Britain's Space Sector Sets its Sights on the Japanese Market
With little fanfare, Britain's space sector has grown to account for a significant portion of the global industry, doubling its turnover in the past decade to be worth nearly GBP12 billion a year.
UK firms have now set their sights on cornering GBP40 billion of the international market, with Japan an important target market. To build on its existing business in Japan, British space companies are taking part in the ongoing Innovation is GREAT campaign.
"Traditionally, the UK has not been known for its space programme, and there are few 'high profile' stories to those outside the space sector," said Sir Martin Sweeting, group executive chairman of Surrey Satellite Technology Ltd. (SSTL), which has already set up a local entity in Japan.
"Those inside the sector have seen the UK as mostly a contributor to European missions and programmes, and as contributors to commercial space programmes being primed elsewhere in Europe," he said.
But SSTL has always been an exception to that rule and has earned a reputation for being a world-leader in the launch of small satellites. And now other firms are exploring the space market.
Surrey Satellites Found a Niche in Japan for their Small Satellites
"This picture has changed significantly in recent years, following a comprehensive study into the value of the space sector to the UK in circa 2005," said Sir Martin. "This showed, first of all, that space technology was being widely used within the UK, and that there was a significant dependence on space technology within the UK economy and society.
"It also showed that the value of the sector, measured as value-added-per-employee, was amongst the highest in the UK economy, alongside biotech and oil and gas."
Realising the potential, the UK Space Agency was set up and a growth plan for the sector was put in place, along with a European Space Agency satellite applications centre. As a result, a significant amount of inward investment has flowed into the UK.
"The sector is important to the UK as it helps rebalance the economy away from the dominance of banking and insurance," believes Sweeting. "The space sector worldwide is seeing signs of renewed commercial interest, in particular in the areas of Earth Observation - for example, imagine a Google Maps which is updated weekly or even daily - and in the information which can be extracted from such imagery to bring socio-economic benefits to a range of other sectors, from finance and insurance to agriculture, forestry, fisheries, environment, oil and gas, food water and mineral resources, disaster response and planning, energy and so on."
SSTL has developed expertise in small satellite missions that are commercially or scientifically significant to their owners. Weighing far less than a traditional spacecraft, they are cheaper and faster to put into orbit.
The company also assists foreign governments to set up their own national space programmes by hosting teams during the design, manufacture and testing of their satellite. To date SSTL has been involved in launching 47 satellites and has hosted 18 foreign teams.
The company has had links with Japan since 1994 and has since built up close working relationships with all the major space sector firms here.
There are Plenty of Business Opportunities in Japan for UK Space Technology Companies
"Because Japan has excellent capabilities in country, and the space sector is predominantly funded through the government using Japanese tax-payers' money, it has been difficult for us to be considered as a prime contractor," Sweeting admitted. "But by setting up a majority Japanese owned entity in Japan, and teaming with local prime contractors, we are hoping to make our satellite platforms, payloads and missions accessible to Japanese customers."
That should lead to a cost saving for the Japanese government and allow SSTL's partners to compete better with their rivals. The company also hopes to stimulate the commercial market in Japan, Sweeting added, pointing out that in the USA and Europe, almost 50 percent of the space sector is funded through commercial activities, whereas in Japan this figure is only around 10%.
"The availability of highly reliable, low cost space systems should permit Japanese operators to consider business that rely on small space assets; something that has already happened in Europe and the USA," he added.
And Sweeting believes that Japan holds huge potential for the UK space sector.
"Considering Europe is readily accessible to SSTL, Japan was the next logical opportunity for us," he said. "The timing is just about right. Japan also has budget pressures, which drive the government to consider more cost-effective methods to achieve their space policy. The Japan space policy has been updated to reflect the opportunities that are created through the use of small satellites in security and commercial sector.
"There is also significant pressure in Japan for companies to be more innovative and export, and SSTL is often an example which is used to show what can be achieved," he added. "Our Japanese entity will make SSTL more accessible to local potential partners in implementing their national space policy."
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Article by Julian Ryall, July 2015.