UK space sector pays big returns on financial and intellectual capital

The UK has become one of the leading nations apart from the US in civil space development, with the sector growing regularly at 10% per year, and contributing £7 billion per year to the country’s economy. More significantly for investors, the UK space sector generates a phenomenal £135,000 GDP per employee and a seven fold return on investment

Benefits for multiple sectors

Added to this are the spin off benefits, which often spill over into other sectors, usually when technology developed initially for observation or imaging in space turns out to have useful application on the ground. The most profitable recent case in the UK involved a detector of high energy gamma rays developed for observing remote explosive events in space, which was then adapted as a scanner for radioactive materials, for example to identify dirty bombs. This led directly to a $222 million sale to the US Department of Homeland Security.

“The UK has many areas of world-class expertise and we want to be an international partner of choice as the global market continues to expand

David Williams

Director General

BNSC

Paradoxically, the UK’s march to success began with a decision in the 1970s not to invest in the two areas then widely perceived to define the space sector – launch vehicles and manned space flight. Since then the UK has achieved leadership in several of the most important civil sectors, including meteorology, telecommunications, and navigation. Investment in space, particularly within the UK, has stimulated commercial developments in these areas, and led to recent innovations in mobile communications, according to David Williams, director general of the British National Space Centre (BNSC), the UK’s national space agency. The UK is now ready to step up and seize leadership in the field.

“The UK has many areas of world-class expertise and we want to be an international partner of choice as the global market continues to expand,” said Williams. “BNSC, bringing together the various UK Government and research interests in civil space, is at the heart of enabling this.”

Oxford: innovation hub

While the UK space sector has many branches, the focal point for inward investment is the Harwell Science and Innovation Campus near Oxford, according to Nathan Hill, founder and managing director of Qi3, the specialist marketing and business development service for technology businesses.

Harwell has exploited its legacy as birthplace of the UK’s nuclear industry to become the UK’s major campus for applied science development and technology transfer. “Harwell represents a prime opportunity for inward investors to co-locate facilities with the space sector and space academic research,” said Hill.

In order to be a major centre for space development it is not enough to have just the expertise and facilities – there also has to be a reputation for delivery, on time and to budget, given the sector’s mixed record in this respect around the world. On this count the UK really stands out, according to Phil Davies, business development manager at Surrey Satellite Technology Limited (SSTL), which has become the world leader in small satellites.

Harwell represents a prime opportunity for inward investors to co-locate facilities with the space sector and space academic research

Nathan Hill

Founder and Managing Director

Qi3

Davies cited the Disaster Monitoring Constellation (DMC) as a major success for the UK in this respect, attracting international acclaim for its role in the international response to a spate of recent catastrophes. “Through a modest UK government investment of £4.25m on the first satellite, SSTL has created an international partnership of six nations who work together to provide imagery for disaster response,” said Davies. “This system allows the UK to play a major role in the "International Charter for Space and Major Disasters" providing vital information following disasters such as Hurricane Katrina, the Asian Tsunami and, most recently, the Burma floods.”

Telecoms opportunities

But the broadest space-related inward investment opportunities lie within telecommunications, navigation and timing, according to Ian Gibson, director for Space Technology & Industrial Policy at the BNSC. Gibson pointed out that the UK had established a prominent role within Galileo, the next generation global navigation system developed by the European Space Agency (ESA). “The EU with ESA is investing a little over €3Bn in Galileo and approaching €2Bn in GMES (Global Monitoring for Environment & Security),” said Gibson. “Galileo will underpin the next generation of navigation, position & timing services, while GMES will generate an evolving database of multi-spectral imagery and other environmental information.

These infrastructure investments should be prompting entrepreneurs and investors to develop new services,” Gibson added.

As Davies noted, Galileo allowed the UK space sector to post another coup, by delivering the GIOVE-A satellite, built by SSTL, on time for Europe to lay claim to the frequency allocation for Galileo granted by the ITU (International Telecommunications Union).

Over a longer time scale the UK has an established reputation for reliability and delivery in the telecommunications space sector through Inmarsat, founded in 1979, now providing telephony and data services to remote locations worldwide through special terminals.

Given all this success, the story of UK space development seems like a well kept secret, but this is all about to change.