The U.K. Space Industry
In its first year of operation, the U.K. Space Agency (UK Space) recently issued a report on the healthy British space industry. The report is very positive, which should give impetus to government regulators to treat this sector with tender loving care.
UK Space was set up in April and is in the midst of a transition aimed at becoming a full executive agency in the first half of 2011. Its structure replaces a somewhat unwieldy British National Space Centre (BNSC), which had been established in 1985 but only coordinated other government departments and had limited ability to direct U.K. civil space strategy.
Even before this transition, something obviously was being done correctly, as the space industry in the United Kingdom seems to be thriving. In November, UK Space reported that the British space industry grew “by nearly 8 percent through the recession and is now worth over 7.5 billion pounds [$12 billion] to the economy.”
This report, “The Size and Health of the UK Space Industry,” is updated every two years, and the latest report is based on a survey of 260 companies, divided into the upstream segment (companies that provide space technology) and the downstream segment (companies that use space technologies, such as satellite communications and broadcasting service providers).
The downstream segment is by far the largest and the most successful. In 2008-2009, that segment accounted for close to 90 percent of the overall revenue of the U.K. space industry (6.6 billion pounds out of 7.5 billion pounds) and all of the growth. The upstream segment — the companies that develop and build satellites — actually had lower revenues than the especially good preceding two-year period. Nevertheless, averaged over four years, the upstream sector did fairly well, with annual growth of 3 percent compared to the overall U.K. economy, which grew by 0.3 percent over the same period, according to the report.
Who is making all the money? The UK Space report identifies the key contributor to this growth as the continued expansion of satellite broadcasting. That service accounts for 68 percent of the total revenues and almost 70 percent of all growth over the last four years. Telecommunications sales represented 24 percent. That leaves about 8 percent “shared primarily between Earth observation, navigation and space science.”
It is not just revenues, however, as the space industry has a substantial “multiplier impact” on the country’s economy, according to UK Space. It estimates, for example, that the space industry employs directly about 25,000 highly skilled personnel, and through employment multiplier it supports altogether some 83,000 jobs.
In an annual report for 2010 issued before the industry health report, UK Space noted that about 70 percent of U.K. civil space investment is “channeled through the European Space Agency (ESA).” That annual report also notes that the United Kingdom “collaborates with most of the world’s space agencies and continues to forge new international partnerships.” That funding includes about 121 million euros ($160 million) to ESA’s Advanced Research in Telecommunication Systems program.
In its annual report, UK Space also highlights that the country is home to “the world’s largest global mobile satellite communications provider,” which is Inmarsat, and also is fostering a new generation of broadband satellites through the “Highly Adaptable Satellite (Hylas) … designed and built by Astrium for Avanti Communications.” The first Hylas satellite was launched in November, a few months after the UK Space annual report was published.
Europe has been fostering the Galileo satellite navigation system quite substantially, and in this area as well, the United Kingdom is contributing. The UK Space annual report says that British company Surrey Satellite Technology Ltd. (SSTL) was chosen to supply 14 navigation payloads for the deployment phase of Galileo.
You will not find the words “regulation” or “law” anywhere in these two reports, but one must assume that news of a highly successful industrial sector that contributes to important government goals should have some impact on regulators. The UK Space annual report says that 2009-2010 was the “Year of the Launch.” During the transition from the BNSC to UK Space, officials were seeking to raise the profile of space “in order to share the enormous benefits that space research and technology brings to us all.”
The industry has got to like such efforts. Let’s hope the regulators hear the same music.
Gerry Oberst is a partner in the Hogan Lovells Brussels office.