With Labour in power after 14 years of opposition, there is a renewed focus on harnessing the country’s technical strengths to drive global leadership and economic growth.
The UK’s space tech industry in particular stands at a critical juncture, marked by significant advancements. However, in order to ensure continued progress, the new government must address existing obstacles, whilst capitalising on emerging trends.
The evolution of UK space tech
In recent years, UK space technologies have experienced remarkable growth, contributing an impressive £16.5 billion to the economy back in 2019/2020. A significant portion of this income (83%) comes from consumer and business transactions, with 9% attributed to national defence. At present, then, it seems the sector’s strengths lie in small satellites and telecommunications, with British companies also leading in innovative fields such as quantum key distribution – a secure communication method for exchanging encryption keys, based around properties in quantum physics.
In March 2024, the former Conservative government published the Space Industrial Plan: From Ambition to Action – Advancing UK Space Industry, which set out ambitious targets and milestones for 2030. The plan emphasises the importance of space technologies in enhancing national security and resilience, highlighting the need for increased collaboration with international partners and industry stakeholders. Key initiatives included the Connectivity in Low Earth Orbit (C-LEO) research and development programme and the ongoing development of Skynet – the UK’s own cluster of military communication satellites.
Despite these advancements, however, the UK’s investment in space tech remains relatively low compared to other nations in the G20. As Nick Shave of UKspace – the nation’s official space tech trade association – pointed out, the UK ranks as a third-tier nation in terms of advancements, lagging behind countries like the US, China and France. This discrepancy will likely encourage more robust government strategy to attract support through private investment.
Overcoming barriers to growth
One of the most pressing tasks for Labour is to increase investment in infrastructure and resources. Indeed, the party’s National Wealth Fund plan emphasises supporting industries that are shaping the future, from AI to satellite systems – each crucial for managing data and providing advanced analytical solutions.
Enhanced research and development will thus play a pivotal role in the sector’s growth. Labour’s manifesto commits to long-term R&D budgets and the creation of a new Regulatory Innovation Office. This initiative aims to maximise the value of satellite-collected data by leveraging AI to translate vast amounts of raw information into meaningful insights. By reducing regulatory red tape and streamlining processes, Labour can furthermore support better development of new technologies and garner further private-sector investment.
Strengthening international partnerships remains equally as essential for the UK’s space-tech success, with the previous government underscoring the importance of bilateral partnerships with spacefaring nations. This included the US, NATO and the European Space Agency (ESA), with Labour set to continue building on these relationships, whilst exploring new potential opportunities for cooperation. This will hopefully build the country’s capabilities and global standing.
The UK’s ongoing membership with the ESA in particular will prove crucial, especially now the country has access to the free, unique Earth observation data through the ESA’s Copernicus programme as of January 2024. In order to derive maximum benefit from this and other advantageous data insights, however, the Labour government must strive to strengthen and maintain positive relationships with the countries that own key satellites.
Fostering innovation and industry-academic collaboration is another critical aspect of Labour’s agenda. The government plans to introduce ten-year funding cycles for key R&D institutions and develop better partnerships between industry and academia – an approach that will drive progress and ensure the UK remains at the forefront of technological advancements. Supporting initiatives like the Ministry of Defence’s SKYNET 6 programme will facilitate the development of next-gen communication and other critical services, for example.
The strategic role of space tech
Investing in space tech is not only about economic growth, but national security and resilience, however. The Defence Command Paper, Defence in a Competitive Age, recognised space as a fundamental military domain, highlighting the catastrophic impact that loss or disruption in the space domain could have on civilian, commercial and economic activities.
The Labour government must continue to prioritise the development of defence space capabilities to protect the UK’s interests and maintain its strategic advantage, particularly in such a volatile geopolitical climate.
Environmental and climate technologies
Labour’s commitment to environmental policy and climate change likewise presents an opportunity for the space tech sector. By leveraging satellite data and AI-driven analytical solutions, the government can gain critical insights that will help us effectively transition towards net zero, whilst addressing pressing environmental challenges. This focus on sustainability will not only enhance the UK’s reputation but also drive additional demand for innovative space technologies.
Navigating towards global growth
Ultimately, UK space tech is poised for significant growth but realising its full potential requires a coordinated effort from the new government. Labour has already shown significant promise, stating that it will increase investment, enhance R&D, strengthen international partnerships and foster innovation. It has already made progress against its goals in its short time in office, calling for cautious optimism towards these ambitions. Indeed, if it can overcome existing barriers and position the UK as a global leader in space technology, the country will benefit from economic growth and much stronger national security as a result.