Memorandum 71
Submission from UK Space
SUMMARY
Space is one of the economic sectors with the
highest added value, contributing ~£7 billion annually to
the UK GDP. It is a hi-tech export-driven sector in which engineering
and science blend together seamlessly to underpin a world-class
sector growing at over 10% per annum. The space industry's level
of investment is equivalent in monetary terms to 12% of the industry's
value added (ie its GDP contribution). This means that the UK
space industry is about six times more R&D intensive than
the economy as a whole.[218]
Space provides several examples of best practice
for government investment in science, such as:
— both civil and military space systems/services
often benefit from a single government-sponsored R&D investment;
— Government R&D funding has helped
create a public sector "intelligent customer" for space
systems and services—in Departments, Regulators and Agencies,
and at both policy and implementation levels; and
— enlightened public sector procurement
policy has turned small long term R&D investment into world-leading
commercial services.
UKspace recommends that it is timely to use
the above best practice as guidelines for future public sector
investment in science. We would be pleased to elaborate on the
aspects of public procurement that are most relevant in this debate.
INTRODUCTION
Space science (in its broadest sense, including
Earth Observation, timing, navigation, telecommunications, biology
and astronomy):
— Provides a challenging environment
which forces the development of leading-edge technologies from
the science base.
— Provides an intellectually rigorous environment
for researchers which forces the advance in scientifically-based
endeavours in the space domain.
— Underpins much commercial activity—directly
as in broadcasting and positioning for example, and indirectly
by contributing to the innovation environment in the nation as
a whole.
— Provides a beacon for the education
system to encourage children and students to develop an understanding
of, and a desire to participate in, science and engineering.
We support the proposal for a review of science
investment policy and recommend that it address how best to support
the whole UK economy rather than individual narrower domains.
We therefore recommend that the review be led by a scientifically-qualified
economist, eg: from the Treasury.
WHO ARE
WE?
UKspace is the Trade Association for the UK
space industry. It is jointly sponsored by the SBAC and Intellect.
The Space Industry in the UK is one of the most innovative
sectors of the UK economy and as such contributes to the wealth
of the nation. It is a large employer of science and engineering
graduates—nearly 60% of the industry's labour force is qualified
to at least graduate level—compared to 30% for the economy
as a whole.[219]
Most companies have close links with Institutes of Higher Education
and public sector laboratories, often supplying the tools for
research in the various science disciplines making up space science.
FACTUAL INFORMATION
Central Government spends £218 million
in civil space directly coordinated by the British National Space
Centre (BNSC),[220]
predominantly from DIUS, DfT, DEFRA, TSB and The Met Office, and
most of it through the European Space Agency (ESA) and Eumetsat.
Through its contribution to the European Commission it spends
significant additional amounts on GMES,[221]
Galileo and other FP7 research activities.
One of the major reasons for UK participation in
these international organisations is the scientific benefit that
accrues. However, the organisational structures used by the UK
for managing its participation in these international scientific
endeavours often differs radically from those used by competitor
countries (in particular in not having a UK Executive Space Agency).
RECOMMENDATIONS
UKspace believes that a review of science investment
policy is required.
Whenever public sector funding for science comes
under pressure, there is an understandable attempt to "pick
winners" which will be commercially successful when spun
out into industry. History shows that such attempts are usually
failures; if the commercial value of a development is so obvious,
commercial investment will be viable and the investor will not
want to share the intellectual property with an academic institute.
This means that the public sector should invest
in high-risk subjects where success is not guaranteed but where
success would have major national-scale benefits.
One of the benefits of a vibrant scientific
sector is the cultural change which can be brought about in the
nation as a whole, with the general public developing an appreciation
of science and technology and reviving the Victorian perception
that advances which affect everyone can be made in the UK, rather
than only in Japan, the US, France etc.
Selecting the leader for such a review is difficult.
Academics and industrialists will both inevitably bring a history
of their domains and will be open to accusations of bias. Our
recommendation is that a scientifically qualified economist (eg
from the Treasury) may be the most appropriate, able to consider
such important issues as:
— Given the global mobility of scientists,
knowledge and capital, how can UK scientific investment be best
framed to maximise the benefits to the UK economy and society?
— Given that other countries have a
similar requirement and will also be trying to take benefits from
UK investment, what actions can the UK take to maximise the benefits
to the UK of the investments of other countries?)
— When science is done, where does
the economic benefit fall? In volume manufacturing of commercial
products, some probably falls where the factory is, but some also
falls where the R&D site is.
— Where is the tax take that results
from HMG subscriptions to international scientific organisations
such as ESA, CERN, ESO, ITER,...?
— Since scientific investment may take
decades to have noticeable economic effect, how can science investment
policy be arranged to drive the speed of developments and sustain
funding over those extended periods?
Above all we whole-heartedly endorse Lord Drayson's
suggestion to favour science investment in areas where the UK
has clear competitive advantage. In the case of space science,
the evidence for competitive advantage can be clearly seen in
the successful, growing, hi-tech, export-driven space industry.
April 2009
218 Case for Space, Oxford Economics, November 2006. Back
219
Case for Space, Oxford Economics, November 2006. Back
220
UK Space Activities 2007, BNSC, July 2007. Back
221
GMES = Global Monitoring for Environment and Security. Back
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