Size & Health of the UK Space Industry 2022

Question 1

About us

Accepted Answer

know. /nəʊ/v.
to understand clearly
and with certainty

know.space[1] is a specialist space economics consultancy, based in London and Edinburgh. Founded by leading sector experts, it is motivated by a single mission: to be the source of authoritative economic knowledge for the space sector.

www.know.space hello@know.space

Question 2

Acknowledgements

Accepted Answer

We would like to thank all the organisations who responded to our survey, and to those who helped promote it. We would also like to acknowledge the support of the UK Space Agency and the Department for Science, Innovation and Technology (formerly the Department for Business, Energy and Industrial Strategy) Space Directorate, and the supporting analysis undertaken by the Office for National Statistics (ONS) Annual Business Survey (ABS) team. Responsibility for the content of this report remains with know.space.

Question 3

Key findings

Accepted Answer

This edition of the ‘Size & Health of the UK Space Industry’ examines the 2020/21 financial year – a period when the country was enduring the global COVID-19 pandemic – and finds a remarkably robust industry, resiliently weathering disrupted operations to return growth in income, employment and Gross Value Added (GVA).

Furthermore, the growth in the industrial population, continuing high levels of private investment, strong exports, commercial focus and the expanded scope of the UK space industry, particularly in high-growth and emerging markets (such as space surveillance & tracking, space travel and habitation, in-orbit servicing, debris removal) is encouraging for future growth – supported by the positive 3-year outlook of survey respondents.

The findings are estimates based on research and analysis of 1,590 UK-based organisations with space-related activities. The research comprised an industrial survey (achieving a record 303 survey responses), supplemented by secondary research of more than 1,000 organisations (sources: Companies House records, statutory financial accounts, annual reports, company websites, and know.space proprietary databases).

State of the industry

All growth rates are real (inflation-adjusted) growth rates since 2019/20.

Total UK space industry income grew +5.1% in real terms to £17.5 billion in 2020/21 – the second fastest annual growth in the last seven years.
The UK space industry growth (+5.1%) outpaced the growth of the global space industry (+1.6%)[2], whilst the wider UK economy declined by -7.6%.[3]
The industry numbers 1,590 organisations, with 29 new incorporations since last year[4].
Segments that experienced growth were: Space Applications (+7%, +£843m, driving most of the growth); Ancillary Services (+13%, +£72m) and Space Operations (+4%, +£63m). One segment experienced decline: Space Manufacturing (-6%, -£134m).
The activities that saw the most significant growth were:
- By growth value: Direct-to-Home (DTH) broadcasting (+8%, +£592m); Supply of user devices and equipment (+31%, +£405m); Proprietary satellite operations (inc. sale/lease) (+30%, +£275m); and Mobile satellite communication services (+10%, +£128m).
- By growth rate: Third-party ground segment operations (+149%, +£59m); Space Surveillance & Tracking (SST) (+135%, +£29m); Legal and financial services (+106%, +£13m); Policymaking, regulation and oversight (+99%, +£37m); Launch and satellite insurance (inc. brokerage) services (+47%, £46m); and In-Orbit Servicing (+33%, +£0.3m).
The activities that had notable declines were: Ground station networks (-58%, -£293m); Location-based signal service providers (-61%, -£210m); Launch services (-53%, -£5.1m); and Launch brokerage services (-77%, -£1.3m).

Importance of the industry

Direct employment grew to an estimated 48,800 jobs in 2020/21 (from 47,000 in 2019/20), equivalent to 0.15% of the total UK workforce, supporting a total of over 126,800 jobs across the supply chain.
The industry directly contributed £7.0 billion of GVA to UK economic output in 2020/21 (0.34% of UK GDP)[5], up +1.7% since 2019/20, and a total GVA effect of £18.3 billion (including supply chain effects).
Labour productivity (GVA per employee) for the UK space industry was £144,000 in 2020/21 (down from £149,000 in 2019/20), but still 2.5 times the UK average labour productivity (£56,614).
The UK space industry workforce is particularly highly-skilled, with over 3 in 4 (77%) employees holding at least a primary degree – higher than any sector in the ONS Census.[6]
Exports remained unchanged in real terms at £5.9 billion in 2020/21, accounting for 34% of total income – up from 32% in 2019/20 and above the UK average (30%). The space export intensity increases to 57% if Direct-To-Home (DTH) satellite broadcasting is excluded.
The most important export market for the UK space industry is the Rest of Europe, representing 55% of total exports and 19% of total income (up from 48% and 15% in 2019/20, respectively).
With Research & Development (R&D) investment of £788 million (down 6% since 2019/20, equivalent to 11% of GVA), the space industry is more than 5 times more R&D intensive than the UK average.
The UK space industry has a strong commercial focus – 80% of income is commercial, comprised of sales to consumers (including DTH broadcasting) at 50% and sales to other businesses at 30%. That said, there is a strong role for public demand (20%), comprised of: Defence (10.2%), Civil Government (5.4%), European Space Agency (ESA, 2.3%), Space Agencies (2.0%), and European Commission (0.4%).
Remaining the largest single activity, the share of income accounted for by DTH broadcasting grew to 46% in 2020/21 (from 45% in 2019/20) but is expected to resume its longer-term decline as fibre broadband replaces satellites for signal distribution in the UK.
The industry is concentrated and dominated by a few large organisations, with just 14 organisations accounting for 81% of total space income, 148 for the next 13% and 1,428 for the remaining 6%. Only 162 organisations generate space income of more than £5m.
All UK regions/nations are home to headquarters of space organisations, though industrial sites (and employment) are concentrated in London, the South East, South West & East of England, and Scotland.
Services from satellites (be they UK or non-UK, and public or commercial, satellites) support wider industrial activities in the UK non-financial business economy that contribute at least £370 billion to UK GDP (17.7%), broken down by type as follows (not mutually exclusive):
- Global Navigation Satellite System (GNSS) services support £320 billion of GDP (15.3%).
- Meteorological satellite services support £212 billion of GDP (10.2%).
- Communications satellite services support £112 billion of GDP (5.4%).
- Earth Observation satellite services support £106 billion of GDP (5.1%).

