The UK’s space industry looks to the stars, but will regulations hold it down?

By Carver Oakley, Client Executive

The reality of Cornish winters sees great waves torment the cliffs which they crash against. This storm ridden stretch of the British coastline has inspired numerous harsh and gothic descriptions, well exampled in Daphne du Maurier’s ‘Jamaica Inn’. The storms and 200ft cliffs that inspired Du Maurier’s Cornish novels have not changed since that time, nor has the inspiration which grips this part of the world.

Whilst the coast continues to foster literary inspiration in the 21st century, perhaps unexpectedly, the Cornish coastline is also now host to inspiration and innovation of a more technical kind. Perched 300ft above the waves, Space Port Cornwall and its consortium of aerospace, AI, and satellite companies are leading the way in the UK’s ambition to become Europe’s leading geography for investment, manufacturing, and development of space technology.

A renewed space race is underway, and the UK is in an optimal position to take full advantage of this highly skilled, highly lucrative endeavour. This is reflected in the three space ports in the UK: two soon-to-be operational launch sites in Scotland and the already operational port in Cornwall, which as of January 2023 has already attempted to launch satellites into orbit.

Space Port Cornwall’s internal dynamics reflects the wider UK space industry as it combines the horizonal launch capability, afforded by Newquay’s over 9,000ft runway, with a business park and manufacturing site for a number of space companies. Launch sites and space clusters across the UK contribute to the overall employment of nearly 50,000 people, generating £17.5bn in income. Much of this revenue is contributed to by the vast amounts of global capital invested into the UK space industry. In fact, over 17% of the $47bn global private capital invested in the space industry is invested directed into the UK – second only to the United States in size.

The UK must not take this lead for granted. Due to its innovative and expensive nature the space industry greatly benefits from government support. The pledge in the National Space Strategy to spend £10bn over ten years is certainly welcomed, as many in the space industry try to cross the hallowed bridge from start-up to established, profit making, enterprise. However, political headwinds and the challenging state of the UK’s finances mean that spending may be publicly scrapped by an incoming administration of any colour in some performative cost-cutting exercise – or it simply may never materialise.  Fortunately, the UK’s space sector seems robust in the face of this reality, drawing on the private sector for much of its finance.

Yet there are challenges facing the space industry in the UK, ones which the government is simultaneously the principal architect and solution. Speaking to the House of Commons Science, Innovation and Technology Committee in March of this year, the now extinct Virgin Orbit and its satellite customers complained of slow and bureaucratic regulators causing unnecessary costs. In its final report the Committee found this to be an accurate and common complaint among the witnesses giving evidence. Poor collaboration between the relevant regulators alongside a lack of clarity on who drives the UK’s space programme, especially considering its much-heralded National Space Council has never met, is certainly hampering companies’ ability to confidently scale up their operations.

The Government’s ‘Space Strategy in Action’ document lists its robust regulatory stance as a positive step which it is taking to “end the wild west nature of space”. The Government’s Space Sustainability Standard, a global first, will develop a framework of standards for measuring and managing debris, improving satellite repair and retrieval. And whilst this must be an essential part of any future space program, overregulating risks damaging business prospects.

The Committees’ report also acknowledged this very point. They recognised the importance of ensuring that defunct satellites and space debris does not prevent effective use of space for future generations. Yet setting the bar too high, may simply encourage space businesses to relocate to countries with more achievable standards.

Regulatory headwinds have not stopped Space Port Cornwall from expanding. They opened their Space Systems Operations Facility, a new centre for businesses involved in satellite launch and development in April this year, proving even after Virgin Orbits launch failure and following bankruptcy, that they are much more than just a runway. Further evidencing this is the move in of Intelligent AI into the Port. Intelligent AI uses earth observation data, captured by satellites, to inform building valuation and insurance.  

Land mapping is a key benefit brought by low orbit satellites which provide earth observation data for a myriad of uses. GeoSmart Information is a company which uses satellite’s earth observation data to construct a groundwater-level forecasting system enabling improved coverage of flood and drought management systems. This obviously has environmental benefits, but also boosts the economy by providing farmers with a tool to optimise their yields. Low earth orbit satellites are an essential innovation which provide for growth across the UK. The OneWeb satellite constellation, of which the government owns 19%, can provide extremely rural locations with internet connectivity, enabling even the most remote geographies to connect and contribute economically.

The innovative and economic benefits brought by the UK’s space industry, along with the politically salient topics for which it arches across: regulation, planning, skilled workforce, industrial policy, to name but a few, means that all Parties will be campaigning on issues of central importance to space businesses. The government must achieve a regulatory balancing act, yet such a central role in the space industry’s success might open businesses up to the political storms that have plagued these isles for the past several years. Careful political engagement and the continuation of the flow of private capital is certainly needed if the UK space sector is to reach the stars.

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