The British space industry might become a casualty of the UK’s exit from the European Union in just under a year’s time.
A new clause in the EU’s Galileo satellite project – allowing existing contracts for the project to be cancelled once the supplier is no longer in an EU member state – effectively made it untenable for British companies to bid for new contracts in the program, as they ran past the date when Britain would leave the EU.
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The contracts at state could be worth €400 million to British space companies, and the Financial Times reported that Galileo-related services and applications could be worth €6 billion by 2025.
The British government, and companies in the space industry, are fighting to still be involved with included with Europe’s satellite project.
In the meantime, Verdict asked some experts in the field about the state of the British space industry, how it might be affected by Brexit and the future more generally.
The British space industry is itself worth £14 billion, cornering about 7% of the global space market. Some of this value is likely to be lost if Britain is excluded from Galileo.
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By GlobalDataHowever, the move would not spell disaster for the industry, according to Dan Lewis, a senior adviser working with the Institute of Directors on energy and infrastructure policy.
Lewis said:
We should take into account that the 90% privately owned £14 billion UK space sector is only fractionally affected by [Galileo].
Lewis explained that, of the 1,700 satellites currently circling the earth, only 100 are navigation satellites. Of the navigation satellites, only 20 belong to Galileo (although some more are planned to be launched).
A vast majority (at least 1,300), are satellites used for telecommunications and earth observation. Satellite manufacturing and related services are the strongest part of the space sector in the UK.
Lewis said the more serious implications of being left out of Galileo will likely develop over the longer term, and it is well worth the industry trying to avoid them.
He said:
Whilst the UK excels at satellite building and specialist components like cameras for space, the longer term value from programmes like Galileo is the data that can be harvested and turned into revenue far into the future.
It would be far better to find a way to stay in the program and close down that uncertainty.
However, if Britain is excluded, there are avenues the industry can explore.
Lewis added:
The UK could aim to have greater access to US-based GPS or, with dramatically falling launch costs and reusable rockets, even proceed to procure its own navigation satellites.
It could certainly be done far, far cheaper than Galileo that was meant to cost €2.5 billion rather than €10 billion.
Stuart Martin is CEO and executive director of the Satellite Applications Catapult, a technology and innovation incubator that helps organisations use and benefit from satellite technologies and promotes economic growth through the exploitation of space.
Martin thinks that, while the space industry is worth around £14 billion, it is both growing and supports a much wider industry.
Martin told Verdict:
Overall, it is estimated that the space sector supports as much as £250 billion of the UK economy – that is the size of the economy that makes use of satellite technology.
There are still lots of opportunities to grow, with the commercial sector growing fastest.
Both Martin and Lewis agree that the space industry is changing, and that the fastest progress is likely to come from private enterprise rather than large government back initiatives.
In order to thrive, governments and investors need to adapt.
Lewis said:
The government wants to triple the size of the space industry to £40 billion by 2030.
That growth will realistically have to come not from large incumbents often working on multinational science projects, but from small and medium enterprises (SMEs) entrepreneurs and disruptors aiming to more quickly enrich themselves and their investors.
This needs to change and for research and development funding to be swifter and more streamlined for SMEs.
Martin said:
There is a transitioning happening. Historically, large space programmes have been government led, but that is changing. Governments are switching to more of a customer role, with the direction being set by industry.
A European example, which is much more commercial than SpaceX, is OneWeb. There are still billions of government dollars going into SpaceX, despite all the hype.
Lewis pointed out that, while they are publicly funded, companies like SpaceX have fundamentally changed the game in developing space technology and move with unprecedented speed – values not shared by slower government-controlled projects.
To progress, the UK space industry must move with them.
He said:
Galileo is a very complex constellation and has taken a long time and a lot of money to bring to fruition.
New Space – the nascent private spaceflight industry – starts small, fails faster but is audacious and progresses fastest of all.
For the UK space sector to achieve its full potential, we would expect over time to see more growth coming from the New Space Sector and the SMEs and startups that are driving it, some of which may be leveraging the data from global navigation satellite systems like Galileo or new space launch capabilities within the UK.
Lewis added:
It will be seen as a great weakness over the next few years, that Europe’s satellite launch capability through Ariane, is not reusable. SpaceX chief executive Elon Musk, and soon Amazon and Blue Origin chief executive Jeff Bezos, have completely broken traditional space-hardware costing models with reusable rockets.
Martin agreed, adding that a private sector developed in line with strong government oversight offers the best avenues for progress.
Martin said:
We definitely need a strong role for government in space, as government will always be a major user of space, we will always require international cooperation.
But we also need to find new ways of encouraging and enabling the private sector to take more benefit of the opportunities.
Martin also argues for the space industry to look beyond navigation and transport, in order to offer the best possible benefits in years to come.
He said:
The space heroes of the future will not only be those who take us to Mars and beyond, but those who find new ways to use space technology to solve some of the world’s most intractable problems, like poverty, and global inequality.