Outlook for the industry

Nearly half of survey respondents experienced a negative impact of COVID-19 on their workforce and income (46% each), suppliers (45%) and demand (44%). Investments were less affected (only 29% reporting negative impact), and some respondents even reported positive impacts: notably for demand (15%), income (12%) and workforce (10%).
The ongoing cost-of-living crisis has a negative impact across the board for survey respondents notably on organisations’ own operations (79%), employees (76%), suppliers (65%), customers (62%), and investment (40%).
According to survey responses on future outlook (next 3 years), economic uncertainty was the most prevalent obstacle to commercial success (51%), followed by limitations on EU programme involvement (49%) and recruiting staff (46%).
That said, survey respondents indicated optimism with respect to near-term growth: 3 in 5 expect income to be higher in the coming three years (63%, of which 39% expect much higher). Over half (58%) expect to employ more staff, and around 1 in 2 expect higher investment (50%), increased R&D expenditure (47%). 3 in 10 expected increased exports (32%) and only 10% anticipated a drop.
UK-headquartered space companies attracted investment of £635m in total over 34 identified investment deals, with acquisitions accounting for the majority of the total investment value (75%, 15% of deals) but Venture Capital representing most of the investment volume (56%, 23% of value).
7 in 10 respondents cited support and engagement with the UK Space Agency as a key enabler for commercial success (though this may reflect bias in the sample of respondents), followed by increased spend across UK national space programme (70%) and UK funding via ESA programmes (64%).
Some survey respondents reported contributing to at least one of the United Nations’ Sustainable Development Goals, most notably Climate Action (58%), Industry, Innovation & Infrastructure (56%) and Sustainable Cities & Communities (42%), aligning with wider Government agenda (e.g. Net Zero, Science & Technology Superpower and Levelling Up the UK).

Question 4

Summary

Accepted Answer

Introduction

The UK Space Agency aims to catalyse investment to maximise the space sector’s long-term growth, deliver missions and capabilities to meet national needs and help enhance our understanding of the Universe, and champion space.[7] To guide its work, the UK Space Agency needs a means to monitor the health of the industry and to track the effectiveness of its activities and strategy.

Undertaken since 2010, the Size & Health of the UK Space Industry is a long-running study series that quantifies and tracks changes in the UK space industry. It measures if the industry is growing, and highlights the nature and source of the growth, including trends within sub-sectors, sources of income, and future expectations. It is the principal source of information on the UK space industry, and a key resource for the Government’s evidence-based strategy, policy design and decision-making – but also for the wider industry (e.g. strategy, business cases, investor decks, scientific impact).

The UK Space Agency commissioned know.space – the specialist space economics consultancy – to conduct the latest edition. In collaboration with the UK Space Agency, improvements were made to study design (expanded analytical scope, enhanced trend analysis, innovative data collection, and record survey participation) whilst maintaining comparability with previous editions.

This edition of the ‘Size & Health’ covers a particularly challenging time. The period of analysis (2020/21) was marked by the COVID-19 pandemic (with the first government lockdown starting in late-March 2020 and varying degrees of movement restrictions until mid-July 2021), and survey research was undertaken during the ongoing cost-of-living crisis (energy, inflation).

This study offers valuable findings, highlighting the resiliency of the industry in the face of successive lockdowns and disrupted operations, as well as offering an insight into survey respondents’ outlook for the next 3 years. This 2022 report summarises the findings for the 2020/21 financial year (FY).

Given the tumultuous economic circumstances since 2020, the 2021/22 in-year estimate has been conservatively forecasted using a combination of published accounts (where already filed), survey responses (factoring in respondents’ confidence in their estimate) and a three-year historical average.

Scope

The ‘space industry’ is defined to include all organisations that are engaged in any space-related activity, comprising both:

Non-commercial organisations (e.g. universities, research institutes) that secure income to contribute space-specific research and expertise throughout the industry supply chain, often in partnership with commercial organisations. Non-commercial income includes grant funding, core funding, research funding, tuition fees, departmental expenditures, and operating budgets.
Commercial organisations (i.e. businesses, companies, firms) that earn revenue from the manufacture, launch and operation of satellites/spacecraft, and from utilisation of the signals and data supplied by satellites/spacecraft to develop value-added applications. Such organisations may also secure non-commercial income (e.g. grants) to undertake specific R&D.

The term ‘income’ covers both commercial revenues and non-commercial funding.

‘Space-related activity’ is defined to include any of the following:[8]

Space Manufacturing: Design and/or manufacture of space equipment and subsystems. Including: launch vehicles and subsystems, satellites/payloads/spacecraft and subsystems, scientific instruments, ground segment systems and equipment (control centres and telemetry), suppliers of materials and components, scientific and engineering support, fundamental and applied research.
Space Operations: Launch and/or operation of satellites and/or spacecraft. Including: launch services, launch brokerage services, proprietary satellite operation (inc. sale/lease of capacity), third-party ground segment operation, ground station networks, in-orbit servicing, debris removal, Space Surveillance & Tracking (SST), space tourism, in-space manufacturing.
Space Applications: Applications of satellite signals and data[9]. Including: Direct-To-Home (DTH) broadcasting, fixed and mobile satellite communications services (including Very-Small-Aperture Terminals (VSATs)), location-based signal and connectivity service providers, supply of user devices and equipment, processors of satellite data, applications leveraging satellite signals (e.g. GPS devices and location based services) and/or data (e.g. meteorology, geographic information system (GIS) software and geospatial products), other (e.g. Quantum Key Distribution).
Ancillary Services: Specialised support services. Including: launch and satellite insurance (inc. brokerage) services, financial and legal services, software and IT services, market research and consultancy services, business incubation and development, policymaking, regulation and oversight.

The outputs of the UK space industry are used to considerable benefit by a large and increasingly wide range of public, commercial and consumer users[10]. Commercial users are defined as businesses in an industrial sector other than space that utilise satellite applications operationally to improve delivery of their core proposition. The value of commercial use is captured in the value of UK GDP supported by satellite services (p.42).

