Scotland’s space sector: a launchpad for economic growth

Discovery space shuttle on launchpad

By Steven McGinty

In March, the UK Space Agency announced it had awarded £50,000 to the University of Strathclyde’s Scottish Centre for Satellite Applications (SoXSA) for its work with Glasgow City Council to attract entrepreneurs and start-ups to Glasgow’s innovation hub, Tontine.

Six companies will benefit from the support, which includes space industry specific business support, dedicated workshops and expertise, and administration and accommodation costs for two years.

The award is another sign of faith in Scotland’s burgeoning space industry, which has seen it become a global leader in the ‘New Space’ economy.

The development of New Space

The space industry, like many other technology fields, has been traditionally dominated by nation states, often in terms of national security.

But now, a new space industry is emerging, where private companies and entrepreneurs are developing innovative products and services in or for space. Reasons for this include reductions in funding to national space agencies, such as Donald Trump’s recent cuts to NASA, as well as the private sector’s success in innovation. For example, the company Space X has managed to launch rockets that had previously been into space – a practice which has been estimated to reduce the first stage of space flight from $60 million to $500,000.

Scotland’s role

Within a few miles of Glasgow’s city centre, a small number of research groups and private companies have gained international reputations for their work on space technologies.

For instance, Glasgow – a city more known for its heavy industries and shipbuilding – has found a niche in manufacturing low cost nanosatellites. This has led to Glasgow being crowned ‘Europe’s Satellite City’.

Glasgow’s first satellite company, Clydespace, has been tremendously successful over the past decade by developing CubeSats (a satellite the size of a wine bottle). These have been used in a range of missions, including UKube-1, the first mission to be commissioned by the UK Space Agency as a demonstrator for space technologies.

The city has also seen investment from Spire Global – a satellite powered data company headquartered in San Francisco. Spire’s satellites, which are used to gather data on weather, maritime, and aviation, were built by Clydespace. Peter Platzer, CEO of Spire, explains that:

We have up there about 20 satellites, all exclusively built here in Glasgow.”

Mr Platzer highlights that Scotland’s confidence in Spire was one of the reasons that they opened their European office in Glasgow’s Skypark. The company received a £1.5m Scottish government grant through the agency Scottish Development International (SDI).

Scotland’s low cost base and universities with strong interests in engineering and space technologies were also highlighted as key selling points.

Young innovators have also sought to get involved in Scotland’s space sector. For example, Tom Walkinshaw, founded Alba Orbital from his bedroom when he was unable to secure a job in the space industry. His company provides PocketQube satellites (based on a design of one or more 5cm cubes) and now employs 10 skilled employees. Alba Orbital’s first satellite, Unicorn-1, is backed by the European Space Agency and is due for launch later in the year.

In academia, the University of Glasgow’s LISA Pathfinder team won the 2016 Sir Arthur Clarke Award for “Space Achievement in Academic Research or Study”. The award was given for the team’s work on developing the Optical Bench Interferometer (OBI) for the European Space Agency’s LISA Pathfinder spacecraft – a demonstrator aimed at measuring gravitational waves in space.

The future of Scotland’s space economy

A report by London Economics investigated the potential benefits of a spaceport in Scotland.

Prestwick Airport in South Ayrshire and Machrihanish, near Campbeltown, are currently competing to win a licence from the UK Government.

London Economics have set out three main advantages to having a local spaceport:

  • Spaceport operations – The activities associated with a spaceport will lead to the direct creation of jobs in commercial spaceflight or providing satellite launches, as well as indirect benefits for local suppliers.
  • Space tourism – Tourists visiting space stations or taken part in space travel are also likely to spend money in the surrounding areas and on other attractions.
  • Space-related education – Spending will increase on research and development due to the creation of a spaceport.

Tom Millar, managing director of DiscoverSpace UK, has also stated that sending small satellites into space would be a ‘viable revenue stream’. A local spaceport would reduce the costs for Scottish satellite companies as at the moment they currently have to ‘piggyback’ onto launches with larger satellites.

The report concludes by finding that a spaceport in Scotland would increase growth from 9% to 10% of the UK’s space economy in 2030.

The implications of Brexit

The results of the 2016 EU Referendum has caused uncertainty for the Scottish space sector. For example, many companies will be concerned for the rights of EU national employees, as well as their ability to recruit from this workforce in the future.

The Financial Times has also reported that changes in terms could keep UK companies out of lucrative European space contracts, such as the €10bn Galileo satellite navigation system. The European Commission are looking to change the terms of the Galileo project so that contracts can be cancelled if a company is not based in a member state. They also require companies to pay the costs of finding a replacement. If these terms are approved, it would effectively rule out UK-based companies bidding for EU projects, which would have a negative impact on the sector’s growth.

Final thoughts

Scotland’s space sector is estimated to be worth £134 million and accounts for 18% of all UK space industry jobs. Its success has been built on a combination of government support, talented entrepreneurs, and a supply of skilled engineers.

As the industry continues to grow, there will still be an important role for government, particularly in supporting innovation centres and granting licences for UK spaceports. The promotion of STEM (science, technology, engineering and maths) subjects will also be crucial, as we look to develop a new generation of space entrepreneurs to keep us ahead of this new industrial space race.


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