Annex 1
COMMENTS ON "CASE4SPACE SUMMARY REPORT"
(C4S)
Without seeing the report by Oxford Economic
Forecasting on which the C4S report is based, it is not possible
to evaluate it in detail. While sympathising with the authors'
desire to increase space funding, it is important to note the
report's weaknesses; only by making a fair economic assessment
can sound policy decisions be made.
(a) Like similar reports prepared for the
BNSC (discussed in SFC's October Submission), the C4S report discusses
only satellite engineering, on which the DTI and BNSC have spent
much of nearly £4 billion over 20 years. It thereby misleads
readers into thinking that this is the whole commercial space
industry—which is starkly untrue—particularly in view
of the rapid growth of activities to realise sub-orbital space
tourism in countries other than Britain. This continuing silence
about the feasibility, low cost, promising growth prospects and
other potential benefits of the development of passenger space
travel services keeps the general public in ignorance of this
important new field for commercial and industrial growth.
(b) The C4S report uses a number of performance
measures which are quite different from those used in the commercial
world, such as % of staff with university degrees, and "downstream
output per employee". Where normal commercial information
is provided, it is not emphasised—for the obvious reason
that the industry's performance is poor, as seen from the following
examples:
(i) For 2003, global sales of surveillance
satellite services are stated as $100 million, versus $2,400 million
investment in surveillance satellite systems themselves—a
very poor result from the economic point of view. Further investigation
would likely show that much of these sales are to government organisations,
and are therefore not commercial demand. It would probably also
reveal that this performance is not significantly improved over
that which the Trade & Industry Select Committee's 2000 Report
described as having "failed" (despite investment of
a further 300 million pounds since then). In truth, it is incorrect
to describe this as a commercial activity; it is a government
activity. As such, heavy investment in surveillance satellite
systems may be justified as military or environmental projects,
but they are very far from being commercially justified. Consequently,
the government's stated policy objective to help British industry
to earn profits from space activities requires it to investigate
space tourism as a much more promsing option.
(ii) For 2004, 75% of the commercial benefits
claimed from the DTI's investment in communication satellites
appears to be sales revenues of television programming ("downstream
turnover"). This is presumably claimed to have the economic
benefit of "improving consumer choice"; however it can
equally well be argued that supplying hundreds of channels of
low-cost television programming has negative economic value due
to its well-known anti-educational influence.
(c) The C4S report greatly overstates economic
benefits through effectively double-counting via "catalytic
effects", "spillover benefits", "multiplier
effects" and others. For example it is claimed that "direct
employment" of 17,560 in 2004-05 "...helps to support
almost 70,000 jobs". However, such measures can be seriously
misleading unless great care is taken to compare "like with
like". For example the "spillover" and "multiplier"
benefits of such services as Public Libraries or the Blood Donor
Service are also very large; satellite engineering has no monopoly
of this type of indirect benefit. Standard measures such as profitability
and direct employment, as used in commerce and industry, are easier
to evaluate, and are indeed more appropriate for assessing projects
which are claimed to be commercial, rather than public services,
as the Minister for Science and BNSC claim of surveillance satellites.
(d) The C4S report contains ambitious claims
about future projected satellite service sales revenues. However
these depend on a number of dubious assumptions—such as
the truly Orwellian nightmare that "satellite navigation
will be part of every mobile phone, every car"!
(e) The C4S report appears to contain a
number of errors, such as the figure that communications satellites
generated $14 billion in launch services in 2003 (which is more
than 10 times the whole commercial satellite launch market).
(f) The C4S report states that: "Space
inspires students to study science subjects" and includes
various claims about satellite engineering's contribution to science
education. However, it does not mention the fact that British
student enrolments in science courses are in free-fall, and approaching
crisis-level! (as discussed in SFC's October Submission). Current
practice must therefore be judged as very ineffective—and
this is easy to understand: satellite engineering is a very specialised,
technical field which is of interest to only a small minority
of people. HMG's policy of limiting space investment to satellite
engineering has therefore surely had the contrary, very undesirable
effect of reducing young peoples' spontaneous interest in space.
By contrast, surveys of young people show that they are fascinated
and enthused by the idea that they themselves could make a short
flight to space for the equivalent of a few thousand pounds within
five to 10 years; this can be used to stimulate interest in a
wide range of related subjects. (The author has direct experience
of this as a teacher.) But successive Ministers, the BNSC, and
the DTI keep this knowledge hidden from school-children, students
and the general public.
(g) Finally, the C4S claims that investment
in satellites is "disruptive technology" with great
innovative potential. However, no evidence is provided that this
will be any more profitable than existing satellite-based information
services. By comparison, passenger space travel is so genuinely
"disruptive" that successive Ministers for Science and
Innovation and Ministers for Trade and Industry have refused to
even discuss the subject for more than 10 years! They have refused
to permit even a single feasibility study, while spending billions
of pounds on unprofitable projects which were recognised in 2000
as having "failed"; and they have repeatedly commissioned
reports on space policy that specifically ignore this key subject.
In summary, following the practice of recent
Science Ministers and senior BNSC staff, the C4S Report does not
mention space tourism at all. Instead, having received the bulk
of HMG space funding for decades, amounting to several billion
pounds, UKSpace request an additional 50 million pounds/year for
even more satellite work. However, without at least comparing
the likely results with an equivalent investment in passenger
space travel it is not possible to conclude that this would be
a good investment of public funds. As a simple comparison, a single
year of such funding is enough to develop the "Ascender"
spaceplane prototype which would be capable of carrying passengers
to space. If the general public was informed of this, there would
surely be a large majority supporting investment in developing
passenger space travel, instead of the zero level which the government
persists in.
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