Organisation for Economic Co-operation and Development (OECD) standards

The OECD works to agree and promote international standards for measuring the space industry. In support of this and to facilitate international comparison, this edition breaks down UK space income by the OECD’s defined space sectors (called Capabilities in previous Size & Health editions).[11]

OECD also recommends a standard list space segments and the activities within them. The Size & Health already employs a more granular delineation of space segments and activity than the OECD recommended standards. [12] Thus, findings are not additionally grouped by OECD-defined segments or activities.[13]

Methodological approach

This edition maintains methodological consistency with previous editions to ensure comparability with time series to identify patterns of growth and emerging trends.

The research was undertaken employing a combination of primary research (303 responses to an online survey[14], including 187 complete responses[15] – a record number of responses from the industry) and secondary research (desk-based research of more than 1,000 organisations) to deliver comprehensive coverage of the UK space industry. Sources used for the secondary research include: Companies House records and statutory financial reports; Subscription-based databases and information sources; know.space proprietary knowledge and databases[16]; and Office for National Statistics (ONS) Annual Business Survey (ABS) and supporting economy-wide data from the ONS and the Bank of England.

For many metrics (e.g. income and employment, breakdown by segment and capabilities) the total industry estimates are produced by combining survey response data with secondary data (to validate and supplement response data, and to provide data for non-respondents). Unless otherwise stated, this is the approach taken. For other metrics where secondary data is not available (e.g. Research & Development (R&D) spending, input costs, gender split, etc.), survey responses alone are used.

The survey was voluntary and despite best efforts to maximise coverage and participation, the achieved sample of respondents may not be representative of the industry as a whole – indicators of coverage and profile of the survey respondents are provided below. This approach was taken given the infeasibility of undertaking an industry census or using a quota sampling approach.

In this edition, 303 (19%) of a total 1,590 organisations responded to the survey, accounting for 19% of total industry income.[17] The distribution of organisation size of the achieved survey sample is broadly reflective of the industry population.

Throughout the report we indicate the source and derivation of the numbers, and where the source is exclusively the survey, we note how representative the survey response is.[18] For this 2022 edition:

The segmentation of the studies since 2016 was maintained, with ‘Capabilities’ of the UK space industry updated to match the OECD’s terminology to facilitate international comparison;
Expanded identification of UK space-related organisations was undertaken, based on updated UK space-relevant conference lists. The findings presented in this report are based on 1,590 UK-based space organisations[19]; and
Micro-level secondary research of over 1,000 organisations using a wide range of secondary data sources to determine UK and space relevance was conducted.

Additionally, a number of changes were implemented:

Novel metrics were introduced (e.g. UK contribution to climate variables, scientific contribution);
Some of the metrics dropped in the 2021 (e.g. wider UK GDP supported) and 2020 (‘light touch’) editions were re-introduced;
Additional analyses of both the composition of the industry and the decomposition of industry growth were added; and
An analysis about the impact of COVID-19 and cost-of-living crisis (energy, inflation) on the UK space industry was included.

Caveats and limitations

Though the research has been conducted by independent analysts with specialist knowledge of the space industry, using best practice and best judgement to calculate robust and fair estimates, the following limitations apply:

Measurement error and uncertainty of estimation: The analysis employs estimation and approximation techniques based on survey and secondary data sources. The true coverage of the analysis and the measurement and estimation errors are unknown, but are believed to be similar to previous years, giving confidence in the historical comparability of the estimates[20].
Unidentified omissions: It is probable that some UK-based organisations with space-related activities have been missed, but any omissions are expected to be small and have a negligible impact on estimates[21].
Sample bias: Every identified organisation in the UK with space-related activities was invited to participate in the survey. The achieved sample reflects the willingness of individual organisations in the invited population to respond, rather than a random sampling process, so is likely to reflect some participation bias (e.g. those with stronger opinions may be more likely to respond). A number of checks have been undertaken to assess representativeness of the sample, and desk-based research was used where possible to validate and fill gaps in survey responses. Response rates and indicators of representativeness are noted where relevant throughout this report.
Scope: This study is intended to calculate key metrics of the UK space industry and identify trends relative to past editions, rather than to investigate the mechanisms or events driving behind observed changes. Explanation of changes is provided where supported by evidence, but we have sought to avoid speculation and, therefore, for certain metrics explanation of changes is left to further research.
Financial years: Each organisation may choose the start and end dates of its financial year, so these vary across organisations. Our estimates of space-related income and employment therefore reflect the different dates organisations choose to report for.
Exchange rate fluctuations: The reference currency for this analysis is GBP, and any input (e.g. company accounts stated in EUR) or comparator values (e.g. international statistics) must be converted to GBP using the prevailing exchange rate (Bank of England, Year Average 2021).

Note: Unless otherwise noted: all figures are in 2020/21 prices, all growth rates are real (inflation-adjusted) and are calculated as compound annual growth rates (CAGR).

Question 5

Introduction

Accepted Answer

Scope

Organisation for Economic Co-operation and Development (OECD) standards

Methodological approach

Caveats and limitations

Question 6

Size of the UK space industry

Accepted Answer

Population

The industrial population (i.e. all UK-based organisations confirmed in our research to have space-related activities in the period of analysis) is 1,590 organisations.

Income

Total UK space industry income grew to £17.5 billion in 2020/21 (up from £16.6 billion in 2019/20, inflation adjusted).[22]

By far the largest segment is Space Applications with 75% of total income. Space Applications is dominated by DTH broadcasting, and DTH broadcasting’s share of total industry income stayed largely the same at 46% (up from 45% in 2019/20, regaining its 2018/19 level of 46%), after gradually falling since 2010/11. Without DTH broadcasting, the overall space industry income would be £9.4 billion, but with Other (non-DTH broadcasting) applications worth £5.0 billion, Space Applications would remain the largest segment of UK space activity. Space Manufacturing (12.3%) is the second largest segment, followed by Space Operations (9.1%), and Ancillary Services (3.5%).

UK space industry income by segment, 2020/21

Segment	2020/21 (£m)
Space Applications	13,127
- DTH broadcasting	8,110
- Other applications	5,017
Space Manufacturing	2,150
Space Operations	1,585
Ancillary Services	614
Total	17,475

Source: know.space analysis

The table [23] below shows the breakdown of income by activity.

