Pixalytics blogs: is the UK Space Industry in good health?
Dec 2016 © Pixalytics. The UK Space Agency issued its latest report on the Size and Health of the UK Space Industry, covering 2013/14 and 2014/15. There are a number of eye-catching headlines, but this broad-brush approach means that there are a lot of unanswered questions within the granularity of the report.
UK Space Industry Income is Worth £13.7 bn in 2014/15
This headline figure breaks down into 88% (£12 bn) for downstream activities. Whilst the 12% (£1.7 bn) for upstream activities is much smaller, it is higher than in previous years. Upstream refers to the part of the industry that build and launch satellites and sensors; whilst downstream encompasses the products and services that use the data those objects collect. Overall, the UK represents 6.5% of global space economy.
Unsurprisingly, given the above breakdown, space applications are the biggest segment of the industry, followed by space operations, space manufacturing and ancillary services.
This follows through into capabilities which are dominated by Broadcasting, Communications and Navigation & Timing which account for 56%, 19.6% and 12.2% of the space industry income respectively. Earth observation is listed with an income of £256 m, equating to 1.87% of the overall industry; although Meteorology is shown separately.
38,522 Jobs in the UK Space Industry in 2014/15
The space industry accounts for 0.12% of the total UK workforce, with 29,947 people working in downstream activities, and 8,575 working in upstream. It’s interesting to note the difference in the employment percentages, 78% and 22% respectively, compared to the income split above.
A fascinating fact in the report is that the average qualification level of space industry employees is higher than any other sector in England and Wales. With 74% of employees possessing a degree, 15% holding a HNC and the remaining 11% having other qualifications.
Space Industry Throughout the UK
All regions of the country have space companies. Of course, London and the South East – partially driven by the Harwell Campus – have the highest concentrations. We were delighted to see that the South West had was the third most populous area with 126 space organisations; although the South West is only fourth for Headquarters and income generated with £176 m worth of space business within the area.
UK Space Industry Customers
The report notes that the largest customer type is individual consumers, accounting for 54% of the income. However, given the domination of Broadcasting in the figures and with the majority of their customers being individual consumers this does skew the result. Equally limited information can be gleaned for the other customer types.
Personally, we’d be interested in seeing the customer type split for each capability. This would be much more useful, as at the moment these are a set of high level figures offering little, or no, insight.
Growth Slowing In the Space Industry?
The report has lots of positive statements about growth. There are at least four different income growth rates of 6.5%, 7.3%, 8.1% and 8.5% on page 10, depending on which time period you compare. Similarly, page 12 on employment lists growth rates of 5.8%, 6.0% and 6.7%.
All of this sounds great, but looking at the growth rates within in the tables for the last 7 years, quite wild swings year on year can be seen. The chart below shows some good growth rates, but the last two years are the lowest growth rates.
UK Space Industry Income & Employment Growth 2009/2016. Source: Size & Health of the UK Space Industry 2016, UK Space Agency
To be fair the report itself notes a few caveats on the figures, such as new methodologies and the changing value of the pound. So care should be taken with such figures, but does it show signs that growth could be slowing for the industry?
Towards 2030 Ambitions
In February 2010 the UK Government set ambitious targets for the industry of:
- 8% of the world space economy by 2020, and 10% by 2030.
- 100,000 jobs created by 2030, taking the industry to 119,100
By the end of 2014/15 progress had been made towards both of these targets, with the industry representing 6.5% of the world space economy and having 38,522 jobs. Employment needs to grow by 7.8% each year to achieve the target, which is concerning given the current growth levels outlined above. If jobs aren’t being created, it’s unlikely the global market share target will be hit.
Shaping The Future
Finally, the UK Space Agency is currently seeking ideas and evidence on how to implement the 2015 National Space Policy. Anyone can submit their thoughts, and we’d encourage everyone to participate in helping shape the future of the UK space industry.
The submission document is straightforward asking for proposed actions, alongside evidence as why they are necessary, for each of the four principles of the National Space Policy
- Space is of strategic importance to the UK because of the value that space programmes deliver back to public services, national security, science and innovation and the economy.
- Preserving and promoting the safety and security of the unique space operating environment, free from interference.
- Supporting the growth of a robust and competitive commercial space sector, underpinned by excellent academic research.
- Cooperating internationally to create the legal frameworks for the responsible use of space and collaborating with other nations to deliver maximum benefit from UK investment in space.
The UK Space Industry is growing, but we need to ensure that we take advantage of every opportunity and develop, promote and encourage the use of space based applications and technology.
With all the concerns about economic certainty in the coming years, let’s make sure our industry rockets ahead!