial missions.  This is particularly important, as the International Space Station is difficult to access, and will close later this decade.  Interest in the concept has already been expressed by the health and agritech sectors, which have potential requirements for experiments in microgravity environments.  The concept would also enable in-orbit manufacturing.  These examples show that better cross-government coordination of space requirements and programmes is needed.

 

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

 

  1. Delivering appropriate, resilient, and future-proofed space and satellite infrastructure will require:-

 

    1. The UK to have a more diversified space sector, which can only be achieved through inward investment.  This would enable competition and innovation, knowledge and technology transfer, and increase industrial investment in onshore R&D;

 

    1. Hybrid or layered space architectures for sovereign programmes, involving distributed assets in multiple orbits.  This could be done collaboratively with allies; and

 

    1. ‘Evergreen’ constellations.  Satellites will need to operate in constellations that form “self-aware, self-healing” networks, adapt to threats, and change missions through-life, aided by rapid reconstitution from indigenous responsive launch capabilities.  Software defined satellites and payloads will enable this, by allowing systems to be reconfigured on-orbit.

 

  1. Navigation.  SBPP is exploring ways to deliver satellite navigation and timing services to the UK from space, including to improve the resilience of critical national infrastructure.  It is part of a broader National PNT Strategy.  Specialist PNT expertise and skills globally are scarce, particularly for space-based PNT. Lockheed Martin assesses that the UK industrial base currently could provide 52 per cent of a system, based on a GPS reference architecture.  This could be complemented by knowledge and technology transfer, allowing UK companies to undertake more work over time, and developing skillsets of wider benefit to the space sector.

 

  1. Communication.  The provision of commercial satellite communications services is a large element of the global space market.  Through companies such as Inmarsat and Avanti, the UK already realises considerable revenues from this market segment.  New companies are also looking to access the satellite communications market from the UK (for example, Methera Global).  The inherently dual-use nature of satellite communications technology means that programmes such as Skynet 6 could be used to accelerate the development of technology in the UK, which could then filter to the commercial sector and give UK companies a competitive advantage.  In this respect, supporting the UK’s commercial satellite communications sector should be seen as part of the MoD’s Defence and Security Industrial Strategy (DSIS).

 

 

(June 2021)


[1] See Organisation for Economic Cooperation and Development (OECD), The Space Economy in Figures: How Space Contributes to the Global Economy, 5 July 2019, Section 22.

[2] See UKspace, & WPI Strategy, Securing our future in space, December 2020, pg. 10.

[3] See OECD, The Space Economy in Figures, Section 22.

[4] See UKspace, & WPI Strategy, Securing our future in space, pg. 10.

[5] See Euroconsult, Government Space Program: Benchmarks, Profiles & Forecasts for the next decade, 21st edition, December 2020.

[6] See Euroconsult, Government Space Program: Benchmarks, Profiles & Forecasts for the next decade.

[7] See know.space, Size and Health of the UK Space Industry 2020: Summary Report for the UK Space Agency, May 2021.

[8] See know.space, Size and Health of the UK Space Industry 2020.

[9] This is confirmed by know.space, Size and Health of the UK Space Industry 2020, which shows the biggest improvements in sector revenue came from scientific instruments, suppliers of materials and components (within the space manufacturing segment), fixed satellite communication services, and location-based signal services (within the space applications segment), pg. 17.

[10] Resilience is an increasing focus of international partners, given the wide range of risks to space systems and services.  These include natural hazards, space debris, and hostile activity.  Annual assessments consistently show that threats to space systems are growing, as more countries and non-state actors acquire counterspace capabilities, and employ them in more ways.  See Todd Harrison et al., Space Threat Assessment 2021, Center for Strategic & International Studies (CSIS), March 2021, and previous threat assessments from CSIS.

[11] NSTF includes clean rooms, as well as equipment for solar array deployment tests, payload integration, mass measurements, vibration testing, acoustic testing, a thermal vacuum chamber, and electromagnetic compatibility and antenna testing.

[12] Such a scheme could be analogous to the Horizon Europe ‘Research and Innovation’ programme elements, which are eligible for 100 per cent funding.

[13] See Department for Business, Energy and Industrial Strategy (BEIS) consultation, Subsidy control: designing a new approach for the UK, 3 February 2021.

[14] The civil space priority areas include PNT, earth observation, communications technologies and services, space situational awareness and debris monitoring, leapfrog R&D, robotics and autonomation on earth and in space, and access to space.  See Australian Government Department of Industry, Science, Energy and Resources, Australian Civil Space Strategy 2019-2028, April 2019.

[15] Australian Government Department of Industry, Science, Energy and Resources, Communications Technologies and Services Roadmap 2021-2030, December 2020.

[16] See Rt Hon Sir Ian Duncan Smith MP, Rt Hon Theresa Villers MP, and George Freeman MP, Task Force on Innovation, Growth and Regulatory Reform, May 2021, para. 475-477.