Special report: Harshbir Sangha MBE on the UK's space agenda
By CA magazine
1 June 2023
Space race 2.0
You would be forgiven for thinking that whereas the space race was once a contest between superpowers, it is now about high-profile multi-billionaires attempting to outdo each other while living out their childhood dreams.
Beyond the headlines, though, there are hundreds of companies in the UK at the cutting edge of this burgeoning industry, seeking to harness satellite technology to do anything from making semiconductors in space, to vastly reducing the cost of installing wi-fi in remote areas, to facilitating efforts to reach net-zero targets.
While there are a vast number of brilliant scientists and engineers behind these projects, those start-ups can burn through investment at a lightning rate – often with the hoped-for returns several years in the distance. And so, as the industry grows, so does the need for CAs.
In this special report we speak to the UK Space Agency to understand the business landscape in low-Earth orbit (read below), and hear from CAs in the industry – one of whom works at the Shetland Space Centre – about the opportunities in this exciting sector (read here).
As Tom Duncan CA, VP of satellite firm Inmarsat, says, “When I tell people I’m an accountant working in space, their ears twitch and their eyes light up.”
The prodigious growth of the UK space industry has made it the biggest contender outside the sector’s established giants. But will the collapse of Virgin Orbit see the smart money move elsewhere? Ryan Herman talks to Harshbir Sangha, Missions and Capabilities Director at the UK Space Agency, about rockets, space debris and why your cosmos needs you
"Space is the new digital.” So said Marc Ventresca, Associate Professor of Strategic Management at Oxford Saïd Business School, in 2021. Ventresca is one of the founders of the Oxford Smart Space Series, which brought together people from space agencies, government and the private sector to further research and thought leadership in this, well, space.
Historically, superpowers have pumped billions into the sector for exploration – and the national glory that came with leading the space race. Now, though, it is the limitless commercial potential inspiring many to look beyond the skies.
Up until 2022, the industry had been on a consistent and significant skyward trajectory. A McKinsey report, published last year, said the space industry has grown to approximately $447bn (£359bn), up from $280bn in 2010, and could reach $1trn by 2030. The current downturn in the global economy may have stunted that growth, but make no mistake, the industry will continue to expand.
One key reason behind the boom is that international space organisations, including Nasa and the European Space Agency (ESA), now work in partnership with the private sector, the best-known example being Elon Musk’s SpaceX. Advances in technology mean companies can now launch cheaper microsatellites on the backs of rockets – a record 180 were sent into orbit last year. Another McKinsey report found that “private-sector funding in space-related companies” passed $10bn in 2021, a near tenfold increase in one decade.
Furthermore, space launches are no longer the preserve of superpowers. Portugal, Brazil, Singapore, India, Sweden and Australia have all either built or are currently building spaceports to provide the facilities that can launch satellites or spacecraft. And, outside the established giants (the US, China and Russia), the country planning to have the most operational spaceports is the UK, with eight, including six in Scotland.
Interstellar
The sector has been growing since the UK Space Agency (UKSA) was founded in 2010, and space contributed £17.5bn to our economy in 2021, an increase of £1bn on the previous year – no mean feat during a pandemic. In fact, the UK outperformed every other nation in that regard.
One of the people entrusted to ensure the UK is a serious space player is Harshbir Sangha MBE, recently appointed Missions and Capabilities Director at the UKSA which encompasses his previous role as Director of Growth. “The UKSA inspires and leads the UK in space to benefit our planet and its people. The agency focuses on civil space and helps deliver the government’s national space strategy,” says Harshbir. “Our value proposition is very simple – to catalyse investment into the UK space sector and to develop its missions and capabilities.”
Harshbir says the third key strand of the value proposition revolves around “championing space”, to nurture, inspire and develop the next generation of scientists and engineers through the Stem agenda. The UK has some exceptional homegrown role models. British-born Dr Nicola Fox is Nasa’s new head of science, Professor Carole Mundell recently became the Director for Science at the ESA, and former UK Space Agency CEO David Parker is the ESA’s Head of Human and Robotic Exploration.
Harshbir is working with other sectors, including fintech, transport and meteorology, to demonstrate the benefits of space, especially in gathering data. Global business only functions as it does because of what happens in space, he says. Every transaction in the global banking sector, every commercial shipping journey, and even cash machines rely on satellite tracking. Space may also hold the key to solving some of humankind’s biggest challenges.
“Our life on Earth depends on space, which also means making space more sustainable,” says Harshbir. “We are working on missions like Truths [Traceable Radiometry Underpinning Terrestrial and Helio Studies], developed with the ESA. It is the first mission of its kind, which will create a climate observatory in space, and it will increase the measurement of weather details and climate data by at least tenfold on what we have today. If it goes to plan, this will launch by the end of this decade in 2030. That’s a huge mission for us.”
Sustainability is also a significant part of the UK’s space agenda. Just as our planet has been polluted by the accumulation of junk, so the same applies to space. Perhaps the biggest barrier right now to what mankind can achieve in orbit is the accumulation of debris – dead satellites and other detritus left over from previous missions, ranging from a spatula to a tank of ammonia the size of a fridge.
