Profile: the space industry
Worth more than $300 billion in 2013, the global space industry is continuing to expand, thanks to new entrants like China and India looking for a piece of the action. Mark E Johnson explores the changing frontiers of this cutting-edge sector.
Source: Copernicus Sentinel-1environmental satellite ESA
There are over a thousand satellites currently orbiting the Earth, each costing millions upon millions of dollars to build, launch and operate – and that’s before you even get to so-called ‘downstream’ businesses making use of space data. Or, to put it another way, space is big business.It’s continuing to get bigger, too. The global industry was worth $314.17 billion in 2013 according to The Space Report 2014, representing a growth of 4 per cent from 2012.Historically, the US has dominated the field, and it remains the foremost player, but a recent report from the Futron Corporation shows that it is the only nation to log a decline in competitiveness for seven straight years.The space industry is in a state of flux as competitors such as India and China dedicate significant resources to boosting their position in the field, while private ‘new space’ companies, such as SpaceX and Virgin Galactic, promise to shake up the way in which the sector operates. The UK, meanwhile, may be poised to take advantage of the industry’s continued growth and ongoing changes.“The space industry is one of the UK’s unsung success stories and very important to the growth of the economy,” Julia Short, a representative of the UK Space Agency, told Re:locate. “The total contribution of the space sector to the UK economy was more than £9.1 billion in 2010/11, and it is growing at a rate of around 7.5 per cent a year, despite the tough economic climate.”The Space Innovation and Growth Team, a joint body formed by government, industry and academia, said that it wanted the industry to be worth £40 billion by 2030, a sentiment echoed by Chancellor of the Exchequer George Osborne recently.The UK space sector currently employs approximately 3,500 people who are directly involved in putting objects in space (compared with around 35,000 in Europe and 230,000 in the US), but if those involved with ground equipment, user terminals and other related activity are added, the number balloons to 25,000. The sector includes everything from building and operating spacecraft hardware, through infrastructure, to software applications that make use of data gathered in space.Because of the government decision, made some 20 years ago, not to fund scientific and research-based work in space directly, the bulk of the UK space industry is oriented towards commercial work. Satellite television is still the biggest part of the market, while non-satellite TV is also distributed via satellite networks, even if it is carried to living rooms via traditional masts or cables for the last mile. Similarly, the so-called ‘backhauling’ of bulk mobile phone traffic between masts is often done via satellite. Elsewhere in telecommunications, broadband is also a growth market for space.Satellite navigation has been an area of expansion. While it began with the US military’s GPS system, it has become a growth area in Europe, with increases of 10 per cent or more a year, thanks to the development of the Galileo system.Another growth area is Earth observation. This has been predominantly government work to date, with weather forecasting sitting at the fore. But, beyond weather, there’s a range of other markets on the horizon for Earth observation, says Richard Peckham, business development director for Airbus Defence and Space.“I’m expecting that to be the next mass market. Google Earth has opened people’s eyes – but of course, Google Earth is very old data,” explains Mr Peckham. “However, there will be a move in the next few years to start delivering much more real-time data.”In particular, there are many security applications, along with scientific applications for studying phenomena like climate change.Discussing the strengths of the UK space sector, Julia Short said, “UK research in space science and Earth observation combines with a strong industrial base to underpin a powerful and globally competitive set of national competences. The UK also has many smaller companies which draw upon the past heritage of UK technology, the country’s current deep skills and knowledge base, and its expertise in financing new ventures.”The bulk of the sector is made up of what are known as ‘downstream’ applications. “About 80 per cent of the sector is in the applications and services – that’s the people who operate the satellites and sell the services. Only about 20 per cent of it is actually building the satellite hardware,” says Richard Peckham. He expects this trend to continue, with infrastructure potentially dropping to 10–15 per cent.Getting down to the specifics of the government’s involvement with the space industry, Julia Short noted that it had “accelerated the commercialisation of ideas with the Satellite Applications Catapult and demonstrated its belief in the value of international partnership through the European Space Agency by dedicating £1.2 billion to ESA programmes over the next five years,” adding, “Government will continue work to deliver a regulatory environment that promotes enterprise and inward investment in the UK.“This response acknowledges the challenges of a global market, and the government will work with new entrants to ensure that inward investment means the creation of jobs and returns for the UK economy.”On the job front, the industry has its own particular set of quirks. When it comes to entry positions, Airbus is taking on hires with fairly generic maths, physics and engineering skills. While employers in many sectors might complain of a lack of these graduates, the perceived ‘sexiness’ of the space industry means that recruiters in this field have no such difficulty. Airbus gets hundreds of applicants for every graduate position.However, for the ‘downstream’ companies making use of satellite data, Richard Peckham says, things are not so clear-cut. “A lot of those companies wouldn’t even identify themselves as a space company.”An organisation like satellite navigation firm TomTom, for example, is more likely to see itself as a consumer electronics company, even though its product is dependent on data from space. At that level, companies are competing with any other tech business on a much more level playing field.Hiring more-experienced staff can be a trickier proposition, too. Mr Peckham says that getting staff with the necessary skills often means recruiting from the continent, and that, likewise, many UK workers are drawn across the channel. “It is one of those industries which is quite global – I’m thinking particularly of the infrastructure bit, building the satellites. It’s a mid-sized industry, so I think there’s quite a bit of movement that goes on.”While China and India are big up-and-comers in the global space sector, crossover with Western companies in terms of staff is not hugely common. These countries are keen to do as much as possible themselves, and the bulk of the talent is homegrown.Mr Peckham notes that the sensitive nature of certain military contracts is prohibitive for Airbus in hiring Indian and Chinese workers. This is not the case for all companies, however, and a few hires do get made from those countries.“At the moment, the UK is definitely seen as a good place to do business. There are now quite a few companies looking to set up here – new start-ups who can see there’s a lot going on. So there is going to be more demand, I think, for skilled people who can come in and deliver both the hardware and the application side. Some of them might be specialists, say in geology or farming, because there’s this interaction between the different skills.”It’s not sufficient for the industry to employ engineers who understand space: it also needs experts who understand the needs of those making use of the sector’s output. In that sense, it requires a very far-reaching skillset.Private manned spaceflight is the emergent trend that’s grabbing headlines, and it looks set to cause significant shifts in the industry. While the US is still leading the way, thanks in large part to the availability of significant amounts of venture capital over there, so-called ‘new space’ looks set for the UK, too.These ventures will start with the lower-risk operations, such as Virgin Galactic’s sub-orbital flights, which will give (extremely wealthy) passengers a zero-gravity experience.But there are individuals, such as SpaceX’s Elon Musk, who are talking about projects as ambitious as missions to Mars.Indeed, the Civil Aviation Authority and the Department of Transport are actively looking for potential locations for a British spaceport, and considering how the right regulatory requirements can make Britain competitive.“I think there will be encouragement to come here, and there will be a market, so prices will come down,” says Richard Peckham. “And once we can get the launch cost down, that again will be a major growth trigger for the space sector. Cost is definitely one of the limiting factors at the moment.“Once you get much cheaper launches, suddenly you get more things that are economic to do in space.”