Written evidence from Satellite Applications Catapult (ISG 72)
The Satellite Applications Catapult is one of a network of Research & Technology Organisations (Catapults) established to foster innovation and accelerate the take up of emerging technologies. Our objective is to promote, develop and facilitate the commercialisation and advancement of the UK’s satellite applications industry. We act as a neutral convener across government, academia and industry, bringing together highly-skilled and multi-disciplinary teams to generate ideas and solutions in an open, innovative and collaborative environment. Through our wide range of facilities, platforms and laboratories we enable the best businesses, researchers and end-users to work together to develop new satellite-based products, moving ideas from concept to market.
1. What does the Government mean by industrial strategy, and what does the private sector want from one?
1.1 The Satellite Applications Catapult believes that the Government should have a clear industrial strategy to enable the country to capitalise on the key industry sectors that can drive economic growth, such as the space industry. We believe the purpose of an industrial strategy is to identify and champion those business sectors in which the UK has (or can have) world-class industrial capacity. This will create an environment in which those businesses have the maximum possible opportunity to succeed on an international scale. The selection should be at the sector level rather than individual companies to avoid the accusation of ‘picking winners’ that ultimately end up dependent on Government support to be successful. Government can also provide support through its procurement policies, for example, which will allow winners to come through and longer term attract investment. This will enable UK economic growth as they win contracts and increase jobs to support them.
1.2 The Space Innovation and Growth Strategy (IGS) brings together a partnership of industry, academia, UK Space Agency, Satellite Applications Catapult, Innovate UK and the Knowledge Transfer Network (KTN). This team is working together to identify opportunities and remove barriers to growth for the UK space sector. The team is working towards the IGS target of 10% of the global space market by 2030, which is estimated to be £400 billion. The UK space industry is already worth £11.8 billion[1] and has been growing by an average of 8.6% year-on-year since 2010. It directly employs 37,000 people and is estimated to support 115,680 jobs in total.
2.1 The Satellite Applications Catapult would like to see the Government continue to focus on its current interventions to initiate and promote economic growth, such as Innovate UK programmes, including the Catapult programme. Catapults are able to bring together the innovation from universities with the challenges that businesses are facing to increase commercialisation of the strong research base that we have in the UK and the ensuing economic growth. The new UK Research and Innovation (UKRI) will be able to benefit from the Catapult programme and its help to channel industry challenges into applied research.
2.2 There are a number of mechanisms that the Government could employ to promote growth and help companies that are not interventionist, such as effective procurement to aggregate demand and drive innovation:
2.2.1 If the government were to aggregate demand, and centralise procurement of satellite services (including for police forces and local authorities), then it would be able to reduce costs and act as a ‘launch customer’ for future satellite services, which would build capacity and capability for UK companies, all with very high export potential. Similarly, if the UK Government were to coordinate and support installation costs for Fixed Satellite Broadband, the combined demand for this could lead to a satellite operator committing capacity over the UK and allowing the Government to achieve its universal broadband service requirement much earlier than currently foreseen.
2.2.2 When procuring new services, Government must remain open to adopting new and emerging technologies as well as incumbent solutions. This requires close working with innovation agencies, such as Innovate UK and Catapults, who can all advise on emerging possibilities. For example, we are already providing advice to groups covering technologies, such as Unmanned Aerial Vehicles (UAVs) and highly resilient communications for emergency response.
2.3 In addition, the regulatory framework should ensure that regulation does not favour one technology over another. For example, the Government’s arrangements with BT Openreach have favoured incumbent technologies and impeded the roll out of satellite broadband – a highly viable alternative to terrestrial solutions. In the US, satellite broadband provides a real alternative, especially in remote areas. To ensure that companies have the freedom to innovate and alternative technologies are able to emerge, it is important that regulation is technology agnostic. That is, it does not provide incumbent suppliers with any more of an advantage than they currently have for being incumbent.
3. What lessons can be learnt from:
• Previous governments' industrial strategies?
• Other countries' attempts to develop industrial strategies?
3.1 The Satellite Applications Catapult has benefitted from a cross-party consensus on the need for an innovation programme, in the form of Catapults, and the promotion of space as a growth sector. This has enabled both the programme and the sector to progress as the political landscape has changed over the last few years.
3.2 The promotion of space as one of ‘Great Eight Technologies’ has helped improve alignment with Government departments and industry, as well as to attract inward investment, by opening up conversations with international partners.
4. What tensions exist between the objectives of an industrial strategy and the objectives of other policies, and how should the Government address these tensions?
4.1 There is a tension between the desire to support overseas development, through Official Development Assistance (ODA) programmes and the desire to build the UK commercial economy. These can be aligned however, through well-constructed ODA programmes which can build upon the capabilities of UK companies, to provide services to developing countries.
5. What are the pros and cons of an industrial strategy adopting a sectoral approach?
• Should the Government proactively seek to ‘pick winners’?
• What criteria should be used to identify which sectors are supported?
• Should the Government prop up traditional industries that it considers to be in the national interest?
• If not a sectoral approach, should the industrial strategy have a broader objective, such as improving productivity??
5.1 The Satellite Applications Catapult believes the Government should identify growth sectors to support and ensure that Government policies are supportive of those sectors. This sector focus enables industry, academia and Government to come together, as is the case in the space industry. Growth needs industry to be behind any Government initiatives to deliver on the anticipated creation of jobs and revenue in that sector. Catapults are able to bring the voice of industry to Government and help direct new initiatives.
6. Should the industrial strategy have a geographical emphasis?
• How should an industrial strategy link with devolution initiatives aimed at devolving taxation and decision making away from Westminster?
• What examples are there of interventions from central Government that have successfully supported economic growth away from London and the South East of England?
• How should the industrial strategy work with local authorities and Local Economic Partnerships, reconciling a U.K.-wide strategy and local, regional and devolved nations' priorities?
6.1 The Harwell Space Cluster is a good example of the importance of place. There are now 68 space organisations at the campus employing over 700 people, including public organisations such as RAL Space, offices of space majors such as Airbus and SSTL, inward investors such as Lockheed Martin and Elecnor Deimos and new start-ups such as Oxford Space Systems and Rezatec. The Satellite Applications Catapult is a key attraction for many of the organisations looking to set up at the campus as it provides a central place for networking and collaborating. The Catapult is working with other organisations, especially the UK Space Agency, to develop similar clusters for innovation is satellite applications in other regions of the UK.
[1] London Economics ‘Case for Space 2015’