British Space Industry:Challenges and Opportunities after Brexit

Omkar Nikam （Orbital Gateway Consulting）

The UK Space Agency (UKSA) has been away from the industry limelight due to the extensive collaboration with its various European counterparts. But as most UK citizens voted on June 23， 2016，to opt-out of the European Union (EU)， UKSA is in the spotlight from the past three years. Historically，the UK has been one of the signif i cant partners of the European Space Agency (ESA)， through which the EU was able to build and develop various technical capabilities for space science and technological research. The country had one of the prime positions in the Galileo project-European Global Navigation Satellite System (GNSS) as well as in other lucrative projects like EU's Earth Observation (EO)programme called Copernicus. Even though the Brexit decision is making the UK miss out on some of the future commercial space opportunities， the UK will remain a member of ESA.

Introduction

The wave of Brexit has taken away breath many industries; the space industry seems to be at more loss with the UK taking the most amount of hit with respect to its European space assets. Numerous challenges lie ahead of the UK as the country has decided to leave the EU. Surrey Satellite Technology Ltd (SSTL), a UK based small satellite manufacturing company which currently has approximately 40% of the small satellite market share will also lose access to EU projects due to the Brexit scenario.Simultaneously, many UK satellite operators will lose access to the EU’s Space Surveillance and Tracking (EUSST) programme. This is just the tip of the iceberg, while the surface of Brexit is filled with challenges, there are also potential opportunities that will lead the UK to become one of the strongest nations in the space industry.

In the coming decade, the British Space Industry will have to undergo a huge transformation to develop its independent space verticals. The roadmap of developing such extensive capabilities might be turbulent at times, but it will align the UK with its superior western allies. Since the UK is going to experience a wave of the arduous journey until it rises as an independent space power nation, there will be scope for various international collaborations in the coming years. This will involve some challenges for the UK but will also provide opportunities for both the UK and its foreign collaborators.

Challenges

Creating Strong Foundations for Various Space Verticals

Though UK government has committed to invest approximately $190 million in the development of various space assets, for any nation, developing individual capabilities in different space verticals is not an easy task.Especially when the country has been in a long-term partnership with intergovernmental space organization. This is one of the critical tasks that UKSA has to carry out in the coming years to create a strong foundation for its various space operations.

Therefore, public-private partnerships and more importantly increasing foreign collaboration might decrease some of the challenges that the UK has to face during the development of its independent space capabilities. For example,Lockheed Martin is the first foreign company to collaborate with UK based spaceflight start-up, Orbex, to develop the UK’s first spaceport in Scotland. UKSA has awarded$38 million to Lockheed Martin and Orbex to develop UK’s first space launch systems.There will be challenges ahead as the UK’s space investment landscape involves various European partnerships, but the times are changing as the foreign companies are coming to collaborate with UK’s space companies.

Geographic Location Issues

While many critical observers are keeping close for the business opportunity after Brexit, few are keeping an eye on the ground to capture some of the lucrative regions of the British territory. Scotland is one of those regions where the UK has set up its most amount of security infrastructures, especially related to national security, and New Scotland Yard is one of those examples. Moving forward to the Brexit issue, 62% of Scotls has voted to remain in the EU. This widens the gap between the opportunities and challenges as the UK has also selected Scotland as the prime location for its first space launch systems. The future is uncertain, but the current outlook of post-Brexit scenario gives a vibe of mixed opportunities for both the UK and EU.

Competition with Allies

Tracing the history of the UK’s foreign relations, the USA and Australia are the two major allies throughout its history. UK has also been one of the prime partners of USA and Australia in various defense operations.But in the present day, the USA is the most developed space power nations. On the other hand, Australia started developing its space strategy with the inception of the Australian Space Agency (ASA) in 2018 too. Even though the UK’s role as a competitor will not hamper the relation with these two countries;But it can be a minute possibility in the near future as every nation around the world is on the path of developing independent space capabilities. Especially as the space applications domain is evolving but has a very slow pace of innovation, there might be overlapping between various private players from these countries that may rethink of stepping into the international cooperation nexus.

Opportunities

New Space Applications

The UKSA recorded total revenue of $18.8 million from 2016 to 2017. While the majority of the combined revenue comes from various space segments such as space operations, manufacturing, applications, etc.,the downstream space revenues account to almost 69% of the total revenues. And as the downstream market currently involves various New Space companies, we can see a growth in the UK space industry with respect to New Space applications. Oxford Space Systems,Power Market, Earth-i, etc. are some of the well-known UK based New Space companies which have recently established themselves in the UK and European space market. One of the unique qualities of UK’s New Space sector is that many of the universities and research institutions are also a part of the country’s New Space initiative. The University of Southampton is one of the universities involved in propulsion research with the aim to commercialize the same in the coming decade.

The UK’s future New Space landscape looks promising as the country is now in the race to enhance its commercial space capabilities on a global scale. Dissecting the New Space applications, EO is the most promising space segment where the UK can create numerous opportunities for its economic growth in the coming decade. And as the country will remain the member of ESA, the UK may not be a prime member of the Copernicus programme but can utilize EO data to create opportunities for commercial downstream market players.But the scenario may change if UK leaves EU without a Brexit deal. And this may create a significant impact on the UK New Space companies as many of the UK companies are currently bidding for Copernicus contracts.

Partnerships with Space Powers

One of the interesting parts of Brexit is how or with which countries will the UK initiate long-term partnerships in the space projects.The obvious answers will be USA, Canada,and Australia as these countries are the longtime allies of the UK. Moreover, during the International Astronautical Congress 2018 (IAC 2018) held in Bremen, Germany, a trilateral agreement was signed between UKSA, ASA and Canadian Space Agency to accelerate domestic space programs of the respective countries. But looking ahead, China and Singapore are also some of the future potential partners of the UK in the space sector.

In 2005, UK’s Science and Technology Facilities’RAL Space and China’s Beihang University established a joint laboratory for various space research and development activities. This British-Chinese collaboration has led to the success of over 12 space research projects. And as the UK has planned to encourage its scientists to participate in this joint laboratory research, in the coming years,China might become the UK’s one of the active partners for Lunar and Mars missions.On the other hand, Singapore seems to be one of the commercial and innovative partners of UK. Both Singapore and UK collaborated in 2018 to develop commercial satellite-based quantum communication networks. With an initial investment of approximately $12 million,both countries have planned to develop and launch the first commercial quantum satellite by 2021. The Asian space sector is rapidly developing in the past five years, along with China, we can also see that India, South Korea and Japan can also be the potential partners mainly due to their progressive status in the Asian space sector.

Acceleration in Military Space Programs

Besides the commercial outlook, the UK’s space efforts are also aimed at developing core military space programs. Post-Brexit keeps UK at the prime position aligned with EU defense and security. UK is one prime member of the North Atlantic Treaty Organization(NATO) along with EU nations such as France and Germany. And the exit of the UK from the EU will leave behind an empty space in which the UK as an EU member was one of the prominent contributors in various NATO operations. Therefore, from the non-EU perspective, UK will rise as one of the leading players in the EU’s defense and security ecosystem as the UK will remain the member of NATO even after the Brexit is accomplished.Moving down the defense value chain, the UK is planning to launch its own satellite navigation system. The country currently has access to GPS as well as Galileo services, but in the post-Brexit situation, the UK will lose access to Galileo encrypted services which are specially designed for military purposes.Therefore recently, UK has reached out to its military allies to help develop its own satellite navigation system. Australia being the firstin-line for this collaboration, there will be still a thin line between long term partnership and investment in the military space assets as Australia, is also looking forward to developing its own space assets.

Conclusion

Every challenge comes with an opportunity,but sometimes it takes a while to transform the rigorous challenge into a lucrative opportunity.The UK is similarly going through rigorous transformation in the space sector. Though it might take almost a decade for the UK to align with the independent space power nations,the end goal is certainly not impossible as the country has already started collaborating with various foreign entities.

The British space industry has started accelerating its commercial focus in the space applications segment. But the military outlook also remains the highest priority as the country will be unable to share EU’s space assets for its military operations. Simultaneously,to increase its economic outlook of the space application, the UK should initiate dialogues with some of the prominent space fairing nations like India and Philippines,as the country launched Philippine Space Agency on August 8, 2019. Leveraging resources through partnerships and exchange of space technologies will pave for the commercial space growth in the British space industry. From the eyes of the world, Brexit puts the UK in a very challenging position, but underneath it also provides a platform for the British space industry to rise as the independent space power nation.