Foreword  Professor Sa’ad Sam Medhat

A pulse poll: the state of space and aerospace R&D in the UK

Imagine those packages that today are delivered by plane or truck could be delivered by rocket. Instead of Mauritius, think of the Moon as a luxury resort. Well, with the advancements and innovations being made in rocketry science, rocket delivery systems and private space travel could soon make these things a reality.

The space sector, as described by NASA, is an industry that refers to economic activities related to the manufacturing of components that go into Earth's orbit or beyond.

As we celebrated, on 20 July this year, half a century of human space exploration, there seems to be a renewed investment interest in space. This interest is extending beyond manned low-Earth orbit missions and unmanned scientific exploration, and is undoubtedly fuelled by the growth in downstream space activities such as the provision of satellite technology, signals, artificial intelligence (AI), and Internet of Things (IoT) based services.

Many applications are, by definition, reliant on having a space infrastructure being set up by public and/or private actors. They include services and products for consumers using satellite capacity, such as communications, satellite television services, geospatial products, meteorology and location-based services (e.g. a navigation device using satellite positioning signals from publicly funded space infrastructure, like the US GPS, the European Galileo or the Chinese Beidou systems).

"Recent initiatives by large public and private firms suggest that space is an area where we will see significant developments."

The actual value creation and revenue generation is often far removed from the initial investments according to the 2019 OECD report, titled ‘The space economy in figures - how space contributes to the global economy’. Whilst many national and industry associations have conducted surveys to identify activities and growth profiles, comparable data to quantify in detail the different segments of the space economy in different countries still remains very limited.

Recent initiatives by large public and private firms suggest that space is an area where we will see significant developments, potentially enhancing the US technological leadership and addressing opportunities and vulnerabilities in surveillance, mission deployment, cyber, and AI. Worldwide, and again particularly in the US, this has led to a growth in business R&D funding and investment.

Often this business R&D investment has been funded by an expansion of state support for space R&D. Climate change concerns have also led to a growth in earth observation satellites with associated, and often combined, public and private sector R&D funding.

An emerging area is the development of large constellations of micro-satellites mainly performing earth observation or broadband communications. According to Morgan Stanley’s Space Report from July 2019, the estimated global space industry could generate more than $1tr by 2040 in annual revenue, up from the current position of $350bn.

A parliamentary Space Industry Act was also published in 2018 to support growth in the UK space sector, which currently is worth some £15.5bn.

So, where is the UK in this picture of tantalising opportunities?

The latest report by the IKE Institute  seeks to use available data to explore the nature and recent dynamics of the UK’s space sector R&D. This report is set against the background of the global space R&D position, however, due to the fact that the data is only available at the aerospace level, the R&D component is examined in this context.

In terms of space-related turnover and R&D within Europe, the UK trails France, Germany, Spain and Italy, while these countries trail the levels of activity in the US and China. However, the UK specialises in small satellites using off-the-shelf components, and given that this is an increasing growth area, it should be well placed.

Country2019 launches2019 successes

Space launches in 2019. Source: Wikipedia

Brexit will not directly affect the UK’s relationship with the European Space Agency (ESA), but it could impact on R&D funded projects under space-related EU funded specialist programmes and inter-country projects such as the Galileo satellite navigation system, which is directly funded by the EU.

A hard Brexit would result in the UK being excluded from the European Aviation Safety Agency (EASA) which has bilateral deals with other aviation safety bodies throughout the world, including the UN’s International Civil Aviation Organisation, and thus, this situation would have a major impact on the UK’s aerospace sector. Leaving the EU will change the relationship the UK has with EASA, and which has been identified by Airbus and the House of Commons Business, Energy and Industrial Strategy (BEIS) Committee as a ‘critical issue’.

UK manufacturers would have to get certification from a new national safety body and then also seek certification through EASA while having no influence over the development of EASA’s standards. This would also mean that there would be no scope for regulatory divergence following Brexit, as any UK standards would have to be compliant with EASA standards. Even if the UK is allowed to retain membership of EASA, the current EASA rules do not allow non-EU members voting rights.

"Levels of government support for aerospace R&D are currently lower in the UK than in comparable countries."

The UK has significant and globally competitive space and aerospace sectors. These might be smaller than would be expected based on the size of the UK’s economy, but there are specific areas of expertise such as small satellites and Rolls-Royce’s world-class capability for engine development.

However, the scale of space and aerospace investments mean that international collaborations are vital. Levels of government support for aerospace R&D are currently lower in the UK than in comparable countries, but it is clear that the aerospace business investment in R&D is slowly recovering from the impact of the banking crisis, despite R&D spending not growing as fast as in other UK sectors.

Despite a challenging economic and political landscape, the UK’s space industry has been shooting along at quite a pace. Team Artemis, the MOD’s £30m fast-track space programme, is one such example. The aim is to launch a small satellite demonstrator within a year with US support. The launch of a small satellite constellation would provide the Royal Air Force (RAF) and other services with a resilient system for providing sensor data, including live video, to the battlefield. The team consists of the Ministry of Defence, the Defence Equipment and Support, the RAF, Defence Science and Technology Laboratory, Surrey Satellite Technology Ltd, Airbus, Raytheon and Virgin Orbit.

The relatively low cost of small satellites, as well as the range of launch options due to their light weighting, provides an interesting set of competitive features. The intention is to have a reserve of satellites available for a quick launch by Virgin Orbit, which would provide a fast response to block attempts to disrupt conventional satellite systems or to handle coverage of new areas during a crisis.

Such a development would build upon the UK’s competitive advantage in small satellites and thereby drive a potentially game-changing military advantage for the nation.

Professor Sa’ad Sam Medhat
Chief Executive
Institute of Innovation and Knowledge Exchange

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