The UKSA is helping to fund Astroscale, a company seeking a way to clear up that debris. Its mission is complicated by some of those satellites being owned by nation states and therefore likely to contain sensitive data. So, countries need to cooperate to find a solution that will allow the likes of Astroscale to remove the mess and fully unleash the potential of space. Otherwise, it will become increasingly difficult to launch satellites and space programmes.
Out of space
Other challenges are domestic rather than global. Having invested £1.2bn in Galileo, the EU’s satnav project, the UK was effectively turfed out of the programme post-Brexit. A new domestic satnav programme was launched last year in conjunction with Inmarsat.
The UK remains a member of the ESA but no longer enjoys the full benefits of membership and won’t have a seat at the table for key strategic meetings – although the recent Windsor Agreement may open the door for the UK to play a bigger part in ESA space programmes.
Harshbir is currently in talks with the EU about re-entering the Copernicus programme, which sends satellites into orbit to measure CO2 emissions that predate even human activity. It’s seen as a key factor in countries across Europe meeting their net-zero targets.
But, after a decade of exceptional growth, the UK suffered a setback with the failure of Virgin Orbit. Cardiff-based Space Forge, a government-backed firm that plans to develop semiconductors in space, is considering launching from Portugal. The company criticised the regulatory costs of launching satellites from the UK, telling a Commons select committee there needed to be “seismic change” for the UK to be competitive. Sir Stephen Hillier, Chairman of the Civil Aviation Authority, countered: “Our primary aim is to ensure that the space activity in the UK is safe.”
The fallout from Virgin Orbit revealed a long list of structural failings in the business, but this is a rapidly developing sector where an element of trial and error is inevitable (see also the recent failure of the SpaceX Starship rocket). Only time, and perhaps Portugal succeeding where the UK has failed, will tell us whether Virgin Orbit's demise was a blip or something more profound.
Then there is the difficulty of convincing investors to put their money into projects that can take years to produce a return. Whereas tech companies can deliver spectacular and near-instant growth, space players are competing in a very long game.
Mike Lawton, an entrepreneur who has worked on some of the UK’s most successful space start-ups, says: “This is one of my areas of frustration. The way we’ve structured the investment community in the UK is geared to short-term returns. And that means you end up focusing on software opportunities. But we’ve got some fantastic hardware opportunities. So we need more patient capital. Things like pension funds, which can have a 40 or 50-year lifetime, encouraging or incentivising them, and making it tax efficient for them to invest in hardware and space opportunities, would seem like something that government could help us with.”
Blast off
So, where do CAs fit into all this? Well, much the same as in any job. A good business has good finance people. But this is also a sector that, by its very nature, is fast-moving and constantly innovating. And, of course, there is something undeniably cool about saying you work in the space industry. “My message to CAs is this: come and join us,” says Harshbir. “There are huge opportunities. Space is generally known as a world of engineers and scientists, but I’m a career civil servant. I’ve done social policy, economic policy, I came into science policy, and then space. Every business needs every kind of skillset, whether it’s finance, legal, accountancy or management.
“There are nearly 49,000 people employed in the space sector, just within the UK, across close to 2,000 companies. Also, half of those jobs are outside of London and the south-east, with clusters blossoming across the whole of the UK. It all depends on the individual and what kind of opportunity a CA is looking for. But I’ll be very surprised if that opportunity doesn’t exist in space.”
The only way is up
According to a government report released this March, the financial year 2020/21 was a time of growth and optimism for the UK space sector
- 300 The number of new UK space companies founded
- 55% of UK space exports go to Europe
- £17.5bn The value of the UK space sector, up £1bn on the previous year
- 1.6% The growth of the global space industry, less than a third of that enjoyed by the UK space sector (5.1%)
- 48,800 people are employed in the UK space industry, part of a total 126,800 when the wider supply chain is included
- £635m was invested in UK-headquartered space companies, with 75% of that coming from acquisitions and 23% from VCs
- 4% The UK’s share of global investment in space, putting it fourth behind the US (46%), China (29%) and Singapore (5%)
- 1,772 new jobs were created across the UK space sector
- 106% The growth in legal and financial services for the UK space industry
- 1,590 Number of space organisations across the UK
UK space start-ups
Plastic-i
This multi-award-winning start-up, based in Oxfordshire’s Harwell Space Campus, uses high-resolution satellite images and deep learning algorithms to detect ocean debris. Tracking the journey of plastics from rivers to the bottom of the ocean will mean we can be more effective in cleaning up our seas.
Sat Tracker
Another Harwell-based start-up, Sat Tracker is working on technology that will dramatically cut the cost of ground antennas. This will ultimately enable the delivery of cheap and affordable satellite wi-fi to remote parts of the world, helping to accelerate developing economies.
MicroAge II
This project, led by the University of Liverpool, recently received £1.4m of funding from the UKSA to investigate how the microgravity environment makes astronauts’ muscles weaken in space. The aim is to provide a better understanding of how muscle ages back on Earth.
gov.uk/government/organisations/uk-space-agency
For more resources, visit the ICAS technology hub