UK space industry income by segment and activity, 2020/21

Segment	Activity	2020/21 (£m)
Space Manufacturing (12%)	Launch vehicles and subsystems	327
	Satellites/payloads/spacecraft and subsystems	718
	Scientific instruments	93
	Ground segment systems and equipment	220
	Suppliers of materials and components	526
	Scientific and engineering support	103
	Fundamental and applied research	139
	Space test facilities	24
Space Operations (9%)	Launch services	4.9
	Launch brokerage services	0.4
	Proprietary satellite operation	1,207
	Third-party ground segment operation	98
	Ground station networks	213
	In-Orbit Servicing	1.3
	Debris Removal	1.2
	Space Surveillance & Tracking (SST)	50
	Space Tourism	6.2
	In-space manufacturing	(d)
	Spaceports	2
Space Applications (75%)	Direct-To-Home (DTH) broadcasting	8,110
	Fixed satellite communication services	815
	Mobile satellite communication services	1,435
	Location-based signal service providers	137
	Supply of user devices and equipment	1,727
	Processors of satellite data	220
	Applications leveraging satellite signals/data	679
	Other (e.g. Quantum Key Distribution)	4.2
Ancillary Services (4%)	Launch and satellite insurance (inc. brokerage) services	143
	Legal and financial services	26
	Software and IT services	140
	Market research and consultancy services	177
	Business incubation and development	54
	Policymaking, regulation and oversight	74
Total	All activities	17,475

Source: know.space analysis
Note: (d) signifies that this figure has been suppressed to avoid disclosure of individual survey responses.

Another way to break down UK space industry income is by capability (equivalent to OECD ‘sectors’). This breakdown shows which high-level space capabilities UK organisations support with their space activity. Analysis of UK space industry income by capability / OECD sector highlights a strong focus on Broadcasting. Organisations with capabilities in wider Satellite Communication (excluding Broadcasting), Defence/Military and Positioning, Navigation, Timing (PNT) (including GNSS) also account for large shares of income.

UK space industry income by capability (equivalent to OECD ‘sectors’), 2020/21

Capability / OECD Sector	2020/21 (£m)
Broadcasting	8,676
Satellite communication (excl. Broadcasting)	3,138
Defence/Military*	1,824
Positioning, Navigation, Timing (inc. GNSS)	1,737
Space technologies	453
Earth Observation (excl. Meteorology)	445
Generic technologies / components (e.g. AI)	440
Space Transportation (inc. launch)	331
Science	188
Space Exploration	166
Meteorology	79
Total	17,475

Source: know.space analysis

Note: OECD does not define defence/military as a distinct sector but suggests the tracking of different types of procurers of space products and services including defence organisations. Previous editions of the study have included defence/military as a separate capability, and we retain this to show the distinction between civil and military sectors.

Analysis by customer type reveals the strong commercial focus of the UK space industry – 80% of total income is commercial, comprised of sales to consumers (including DTH broadcasting) at 50% and sales to other businesses at 30%. That said, there is a strong role for public demand (20%): Defence (10.2%), Civil Government including Research/Science (5.4%), European Space Agency (ESA, 2.3%), UK and Other Space Agencies (2.0%), and European Commission (0.4%).

UK space industry income by customer type, 2020/21

Customer type	2020/21 (£m)
Commercial	13,919
- Consumer (B2C)	8,695
- Business (B2B)	5,224
Defence/Military	1,784
Other Civil Government	661
European Space Agency (ESA)	405
Research/Science Funding Body	290
Other Space Agency	182
UK Space Agency	166
European Commission (EC)	67
Total	17,475

Source: know.space analysis

Exports

In terms of exports[25], the UK space industry generated almost 34% (£5.9 billion) of income from abroad (up from 32% in 2019/20)[26]. At 34%, the UK space industry’s export share is higher than the export share of the UK economy as a whole (30%).[27] The picture improves further if DTH broadcasting – which has a strong domestic market focus – is filtered out. Indeed, the export share of the UK space industry excluding DTH broadcasting stands at 57% in 2020/21.

The most important export market for the UK space industry is the Rest of Europe[28], representing 55% of total exports and 19% of total income (up from 48% and 15% in 2019/20, respectively). The second and third most important markets are North America and Asia & Oceania (19% and 12% of total exports and 6% and 4% of total income, respectively).

UK space industry income by customer region, 2020/21

Location	2020/21 (£m)
UK	11,550
Exports	5,926
Rest of Europe	3,264
Northern America	1,098
Asia & Oceania	728
Central & South America	360
Middle East & Northern Africa	274
Rest of Africa	201

Source: know.space analysis

Imports

We estimate that more than half (57%) of the industry’s inputs are imported from suppliers overseas. Inputs from UK suppliers are split somewhat evenly between space and non-space sectors.

Inputs

Location	2020/21
UK space	25%
UK non-space	18%
Overseas (imports)	57%

Source: know.space analysis

Note: Based on a combination of survey responses from 2022 and historical responses[29] to increase accuracy.

Gross Value Added (GVA)

In 2020/21, the UK space industry is estimated to have directly contributed £7.0 billion (up from £6.9 billion in 2019/20, inflation-adjusted) of Gross Value Added (GVA)[30] to UK economic output, equivalent to 40% of space industry income (41% in 2019/20) and 0.34% of total UK Gross Domestic Product (GDP) (0.31% in 2019/20).[31]

The majority of UK space GVA is generated in the Space Applications segment (73%). This is less than the segment’s contribution to industry income (75%). As with income, this segment is led by Direct-To-Home broadcasting (contributing 41%). When further comparing each segments’ contribution to industry GVA relative to their contribution to industry income, we see that Space Manufacturing accounts for a higher share of GVA (16%) than income (12%). Space Operations accounts for a smaller share of GVA (7%) than income (9%). Ancillary Services contributes almost the same to both space industry GVA and income (both 4%).

