The study by know.space, commissioned by the UK Government’s Department for Science, Innovation and Technology, estimates that the global space economy is rapidly growing and evolving and is forecast to be worth around USD 1.1 trillion by 2045, bringing about commercial opportunities for space nations that are best placed to exploit them. The UK plays an important part in the global space economy and has significant expertise both in business and academia. However, the UK spends less on its space sector compared to the biggest space nations. The UK government spends around 0.05% of GDP on space which is only a fifth of that spent by the US (0.24%). The R&D that underpins the space sector’s growth is largely government funded. The development of space technologies is inherently risky and requires substantial upfront investment; government investment plays a critical role in driving innovation and supporting economic growth.
The UK space sector is worth over GBP 17.5 billion in income to the UK economy and employs 48,800 people (source: know.space, Size & Health of the UK Space Industry 2022, https://www.gov.uk/government/publications/the-size-and-health-of-the-uk-space-industry-2022). Since the turn of the millennium, the UK space sector has seen an average long term growth rate of 6.4%. This is significantly outpacing the growth of the wider UK economy and the global space economy (both of which grew at 1.6% on average per year over the period). The space sector’s influence extends throughout the UK economy, with wide-ranging applications across a range of sectors such as transportation, communications, earth observation, meteorology, navigation, and exploration.
The study examines the rationale behind the case for the UK Government’s investment in the space industry and argues that the sector excels when measured on the criteria of benefits, impact, return and value for money.
The benefits of the space sector are wide-ranging and substantial, broadly falling into three categories:
The majority of these benefits accrue outside of the space sector, often to people, firms and organisations who do not directly pay for space services or even realise that the services they rely on are enabled by space investment.
The report highlights that the space sector plays a vital but often hidden role in delivering substantial and varied benefits across government, society and economy, supporting key markets and services which citizens, firms and the government rely on every day. The sector is “critical national infrastructure” that contributes to wider government goals (such as becoming a science and technology superpower by 2030) whilst promoting UK sovereignty and soft power.
Satellites provide unparalleled insight into our planet, vital to climate change efforts, as well as enabling cost savings and unlocking commercial opportunities. The report also points to the space sector’s unique capacity to inspire and unravel fundamental questions about our existence, through advances in space science.
The total value of industrial activities supported by satellite services is estimated as at least GBP 370 billion, equivalent to approximately 18% of UK GDP. Most of these economic activities are supported by multiple different types of satellite services, with Global Navigation Satellite Systems (GNSS) alone underpinning GBP 320 billion (15% of UK GDP). The GBP 370 billion reflects the total value of output of those industries supported by satellite services and the authors assume that this output would be significantly disrupted by a curtailment to global satellite services.
The sector is highly productive (labour productivity of £144,000 per annum) and R&D intensive (5 times UK average).
Investment today not only offers strong short-term return on investment (e.g. 9.8:1 for the UK’s European Space Agency (ESA) investments) but also opens up future growth possibilities for the sector and wider economy.
In the UK, the space industry supports over 50 times its output in wider economic activity (GDP).
There are six case studies of government investments included in the study. These cover a range of space technologies/capabilities, user groups and benefit types:
Levelling up and growing the UK launch industry
GBP 50 million in government investment.
Benefits to the UK include:
Ensuring resilience of Critical National Infrastructure
GBP 80 million government investment in space weather forecasting projects & missions.
Benefits to the UK include:
Enhancing connectivity across the UK
GBP 400 million government equity investment in OneWeb
Benefits to the UK include:
Routing Emergency Services to citizens in need
GBP 1.4 billion government investment in Galileo and EGNOS, and funds to facilitate UK uptake of GNSS
Benefits to the UK include:
Commercialising revolutionary new UK technologies
GBP 65 million HMG investment in Reaction Engines’ SABRE technology.
Benefits to the UK include:
Automated land monitoring for rural payment schemes
Approximately GBP 1 billion HMG investment in civil Earth Observation capabilities Benefits to the UK include: