The space industry is the quiet enabler of modern life. Forget glamorous manned missions and the occasional heroic failures. Without space we’d have no Sky TV, no satellite navigation, lousy weather forecasts, and no timing signals for city transactions or mobile phone networks. Don’t worry: this is a good, old-fashioned business story but first a bit of history.
BACK TO THE FUTURE
While NASA struggles to get the Shuttle flying again and to keep International Space Station supplied, the remains of Britain’s own space programme can be seen in the Science Museum in Kensington. An unused Black Arrow rocket hangs from the ceiling in the space gallery. It is a solemn reminder that Britain is the only nation to put a satellite into orbit and then abandon the capability to do so.
The story repeated itself in the early eighties when the Thatcher government decided not to fund Britain’s involvement with the European launcher programme that evolved into Ariane and also to eschew any involvement with manned space flight. This is the backdrop to Britain’s space industry and the reason why, although large, successful and occasionally world-leading, it has such a low profile.
Thanks to this legacy, Britain doesn’t have a space programme so much as a space business. The UK sector consists of 222 companies, employing 15,700 people and generating £3.9bn in turnover from space activities split between ‘downstream’ businesses that use but don’t build space technology (two thirds) and the ‘upstream’ business which do (one third).
Space is a growing business. The EU estimates that space applications will be worth €350 billion worldwide by 2010. One project alone, the European Galileo satellite navigation system, is expected to generate €18 billion of benefits over 20 years. “What we’re also seeing is more companies relying on information that comes from space but don’t think of themselves as working in the space sector,” says Colin Hicks, director general of the British National Space Centre (BNSC).
“By global or even European standards it’s a small industry,” says Alan Hicks, secretary general of UKISC, an industry forum, “however, it is genuinely a very vibrant and innovative sector. We’ve got a number of companies who are doing work that is internationally competitive and sometimes at the leading edge.” Britain is strong in space science, navigation satellites (British firms are building the first two Galileo prototypes) and earth observation. Similarly we’re very strong in the commercial exploitation of space with companies like Inmarsat, who are based in London.
STEVENAGE, WE HAVE A PROBLEM
EADS Astrium is Britain’s largest space player by far. The UK outpost of a Europe-wide consolidated space business, it represents a traditional business model for 
The management of these advanced and complicated projects is a critical national capability and the risk of losing 10% of the project fee for a month’s overrun on a satellite schedule focuses management minds just as much as the boffins’.
After several years of industry consolidation and tough times in the communication satellite sector, one of the biggest challenges facing Astrium is to maintain long-term technology R&D. According to Colin Paynter, the firm’s managing director: it’s all about “getting the balance right between what you do now, what you do next and what you do after next.” Space customers are conservative and it isn’t surprising since satellites cost so much to design, build and launch.
Equally research takes a long time to mature. For example, EADS’s investment in advanced reprogrammable antennas over the past decade is only paying dividends now with new communications satellites for the MOD and commercial customers.
SSTL is an advocate of ‘faster, better, cheaper,’ when it comes to its micro-satellite business. Founded in 1985 with just six people, it has 27 missions under its belt and over 200 employees. “The strength of SSTL is to build to schedule and to a fixed price,” says, “we’re one of the few if not the only company that operates on a fully commercial basis,” explained Jeffrey Ward, the company’s managing director.
Their disaster monitoring satellites are a good example of the SSTL approach. “ESA and NASA spend hundreds of millions build mega-observatories,” says Ward, “while SSTL gets 80% of the performance by spending 10% of the money and picking commercial imaging technology off the shelf.”
Its efficiency comes from a tightly integrated ‘skunk works’ approach. “In aerospace, a lot of money goes into process and documenting it. We may well be taking the optimal path but we don’t spend so much time documenting it. Our success rate is close to the industry norm if not better. Quality doesn’t suffer but bureaucracy does.”
As a result of this background, Ward is critical of the conclusions of the panel that investigated the Beagle crash and offers a radical alternative. “Missions to Mars are very chancy. Every time a mission fails people say they needed more money and more management and I think the opposite true. If one in every four Beagles will fail, spend less [on each one] and launch more [of them].”
