The UK government announced a five-year, £250M (€289.2M) fund this week to foster innovation and create jobs under the country’s defense industrial strategy.
As part of the fund, five regions across the UK—Plymouth, South Yorkshire, Wales, Scotland, and Northern Ireland—will receive a unique investment plan focusing on their strengths in the defense industrial landscape.
Payload chatted with half a dozen UK space leaders to find out just how much of the investment could trickle down to their sector.
Tides changing: While the UK space industry has long shied away from dual-use talk, in part to remain attractive to investors and financial institutions who were hesitant to invest in defense tech, times are changing.
Those same institutions have become a lot more open to funding defense capabilities during the past few years in response to the war in Ukraine. The time has come for the space sector to rebrand itself, according to space officials.
“The space industry can do itself a gigantic favor by being more assertive,” Andrew Turner, the CEO of Space4Sight and a former UK air marshal, told Payload. “Rarely are technologies like space seen as dual-use, but they should all be seen as dual-use. The space industry could be talking much more broadly about the width of utility, rather than the narrowness of a particular sector.”
Good news for Turner: A lot of space companies have already taken the signal from the UK MOD to do just that.
“The strategy is explicit that defense investment must drive sovereign capability and dual-use innovation, and [that] space is central to that vision,” SatVu’s CEO Anthony Baker told Payload via email. “The MOD is engaging with commercial space companies more directly than ever before, and that’s only going to increase. We expect to see growing investment in sovereign space infrastructure.”
All in a line: But far from being a one-off announcement, the defense growth deals suggests that the UK government and MOD are doubling down on a strategy to align the civil and commercial space sectors under a cohesive vision for the future.
Last month, it was announced the UK Space Agency will be folded back into the UK’s department of science, innovation and technology. There has been worry about taking away power from the independent agency, but some space leaders, like Alice Bunn, president of UKspace and a former UKSA senior official, were hopeful that it was the beginning of a greater alignment across the UK space sector.
“Fundamentally, space is now increasingly recognized as a key capability that one needs in the defense domain,” Bunn told Payload. “Dual used to be something that was always difficult to fund…but I think we’re getting a more mature approach to that.”
Bottom line: While it’s not clear how much of the defense growth deals will be headed to the space industry, the message is loud and clear: The future of the UK’s space industry will be tied to its defense capabilities. The hope for space companies now is that the investment fuels further private capital.
“I think the danger is we’ll be investing in a relatively minor, nuanced, and unproductive manner,” Turner said. “The £250M (€289.2M) could be the catalyst for a £2.5B (€2.9B) investment into the region. That’s, in my view, how it should be seen: as a lead investor, rather than as the investment.”