UK space industry Gross Value Added (GVA), 2020/21

Segment	2020/21 (£m)
Space Applications	5,099
- DTH broadcasting	2,878
- Other applications	2,221
Space Manufacturing	1,143
Space Operations	508
Ancillary Services	270
Total	7,019

Source: know.space analysis

Employment

Total employment (headcount) in the UK space industry was almost 48,800 in 2020/21 (47,000 employees in 2019/20) – equivalent to 0.15% of the total UK workforce.[32]

Space Applications also dominated employment, accounting for 67% of the industry’s total, of which DTH broadcasting is 45% of the total. Space Manufacturing employs a greater number of staff than Space Operations (19% and 7%, respectively), with Ancillary Services making up a small but important workforce (7%).

UK space industry employment by segment, 2020/21

Segment	Employment 2020/21
Space Applications	32,810
- DTH broadcasting	21,944
- Other applications	10,866
Space Manufacturing	9,490
Space Operations	3,238
Ancillary Services	3,234
Total	48,772

Source: know.space analysis

Employment by gender

Based on survey responses, we estimate that more than 3 in 4 (76%) of UK space industry employees are male, and less than 1 in 4 (24%) are female.

Gender	2020/21
Male	76.2%
Female	23.7%
Other (inc. non-binary)	0.1%

Source: know.space analysis
Note: Based on a combination of 2022 and historical (2018-2021) survey responses to increase coverage.

Productivity and Skills

The labour productivity (GVA per employee) for the UK space industry in 2020/21 is estimated at £144,000 (down from £149,000 in 2019/20, reflecting relative movements in GVA and employment) – 2.5 times the UK’s average labour productivity in 2020 (£56,614), suggesting the space industry continues to outperform the wider economy in terms of productivity. [33]

ONS data can be used to compare the labour productivity of the UK space industry to that of other industries. The UK space industry’s high relative labour productivity signals that UK space workers are some of the most productive in the UK. Space industry labour productivity is higher than that of the ‘Information & Communication’ and ‘Manufacturing’ industries, and similar to that of the ‘Financial & Insurance’ industry.

Labour productivity of the UK space industry relative to the UK economy

	Labour Productivity (£)
Space	56,614
The UK economy	143,923

Source: know.space analysis and ONS data[34]

This high level of labour productivity reflects the particularly skilled workforce of the UK space industry. Using survey data, we estimate that most employees have undertaken university education, with over 3 in 4 employees (77%) possessing at least a bachelor’s degree. In terms of the ‘share of employees holding a higher degree, first degree or HNC/HND and equivalent qualifications’, the average estimated qualification level of space industry employees is higher than any sector covered by ONS labour force data.[35] This applies for the whole space industry and all four of the value chain segments. However, further research would be needed to test how representative our sample is of the wider industry population.

Research and Development (R&D)

An estimated £788m was spent on space-related R&D (equivalent to 4.5% of total industry income) in 2020/21 – a decrease of 6% since 2019/20 (which had seen an increase of 17% from 2018/19). This R&D investment was funded almost equally from internal (49%) and external[36] (51%) sources. Investment in R&D can have a long and broad economic effect if it generates new knowledge, technologies, capabilities and derived products and services. This is particularly true in the space industry whereby capabilities developed in the R&D-intensive manufacturing and operations segments are commercialised in the applications segment and by commercial users.

With the equivalent of 11% of direct industry GVA invested in R&D, the UK space industry’s R&D as share of GVA is more than 5 times the UK business average.[37] About 1.8% of the total UK R&D spending by businesses is space-related.[38]

UK space industry R&D expenditure by source, 2020/21

Funding type	2020/21
External funding	51%
Internal funding	49%

Source: know.space analysis

Note: Based on a combination of 2022 and historical (2018-2021) survey responses to increase coverage.

Industry composition

The UK space industry covers the full spectrum of organisation size (in terms of space-related income and not total organisation income), from start-ups with low space-related income to multinational conglomerates turning over tens of millions in space-related income. However, the space industry is concentrated and dominated by a few large organisations, with just 14 organisations accounting for 81% of total space-related income, 148 for the next 13% and 1,428 for the remaining 6% – a similar pattern to 2019/20. Only 162 organisations generate space income in excess of £5m.

Size composition of the UK space industry by space income band, 2020/21

Space income band	Number of organisations	Space income 2020/21 prices (£m)	Aggregate share of total space income
Less than £5M	1,428	1,034	5.9%
£5M-£50M	140	1,815	10.4%
£50M-£100M	8	517	3.0%
>£100M	14	14,110	80.7%
Total	1,590	17,475

Source: know.space analysis

International comparison

It is important to contextualise the UK’s activities in space by examining what other countries are doing. Though this is a challenging task due to the limited availability of consistent global data and differing definitions of the ‘space industry’, we can explore UK performance in different areas, such as government spending for space, the provision of climate monitoring data sources, and science outputs.

The UK government spends 0.05% of its GDP on space, which is 5 times lower than the United States (US, 0.24%), 4 times lower than Russia (0.20%) and almost 3 times lower than France (0.13%). It is, however, similar to Italy (0.07%), Germany, Belgium, and China (all 0.06%), and higher than Spain (0.03%) and Canada (0.02%). For the biggest European spenders, the largest expenditure is subscription to ESA programmes, which distributes the funding to the space industry through the geographical return mechanism).[39]

Government spending on space as a share of GDP, 2021

Country	Share
United States	0.24%
Luxembourg	0.21%
Russia	0.20%
Azerbaijan	0.14%
France	0.13%
Lao	0.09%
Japan	0.09%
Bolivia	0.07%
Italy	0.07%
India	0.06%
Belarus	0.06%
China	0.06%
Germany	0.06%
Belgium	0.06%
Kazakhstan	0.05%
Iran	0.05%
United Kingdom	0.05%
Angola	0.04%
Norway	0.04%
South Korea	0.04%
UAE	0.03%
Switzerland	0.03%
Oman	0.03%
Spain	0.03%
Czechia	0.03%
Egypt	0.03%
Nigeria	0.02%
Argentina	0.02%
Canada	0.02%
Portugal	0.02%
Finland	0.02%
Romania	0.02%
Tunisia	0.02%
Slovenia	0.02%
Australia	0.02%
Sweden	0.02%
Israel	0.02%
Myanmar	0.02%
Austria	0.02%
Netherlands	0.02%
Indonesia	0.02%
Hungary	0.02%
Greece	0.02%
Qatar	0.02%
South Africa	0.01%
Algeria	0.01%
Thailand	0.01%
Denmark	0.01%
Poland	0.01%
Ukraine	0.01%
Vietnam	0.01%
Taiwan	0.01%
Morocco	0.01%
Saudi Arabia	0.01%
Pakistan	0.01%
New Zealand	0.01%
Singapore	0.01%
Ireland	0.01%
Chile	0.01%
Bangladesh	0.00%
Colombia	0.00%
Brazil	0.00%
Malaysia	0.00%

Source: know.space analysis and Euroconsult[40]

However, it should also be caveated by the fact that different countries have different definitions of space (notably around the extent of the inclusion of defence activities).

