Aiming high: The UK’s Space Strategy is a map to the stars
The UK’s Space Strategy is a map to the stars, published at a time when geopolitical tensions on Earth are increasingly shaping the space sector at a global level, says Rachael O’Grady
The UK’s Space Strategy, released this month, recognises that space-derived technologies, and the way we use them, have entirely transformed over the last decade – to the point that this sector now “underpins the modern economy itself” by way of “our energy systems, our financial markets, our ability to protect the United Kingdom”. The publication of the Strategy also comes at a time when geopolitical tensions on Earth are increasingly shaping the space sector at a global level.
Pledging over £7.8bn of funding by 2030 for space, the Strategy affirms that this is “unequivocally a priority for the UK and for this government”. It squarely recognises the strategic importance of an industry which brings together defence, national security and economic growth opportunities, yet concedes that it also remains “a domain of competition”.
According to the government’s estimates, satellite-reliant services alone underpin 18 per cent of UK GDP – which is perhaps not widely appreciated. However, one sticking point for accelerating investment in the UK’s space industry has been converting early-stage funding and innovation into commercialisation at the scale needed to ensure the UK remains competitive in the space race.
The UK Space Strategy is designed, in part at least, to target that gap.
‘Governing the future of space’
One of the biggest changes is the government positioning itself as an “anchor customer” for the industry. A more targeted approach to funding is promised, with fewer and higher-value awards. However, although such funding will of course be welcome, clarity and consistency in procurement processes will be critical for businesses. The Strategy also promises that the UK government will “stimulate demand and use space technology through roadmaps, market insight and access pathways”.
It is not just about the companies at the forefront of building satellites. A UK government which is actively engaged in the industry as a core customer would create ripple effects across the supply chain – from communications, data and analytics, to software, insurance, finance and professional services.
The strategy also confirms that the UK government will focus closely on regulation, committing to “make licensing faster, simpler and cheaper, reduce regulatory burden for repeat activity, ensure the UK has the right access to spectrum, and lead internationally in shaping the frameworks that govern the future of space”. Achieving these goals while also continuing to ensure regulation is sufficiently robust is a delicate exercise.
Giving investors confidence
Space-related activities raise particularly complex issues in this regard. Moving from innovative prototypes to products that are commercially viable currently requires deep pockets and a lot of patience with navigating existing red tape. Smoother government procurement processes and clearer licensing routes will not only provide confidence for businesses’ bottom lines but also for investors looking to put money behind the UK space industry.
One of the regulatory objectives in the UK’s strategy is to “influence emerging international frameworks, guidelines and best practices” and the fostering of close international partnerships – for example, by working through NATO, the European Space Agency and other allies. That also matters commercially, as UK companies will need to be able to work seamlessly across international supply chains and regulatory guidelines if the sector is to supercharge growth and reach the scale that it needs.
In any case, space is now firmly established as an important driver of UK economic growth and the UK Space Strategy reflects the government’s commitment to the sector as well as its ambition to strengthen the UK’s position within the global space economy as a whole. The real test will be whether that ambition translates into meaningful and sustained investment, innovation and growth that can deliver lasting economic value.
Rachael O’Grady is a partner at Mayer Brown