A new report shows the UK continues to rocket ahead of the EU on space investment
Since 2015 the UK has been second only to the US in attracting UK & global investors
Yesterday 14 May 2023 the UK Space Agency published a report produced by PwC on the vibrant UK space sector, revealing it is worth £17.5 billion involving over 1,500 space companies.
This report shows clearly why the EU is so keen to drag the UK back into its own space programme, which is exorbitantly expensive and more than 15 years overdue.
According to the research
“Think ‘space industry’, and you might be forgiven for thinking of astronauts, rocket launches and the tourism ventures of billionaires. It is less recognised for its significant role as the ‘hidden utility’ underpinning our daily lives and economy, supporting an estimated £370bn of UK GDP every year.”
- PwC report for UK Space Agency, 16 May 2023
The key to understanding the numbers is to understand just how many businesses are involved in derivatives of the space programme, from GPS to monitoring the climate.
Last year £635 million was invested in UK-headquartered space companies through 34 separate deals. 77% of the total amount being spent on space programmes comes from the private sector.
The UK’s space sector
- The UK is the most attractive global destination for private investment in space after the US
- Nine of the largest UK venture capital firms have invested in space since 2015
- Key areas of investment in the UK are Earth observation, manufacturing and satellite connectivity
- Growth of up to 11% is forecast per year to 2030 across the global space ecosystem
- 95% of space investments were in revenue-generating companies in 2022 compared to 56% in 2015
[Source: PwC / UK Space Agency paper, May 2023.]
No wonder the EU wants the UK to re-join its own space programme
It’s no wonder the EU is so keen to drag the UK back into its bloated and bureaucratic space programmes, which are many years overdue in all of the targets. Below is a summary of research I conducted exactly one year ago.
- So far the Galileo Project has taken 28 years from initiation in 1994
2. This EU taxpayer-funded and EU Commission-managed SatNav system is still only 73% complete
3. The UK was a major funder and a significant provider of technical expertise
4. The original deadline for completion passed 15 years ago
5. The budget has rocketed to 17 times the original figure
6. The project has missed so many deadlines it’s impossible to say when it will be completed
7. So far it has been 28 years in the making and 15 years overdue from its first deadline
8. None of the launches have taken place on European soil
The cost of the EU space project
From 2002 to 2006 1. 9 billion
From 2007 to 2013 5.3 billion
From 2014 to 2020 12.3 billion
From 2021to 2026 13.2 billion
Total cost 32.6 billion
Those figures do not include running costs
Typically perhaps, UK scientists (the vast majority of whom voted Remain) are as keen as the EU for the UK to re-enter the EU’s programme. The most acute problem is the cost. The EU wants the UK’s billions and its know-how. Given the strength of the UK space sector, it might be thought that the EU should be paying the UK, not the other way around.
The UK Government barely gets off the launchpad when it comes to support
The Government has no problem throwing vast amounts of taxpayers’ money at endless ‘green energy’ projects, but when it comes to the UK space sector it barely gets off the launchpad. Despite the United Kingdom being the second most attractive destination in the world for commercial investment in the space sector, the UK does not even appear in the Top 10 countries in the world for government support.
There are ten Governments that back their own space programs the UK Government comes last in backing their own country's Space program
Russia 0. 210 %
Saudi Arabia 0.076%
Germany 0. 059%
Korea 0.0 32%
[Source: OECD, 2021 paper.]
As a proportion of GDP, France spends over four times as much on its space sector, compared to the UK. Even Italy spends 2.3 times as much. India — to which the UK bizarrely still gives large amounts of overseas aid every year — spends 1.6 times as much as the UK Government.
“It’s the economy Jim, but not as we know it”
One characteristic of the UK space industry is particularly interesting. It has consistently outperformed the economy overall in terms of growth. Space sector income increased by more than 5% into 2021, outpacing both the growth of the global space industry in the same period (1.6%) and the general UK economy, which contracted by 7.6%.
The activities include
- ’Upstream’ Spacecraft manufacturing and launch vehicles
- ’Midstream’ Spacecraft operations and in-orbit management
- ’Downstream’ Spacecraft-derived data, applications and services, eg earth observation, satellite communications and connectivity, and satellite position, navigation & timing
Once again I am able to report on a UK success story. The UK’s space sector is generating employment and revenues. Approximately one-third of the sector’s output is exported. It is “the most attractive destination for private investment in space after the US.” [Source: UK Space Agency.]
An idea from outer space
Here’s an idea from outer space. Instead of the Government spending billions of pounds of taxpayers’ money subsidising ‘Net Zero’ wind farms, I have a suggestion for them.
Invest in the UK’s space sector
Here is the rationale
- The UK space sector is the second-most attractive place in the world for investors
- This sector plays to the concept of UK growth in a high-skilled, knowledge-based economy
- It also plays to the ‘Levelling Up’ policy, with spaceports from Cornwall to the Shetlands
- HMG could take a 20% stake in all serious space projects
- This would encourage more inward foreign investment
- Growth of 11% per year is forecast to 2030
After all, where else is the Government likely to get a 10% return on investment whilst at the same time supporting numerous Government policies?
Unfortunately, in the words of Bernie Taupin put to music by Sir Elton John, “I think it’s going to be a long, long time…”
Sources: PwC | UK Space Agency | OECD | Defence Science and Technology Laboratory | Ministry of Defence | SaxaVord Spaceport | Cornwall Spaceport | Orbex | Astra Inc | Scottish Dept for Business, Trade, Tourism and Enterprise | In-Space Missions Ltd | EU Commission