Currently, several other countries conduct some form of reporting on the size and growth of their space industries, but true international comparisons are not yet feasible: a lack of standardisation in definitions in scope can lead to misleading comparisons of ‘total’ industry sizes. Some countries only measure their upstream manufacturing base (normally because they survey both their aerospace and space industries together, like France and Japan), or they may include space-adjacent employment, like the US.

Sample of international space industry surveys

Country industry survey	Outputs
The USA has various industry surveys, estimating the largest national space industry	2022: $200bn revenue, 354k employees
Canada’s annual ‘State of the Canadian Space Sector’ features both upstream and downstream segments	2020: $5.5bn revenue, 11k employees
France’s ‘La filière aéronautique et spatiale en France’ focuses mainly on upstream companies	2020: €10.8bn revenue, 32k employees
Japan’s ‘Japanese Aerospace Industry’ focuses mainly on space manufacturing	2021: £2bn revenue, 9k employees

Source: know.space analysis of national sources[41]

The Size & Health defines the space industry as comprising of organisations involved in activity in one of the four segments: space manufacturing, space operations, space applications, and ancillary services.[42] The Size & Health is therefore an attempt to measure the full range of national space activities – and not only the upstream segment, but across the whole value chain. Though recommended in the OECD guidance,[43] the UK’s comprehensive definition of the value chain for measurement is still relatively unique internationally: currently, the Canadian ‘State of the Canadian Space Sector’ is the most similar study (and therefore most comparable to the UK findings) as it also encompasses upstream, downstream and ancillary services activities.

Nonetheless, it is possible to look at other international industry reports to get a sense of scale of international space industries. Above, we show a sample of countries that survey (at least part of) their space industry. The US reports its space economy to generate $200bn a year, roughly 10 times the UK’s total income, while employing over 7 times as many people (354,000). France and Italy each employ at least 32,000 and 64,000 (upstream only) respectively. France reported €10.8bn in upstream revenue in 2020, while Italy reported €13bn in total revenue in 2021. For reference, the UK space industry generated £17.5bn in income and employed almost 48,800 employees in the headline year (2020/21) across upstream, downstream, and ancillary services activities.

Question 7

Health of the UK space industry

Accepted Answer

Population growth

The industrial population included in the Size & Health has grown on average 21% every year since the 2012 edition of this study. This year, it grew to 1,590 organisations with confirmed space-related activities.

The total population change year-on-year is 297 organisations, which includes 29 new incorporations, 309 newly captured organisations, and 41 exits.

Number of space-related organisations in the UK

Size & Health Edition	Population
2006	227
2008	208
2010	260
2012	234
2014	303
2016	697
2018	948
2020	1,218
2021	1,293
2022	1,590

Source: know.space analysis

The 29 new incorporations in 2021 and 2022 continues a steady trend of new incorporations, with 47 new space incorporations per year on average between 2000 and 2020.[44]

The 309 newly captured organisations include traditionally non-space organisations incorporated before 2021 that have commenced space activities, and organisations that were not identified in previous editions (often because of a lack of public presence or small size). Though numerous, their collective impact on income is small (£208m).

Due to the complexity of establishing which of the 309 newly captured organisations are ‘truly’ new entrants to the industry and which were active but missed in previous years, we draw a distinction between organic growth – the growth of previously captured organisations and new incorporations – and growth accounted for by new captures.[45]

Changes in industrial population and contribution to growth, 2019/20 – 2020/21

Organisation status	Number of organisations	Income growth 2020/21 prices (£m)	Contribution to income growth
Attrition (exits)	-41	-	-
Previously captured	1,293	608	72%
New incorporations	29	27	3%
New captures	309	208	25%
Total	1,590	843	-

Source: know.space analysis

Three quarters of the industry’s income growth year-over-year (y-o-y) is accounted for by previously included organisations (72%) and new incorporations (3%), and can thus be considered organic growth. A quarter of income growth (25%) is accounted for by new captures, which includes ‘truly’ new space income from new entrants to the industry but also previously unidentified income. All growth calculations elsewhere in the report refer to the total growth. This breakdown of growth demonstrates the dynamism of the industry – with new entrants such as start-ups, spin-outs, and (traditionally) non-space organisations all offsetting the industry’s attrition.

Income growth

UK space industry income grew 5.1% in real terms between 2019/20 and 2020/21, the second highest annual growth rate since 2013/14. This rate is higher than recent years (2.2% annually between 2015/16 and 2019/20) and towards the average long-term growth trend of 6.4% growth annually since the turn of the millennium. The real growth rate (2019/20 – 2020/21) falls to 2.8% if DTH broadcasting growth is excluded.

The UK space industry growth outpaced the growth of the global space industry in the same period (1.6%[46]) as well as the general UK economy, which contracted by -7.6% from 2019/20 to 2020/21.[47] This is not the first time the UK space industry has outperformed the UK economy: from 2009/10 to 2019/20, the UK economy has seen an average annual real growth of 1.7%, compared to the UK space industry’s annual real growth of 4.8% in the same period (3.5 times faster than the economy as a whole).

Given the tumultuous economic circumstances of the 2020/21-2021/22 period, the 2021/22 numbers have been conservatively forecasted using a combination of account (where already filed with Companies House), survey responses (factoring in the respondent’s confidence in their forecast), and a three-year historical average.

