Space sector spinouts and world-beating solutions

The race for space is a multinational endeavour. A new report from PwC highlights the UK’s unique position in attracting global talent and private investment. This while space tech establishes its significant role in driving economic growth and solving some of humanity’s most pressing challenges.

Ruth Holmes

19 May 2023

This article is taken from the latest issue of Think Global People magazine.Click on the cover to access the digital edition.

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Cross-border collaboration, multi-specialist teams and private investors are coming together to make blue-sky thinking about space exploration and innovation a reality – and for good.In the last year, the number of UK and European space start-ups grew by 50%. In the UK alone, the sector underpins and spins-out value annually to the wider economy of an estimated £370bn (18%) of UK GDP.A new report from PwC in collaboration with the UK Space Agency, Expanding Frontiers: the down to earth guide to investing in space, describes these opportunities for capital investors and therefore international leadership and management.The consultancy’s analysis shows how acquisition and consolidation are major themes in the investment landscape, opening the door for further international collaboration, innovation and cross-sectoral learning.

Cross-sectoral learning to support innovation

PwC’s report follows new government figures showing how the UK’s space sector is driving growth in the wider economy to the tune of +5.1% in real terms to £17.5 billion in 2020/21 – the second-fastest annual growth in the last seven years.Data in the government and Space UK’s Size and Health of the UK Space Sector Report further shows how the UK space sector is growing faster than the global average, with £635 million invested in UK-headquartered space companies last year. Acquisitions accounted for three-quarters of the total investment value.June’s Innovation Festival for Global Working explored the practices and thinking behind the expansion of the sector and how it innovates with former NASA astronaut and Lockheed Martin’s Chief Technologist for Space Exploration, Tony Antonelli. This important one-day event delivered transferable and actionable learnings for leaders and managers of ambitious cross-border teams and companies looking to increase impact in their own sector.

The expansion of the UK space sector

In the context of international management and cross-border growth, headline data in the PwC/UK Space Agency report shows the UK is the most attractive destination for private investment in space after the US, outperforming its European competitors.The UK receives 17% of global space investment and has been the leading destination in Europe – and second internationally behind the US – since 2015. Nine of the largest UK venture capital firms have invested in space since 2015, mainly in Earth observation, manufacturing and satellite connectivity.Craig Brown, Director of Investment at the UK Space Agency, said: “From today’s satellite communications to the future of orbital assembly, space has taken on an increased significance as a deeply embedded part of the global economy that is poised to grow at up to 11% per annum to 2030.”Today, the sector is diverse, increasingly global and growing across its downstream (spacecraft-derived data, applications and services), midstream (space operations and management) and upstream (space manufacturing and launch) activities. The UK’s success in attracting international investment is due to a dynamic industrial base of over 1,500 space companies, says PwC, which has grown on average 23% per year to date. They include established companies like BAE Systems, Surrey Satellite Technology Ltd (SSTL), Oxford Space Systems and Inmarsat alongside a rapidly growing number of space-tech start-ups.The sector is built on the UK’s talent pool and attractiveness to international talent, world-leading infrastructure and universities, and access to export markets. Across the UK there are 83 research centres, 64 space-test facilities and 53 universities, including those in the space tech clusters of Harwell, Leicester and Glasgow, “which builds more small satellites than anywhere outside California.”The sector offers a thriving ecosystem of opportunities for cross-sector learning, with further growth predicted, as the added value of satellite and other space-related technology is harnessed in sectors as diverse as education, healthcare, manufacturing and communications.

Solving today’s challenges from space

Report co-author Matt Alabaster, partner at PwC Strategy & UK, said the report “shines a light on the substantial contribution that the space industry can make to solving some of our biggest global challenges, from decarbonising our economies to increasing food security and improving access to healthcare,” as well as the scope of the opportunities for supporting services and businesses.“Our analysis shows that there are opportunities for investors of all stripes; the industry contains asset-light and technology-driven businesses, as well as infrastructure assets and supporting services businesses, all of which stand to benefit from the significant growth of the global space industry.”PwC’s analysis highlights the important role of the space sector in sharing learnings that will support transitioning to a zero-carbon economy. It estimates that more than 50% of the world’s climate variables are only measurable from space. Satellite communications are also helping the healthcare sector to reach remote regions and supporting more data-driven healthcare. In agriculture too, satellite imagery is being used to inform changing land use patterns that optimise decision-making, harvest volume and food security. Among the pioneers of UK space tech is Joshua Western, CEO and co-founder of Space Forge. This highly innovative British aerospace manufacturing company is headquartered in Cardiff, Wales. It focuses on harnessing the benefits of microgravity for specialist manufacturing of pharma and semiconductors and uses carbon-negative technology.“The growth in our company and this sector is testament to the untapped potential of the UK space ecosystem,” says Joshua Western. “We’ve spearheaded new investment into the UK space sector from homegrown and valued international partners. We are excited to be part of a dynamic and rapidly expanding industry that makes a significant contribution to the UK economy.”"Space is already the hidden linchpin behind our everyday lives, with nearly one-fifth of the UK GDP underpinned by space-derived data, applications and services,” said CEO of Seraphim Space, a global leader in space-tech investment, Mark Boggett.“The UK plays an important role globally, positioned second only to the US in terms of private investment in space with a 17% market share that will continue to grow as the number of UK and European space start-ups swelled by 50% last year.“Seraphim is at the forefront of this exciting industry, generating attractive returns by investing in s space-tech companies that benefit society. As UK space tech ascends, we stand ready to contribute significantly to this exciting landscape: investing in future UK space companies that are set to become global leaders. This is merely the dawn of space tech, and we are thrilled to be part of this exhilarating journey.”

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