Written Evidence Submitted by RAND Europe

The UK has stated a policy ambition to claim a 10% share of the global space market, as well as to capture wide-reaching social, economic and security benefits for the UK from space. The UK has recognised strengths in certain industrial niches, such as small satellites, telecommunications, or In-Orbit Servicing and Manufacturing (IOSM), as well as scientific strengths in areas such as space weather and instrumentation. It also plays an important role in shaping international space governance, such as through its leadership in the UN OEWG initiative, contributions to Committee on the Peaceful Uses of Outer Space (COPUOS) and Prevention of an Arms Race in Outer Space (PAROS), and collaborations such as the Combined Space Operations (CSpO) Initiative and Artemis Accords.

However, there is a significant and enduring gap between the stated level of ambition and the associated level of public investment in space, which falls far behind European peers, let alone the United States (U.S.), China, Russia, India, Japan or South Korea – key global actors in space. The UK's approach to development of its space sector has historically sought to avoid 'picking winners' in favour of spreading investment across a broad range of areas. This raises questions about the level of focus and the UK's ability to compete with other countries who either have the large domestic market to sustain a broad range of industrial strengths and an end-to-end supply chain, or, who accept a need to specialise and back 'national champions' in industrial niches more explicitly.

Similarly, the UK has not historically prioritised a national space programme but, instead, has sought to share the costs and de-risk delivery of complex missions and projects through investment in ESA or other international collaborations. While the UK has struggled in the past to secure a favourable geo-return from its ESA investments (e.g. unlike France, Germany or Italy, all of whom spend more and have more robust national space programmes alongside ESA), UKSA has worked successfully to rebalance this in recent years (e.g., via the joint Industrial Policy Task Force) and bolster the competitiveness of UK firms in securing work on ESA programmes.

Despite the UK's efforts to increase its industrial competitiveness in space, international competitors have not stood still, investing heavily both from public budgets and through commercial companies (e.g. SpaceX). The expansion of the private space sector, or 'New Space', presents both an opportunity and a challenge for the UK, as these new companies tend to be less reliant on government support and leverage private investment and broadened participation in space to innovate and develop new technologies and approaches.

At the European level, the EU is prioritising the competitiveness of these 'New Space' companies, adopting (or seeking to adopt) policies and initiatives that seek to bolster, consolidate or otherwise better support its space industrial base to compete with such US firms, risking knock-on effects on the UK's competitiveness on the global stage.

As such, there is a window of opportunity for the UK to exploit its significant potential in space, but also a risk not only that growth opportunities are missed as other nations' industrial sectors outpace the UK. Without action to enhance the competitiveness, resilience and interconnectedness of its domestic space sector, the UK may be left behind.

Finally, cross-government coordination on space remains a work-in-progress (as is true in most spacefaring nations), despite efforts in the last half-decade to improve collaboration across government departments, such as the creation of the NSS and horizon scanning efforts across government). On the defence side, the UK is investing in sovereign space capabilities to reduce its dependence on US military and intelligence assets, and steps have also been taken to integrate civilian and military space efforts. Examples include the establishment of the National Space Council and contributions of both sides to a National Space Operations Centre (NSpOC).

Despite promising examples of collaboration, UKSA, DSIT, MOD, the Met Office and STFC still fall short of alignment with each other to field a strong strategy that makes sense to industry and gives them long term priorities to invest beyond short funding or political cycles. We recognise that reconciling the objectives of multiple stakeholders across government is challenging, but further effort could be undertaken to implement the broad goals and objectives outlined in foundational, cross-government documentation like the NSS.