Both SSTL and Astrium are at the cutting edge of their respective specialisations but below these two leading satellite builders is a host of second-tier suppliers. One of the leading players in this area is QinetiQ.
They also face the challenge of funding research for the project-after-next. As a research and development specialist, picking the right bets is critical. However, explains QinetiQ’s Peter Truss, a typical space project “competes with other business cases that are being put forward … Because the timescale is extended you have to make the argument that the reward is going to be proportionally better.” Because commercial investments are hard to justify, investment often comes from the European Space Agency (ESA), the UK government, DTI innovation grants and the EU’s framework funds.
However, QinetiQ has had some major successes converting avant-garde technology to practical commercial use. For example, it developed an ion engine for ESA’s SMART-1 lunar probe.[vi] As a consequence, this innovative technology matured and is now expected to help commercial communications satellites stay in their orbits.
In fact, SMART-1 illustrates several converging forces in Britain’s space business. The first is the European dimension. For example, most British government space funding goes straight to ESA and the EU itself has staked out a claim to space policy.[vii] The second is the blurred boundaries between government-funded research and commercial exploitation.
Proponents of state involvement in space argue that it goes beyond providing outdoors relief to the aerospace industry. Instead, it is about sowing seeds. Looking at several billion-euro satellites due for launch next year, Astrium’s Colin Paynter argues that there is a substantial commercial pull through from modest government investment in R&D early on.
QinetiQ’s space boss agrees: “many markets we serve are not yet commercial markets and some of them may never become commercial.” But there’s a more political reason for initial government R&D spending: if UK businesses aren’t involved at the early stages of European programmes, joining in later becomes very difficult because reciprocal work share arrangements are already carved up between participants.
That is not to say that the British government is generous. “We put less government into space than Belgium which personally I think is a damning indictment and Belgium doesn’t have a space industry of 15,000 [people],” says Astrium’s director of earth observation, navigation and science, Mike Healey. However, most industry insiders praise the consistency of government policy even though they perhaps wish it were more consistently open-handed. Currently, the BNSC co-ordinates British civilian space activity and government spending of £188m a year.
MASTERS OF THE UNIVERSE
Faced with an uncertain future in which the largest satellite builders consolidate and new players, such as China and India, get in on the game, Britain’s space business as a whole faces real challenges over the next decade.
The first is to sustain its academic and research base with ongoing government and industry investment. The second is to map out a consistent strategy that includes a European dimension while enhancing uniquely British capabilities. The third is, to put it bluntly, better PR.
The BNSC takes a strictly utilitarian view: “we talk about using space as a tool not as an end in itself,” says Colin Hicks. But others, including the authors of a Demos book called “Masters of the Universe” aim a little higher. Their central position is that space activity is part of the architecture of the smart state and argue that Colin Pillinger’s “stroke of genius was to treat space as an extension of show business.”
Indeed, “inspiration is the bit that’s missing for the UK,” says Mike Healey, “that’s why Beagle captured the imagination. Colin Pillinger and his eccentric ways provoked quite a lot of reaction from a public.” A MORI poll suggests strong public support for a successor mission to Beagle 2.
Pillinger himself is more down to Earth about his approach. “We started with no money on the table and we had to find it from somewhere. However, people are missing a big, big trick in communicating what they do in space and in science in general. The point is that people were engaged by [Beagle]. We seriously thought we stood a chance of answering the question ‘is there life on Mars’?”
He adds that there are “very talented people and some very go-ahead companies in the UK. It’s a shame that the amount we invest in space research is not as high as it is in some countries because clearly the collaboration that the academics can undertake with industry, as evidenced by Beagle 2, could get some good projects off the ground.”
He advocates more ‘black sky thinking’: “There have been too many times in British business history that people have had great ideas and at the last minute people have said ‘that’s it, we won’t carry it through.’ I don’t want Beagle to be another dream that will never be fulfilled. I’ve got unfinished business. As the man said: I’ll be back.”