Survey respondents highlighted many factors that influenced the increase in income since 2019/20. The development of launch activities (e.g. vehicles, launches, insurance, spaceports) was cited by a number of surveyed organisations[48]. Other respondents also explained that their income increase was due to funding awards (e.g. from UK and European Union (EU) organisations, ESA, investors), products and services becoming market-ready, growing end-user markets, a growing space industry, and COVID-19 support. A few respondents reported factors that hindered income growth, such as effects of the UK’s exit from the EU and the COVID-19 pandemic. Importantly, it should be noted that these influencing factors reflect the opinions of some survey respondents and are thus specific to their organisations. Therefore, they may not be reflective of all UK space-related organisations and should be treated with caution.

A longer-term perspective reveals the success story of the UK space industry: industry income has more than tripled (x3.4) in real terms since the turn of the millennium (a CAGR of 6.4% since 2000/01), and increased by 68% in real terms since 2009/10.

UK space industry income, 2009/10 – 2021/22e

Year	Current prices £m	2020/21 prices £m	Real growth (y-o-y%)
2000/01	-	5,081	-
2009/10	8,334	10,401	9.9%
2010/11	9,188	11,079	6.5%
2011/12	11,087	12,817	15.7%
2012/13	11,848	13,346	4.1%
2013/14	13,347	14,694	10.1%
2014/15	13,702	14,927	1.6%
2015/16	13,998	15,233	2.0%
2016/17	14,792	15,922	4.5%
2017/18	15,242	15,956	0.2%
2018/19	16,492	16,883	5.8%
2019/20	16,528	16,632	-1.5%
2020/21	17,475	17,475	5.1%
2021/22e	17,700	17,000	-2.7%

Source: know.space analysis

Note: 2021/22 is an in-year estimate. Reflecting the considerable prevailing uncertainty, 2021/22 numbers have been conservatively forecasted using a combination of survey responses (factoring in their confidence in their estimate) and a three-year historical average (as used in previous editions).

Long-term UK space industry income, 2000/01 – 2021/22e

Year	2020/21 prices (£m)
2000/01	5,081
2001/02	5,576
2002/03	5,959
2003/04	6,525
2004/05	6,753
2005/06	7,170
2006/07	7,794
2007/08	8,776
2008/09	9,461
2009/10	10,401
2010/11	11,079
2011/12	12,817
2012/13	13,345
2013/14	14,694
2014/15	14,927
2015/16	15,233
2016/17	15,922
2017/18	15,956
2018/19	16,883
2019/20	16,632
2020/21	17,475
2021/22e	17,000

Source: know.space analysis

The aggregate-level growth rate conceals variation in performance by activities:

The segments that experienced growth were:
- Space Applications (+7%, +£843m);
- Space Operations (+4%, +£63m); and
- Ancillary Services (+13%, +£72m).

UK space industry income growth by activity, 2019/20 – 2020/21

Segment	Activity	2019/20	2020/21	Growth (y-o-y%)
Space Manufacturing	Launch vehicles and subsystems	295	327	11%
	Satellites/payloads/spacecraft and subsystems	778	718	-8%
	Scientific instruments	124	93	-25%
	Ground segment systems and equipment	270	220	-19%
	Suppliers of materials and components	492	526	7%
	Scientific and engineering support	166	103	-38%
	Fundamental and applied research	136	139	2%
	Space test facilities	22	24	8%
	Segment total	2,284	2,150	-6%
Space Operations	Launch services	10	4.9	-53%
	Launch brokerage services	1.7	0.4	-77%
	Proprietary satellite operation (inc. sale/lease)	932	1,207	30%
	Third-party ground segment operation	39	98	149%
	Ground station networks	506	213	-58%
	In-Orbit Servicing	1.0	1.3	33%
	Debris Removal	1.1	1.2	14%
	Space Surveillance & Tracking (SST)	22	50	135%
	Space Tourism	6.4	6.2	-4%
	In-space manufacturing	(d)	(d)	(d)
	Spaceports	2.0	1.9	-7%
	Segment total	1,522	1,585	4%
Space Applications	Direct-To-Home (DTH) broadcasting	7,518	8,110	8%
	Fixed satellite communication services	838	815	-3%
	Mobile satellite communication services	1,307	1,435	10%
	Location-based signal service providers	347	137	-61%
	Supply of user devices and equipment	1,322	1,727	31%
	Processors of satellite data	343	220	-36%
	Applications leveraging satellite signals/data	605	679	12%
	Other	3.9	4.2	7%
	Non-DTH broadcasting Space Applications segment subtotal	4,766	5,017	5%
	Segment total	12,284	13,127	7%
Ancillary Services	Launch and satellite insurance (inc. brokerage) services	98	143	47%
	Legal and financial services	12	26	106%
	Software and IT services	186	140	-25%
	Market research and consultancy services	162	177	10%
	Business incubation and development	47	54	15%
	Policymaking, regulation and oversight	37	74	99%
	Segment total	542	614	13%
	Total UK space industry income	16,632	17,475	5.1%

Source: know.space analysis
Note: (d) signifies that this figure has been suppressed to avoid disclosure of individual survey responses.

The activities that saw the most significant growth were:
- Third-party ground segment operations (+149%, +£59m);
- Space Surveillance & Tracking (SST) (+135%, +£29m);
- Legal and financial services (+106%, +£13m);
- Policymaking, regulation and oversight (+99%, +£37m);
- Launch and satellite insurance (inc. brokerage) services (+47%, £46m);
- In-Orbit Servicing (+33%, +£0.3m);
- Supply of user devices and equipment (+31%, +£405m); and
- Proprietary satellite operations (inc. sale/lease) (+30%, +£275m).
Despite having grown in the past year (8%), DTH broadcasting’s share of the total industry income (46%) remains much lower than in 2010/11 (69%), having gradually declined this past decade. DTH broadcasting nevertheless remains the largest single activity by some distance.
The one segment that experienced decline was Space Manufacturing (-6%, -£134m), possibly due to the need for in-person activities, which were challenging in 2020/21 due to government COVID-19 restrictions (e.g. lockdowns).
The activities that had notable declines were:
- Launch brokerage services (-77%, -£1.3m);
- Location-based signal service providers (-61%, -£210m);
- Ground station networks (-58%, -£293m); and
- Launch services (-53%, £5.1m).

Decomposition of income growth

The decompositions below highlight how Space Manufacturing’s declining income in 2020/21 (-£134m) was compensated by an increase in Space Application’s income (£843m), which accounts for most of the industry growth between 2019/20 and 2020/21.

Decomposition of income growth by segment, 2019/20 – 2020/21

Segment	Difference in space income (2019/20-2020/21), 2020/21 prices (£m)
Space Applications	843
Space Operations	63
Space Manufacturing	-134
Ancillary Services	72

Source: know.space analysis

The income of small and large organisations (<£5m and the >£100m bands) grew since 2019/20. These organisations drove the increased income of the UK space industry (£428m for organisations in the <£5m band and £643m for those in the >100m band). This compensated the decreasing income of organisations in the £5m-£50m and £50m-£100m bands (-£134m and -£93m respectively).

Decomposition of income growth by income band, 2019/20 – 2020/21

Income band	Difference in space income (2019/20-2020/21), 2020/21 prices (£m)
<£5m	428
£5m-£50m	-134
£50m-£100m	-93
>£100m	643

Source: know.space analysis

Employment growth

Direct employment in the UK space industry was approximately 48,800 jobs in 2020/21 following strong growth of 3.8% since 2019/20 – outpacing the total employed UK workforce which saw a decline in the same period of -1.4%[49].

UK space industry employment, 2009/10 – 2021/22e

Year	Employees	Growth (y-o-y%)
2000/01	15,256	-
2009/10	28,995	16.50%
2010/11	28,942	-0.2%
2011/12	32,024	10.6%
2012/13	33,882	5.8%
2013/14	37,391	10.4%
2014/15	38,522	3.0%
2015/16	41,690	8.2%
2016/17	41,929	0.6%
2017/18	44,052	5.1%
2018/19	44,040	0.0%
2019/20	46,995	6.7%
2020/21	48,772	3.8%
2021/22e	49,100	0.7%

Source: know.space analysis

Note: 2021/22 is an in-year estimate.

Survey respondents highlighted various factors that influenced the increase in employment since 2019/20. A general growth in business and increased revenue from new contracts and grants were credited by some organisations for headcount increases. A few respondents reported challenges resulting from the UK’s EU exit, indicating that they faced difficulties remaining attractive and competitive to current and prospective employees, higher costs to hire talent from the EU, and a loss of income opportunities (e.g. lower exports). Respondents also noted the uncertainty and risk of losing access to Copernicus and other large EU programmes. These influencing factors reflect the opinions of survey respondents and relate to individual organisations rather than representing the wider population.[50]

Employment in the UK space industry has grown strongly (CAGR 6.0%) since 2000/01.

Long-term UK space industry employment, 2000/01 – 2021/22e

Year	Employees
1999/00	14,651
2000/01	15,256
2001/02	15,466
2002/03	15,575
2003/04	15,397
2004/05	16,241
2005/06	17,206
2006/07	18,873
2007/08	22,789
2008/09	24,887
2009/10	28,995
2010/11	28,942
2011/12	32,024
2012/13	33,882
2013/14	37,391
2014/15	38,522
2015/16	41,690
2016/17	41,929
2017/18	44,052
2018/19	44,040
2019/20	46,995
2020/21	48,772
2021/22e	49,100

Source: know.space analysis

Gross Value Added (GVA) growth

Space GVA increased by 1.7% between 2019/20 and 2020/21 to £7.0 billion[51]. The estimate for 2021/22 space GVA is £6.9 billion (2020/21 prices).

UK space industry Gross Value Added, 2009/10 – 2021/22e

Year	Current prices £m	2020/21 prices £m	Real growth (y-o-y%)
2009/10	3,789	4,729	0.5%
2010/11	4,130	4,980	5.3%
2011/12	4,597	5,314	6.7%
2012/13	5,044	5,682	6.9%
2013/14	5,020	5,527	-2.7%
2014/15	5,132	5,591	1.2%
2015/16	5,257	5,721	2.3%
2016/17	5,663	6,096	6.6%
2017/18	6,438	6,739	10.6%
2018/19	6,727	6,887	2.2%
2019/20	6,856	6,899	0.2%
2020/21	7,019	7,019	1.7%
2021/22e	7,100	6,900	-2.4%

Source: know.space analysis

Note: 2021/22 is an in-year estimate. Reflecting the considerable prevailing uncertainty, 2021/22 numbers have been conservatively forecasted using a combination of survey responses (factoring in their confidence in their estimate) and a three-year historical average (as used in previous editions).

Question 8

Investment into the UK space industry

Accepted Answer

External investment

This analysis highlights the types, volume, magnitude, and sources of investments into the UK space industry. Research of investments[54] into UK-headquartered space companies[55] between 2012 and 2022[56] using Crunchbase found that:

More than £635m was invested in total in 2022, in 34 identified investment deals[57] (bringing cumulative investment deals since 2012 to 293).
Private investors were the source of most investment (89%, 59 investors), with non-private investors representing 11% (7 investors) of total investment.
Acquisitions accounted for the vast majority (75%) of total investment value for 2022, despite only representing 15% of total deals (5/34 deals).
Venture Capital investments represented over half (56%, 19/34) of deals, but only 23% of the £635m invested in 2022. However, when filtering out mega-deals over £100m, Venture Capital dominates total investment value.
Both the population of investors and number of investments per year have remained at a similar level over the last 10 years, albeit with some considerable fluctuations amongst the population of investors.

Population of investors, 2012-2022[58]

Year	Unknown	Private investors	Non-private investors	Total
2012	0	1	0	1
2013	0	4	0	4
2014	2	21	4	27
2015	3	63	3	69
2016	3	46	10	59
2017	5	10	12	27
2018	9	61	7	77
2019	10	46	8	64
2020	6	46	17	69
2021	0	51	0	51
2022	0	59	7	66