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The good growth blog: space, science and the final frontier
The good growth blog is written by BGF’s executive chairman, Stephen Welton.
Like many schoolchildren born in the sixties, I watched the Apollo Moon landings with excitement, and soon declared that when I grew up, I wanted to be an astronaut.
As it happened, my career took me on a different path, which was probably for the best; nevertheless, I still remember the thrill of watching Neil Armstrong take his “one small step” on the Moon’s creviced surface. The NASA programme, and the enormous American investment in research and development that allowed it to happen, captured the imagination of people around the world.
Back then, we would hardly have imagined that by 2021, going into space would become less a “giant leap for mankind” and more a status achievement for those few billionaires with the resources to finance their own space missions.
I have nothing against Jeff Bezos or Richard Branson, with their undoubted drive and ambition – or any billionaire who chooses to invest in space travel – but I do wonder if the recasting of space travel as a leisure activity, and plaything of the super-rich, amounts to a lost opportunity to capture the imaginations of a new generation about the possibilities of space.
The initial efforts by the US and the Soviet Union to conquer space were hugely expensive and carried out largely for geopolitical reasons as part of the Cold War. But they spawned tremendous advances in science and technology that benefited almost every section of society. Cochlear implants, scratch-resistant eyeglasses and the insulin pump are just three inventions created or developed by NASA scientists. These were unintended consequences, unless you believe that it is only by pushing boundaries that significant change happens, even if that be unpredictable.
Today, space technology is far more crucial for achieving critical society-wide goals that go far beyond leisure. Without satellites, global communications infrastructure would be inoperable. Just as we are ever more reliant on our mobile devices to power and run our lives, so we are dependent on the satellites above us to manage them. But this is not just about convenience. We need the data and information provided by satellites, and crucially the insight they provide, if we are to overcome the greatest challenge of all that humanity faces – climate change.
Clearly, the forces driving space exploration are very different now than in the sixties. Space exploration is no longer the preserve of nation states, and the main motivation for venturing into space is more likely to be commercial than geopolitical (though the rise of China does complicate that picture, as does the increasing spectre of cyber warfare). All things considered, we are on the brink of ‘democratising’ space, moving towards a more inclusive opportunity beyond nations and billionaires.
One fascinating trend is that small and medium-sized businesses are now able to play a meaningful part in the space industry. BGF is proud to be an investor in one such company, Orbex, whose technology sends small satellites into space using bio-propane, a renewable biofuel that cuts carbon dioxide emissions by 90% compared with traditional kerosene-based rocket fuels.
The business, run by a team with backgrounds at NASA and the European Space Agency, hopes to make a real contribution to the space sector by reducing the environmental cost of satellite launches with its light, efficient rockets. The company is also providing high-tech jobs in the Highlands region of Scotland, close to the launch site at the A’Mhoine peninsula in Sutherland.
The UK government recognises the potential of the space industry to the economy, estimating that by 2030, the UK could capture a tenth of the global space market, up from an estimated 5.1% in 2016-17.
Currently, the majority of UK space industry income comes from “downstream” activities such as broadcasting. But that could change as UK companies, such as Orbex, play a bigger role in launching vehicles and payloads into space.
That would represent an exciting return to form. The UK has launched its own satellite before, but not since 1971. Since then, the launching of British-made satellites has typically been outsourced to countries such as Russia, New Zealand and India.
The government is part-funding the aforementioned vertical launch site in Sutherland, Scotland, which is expected to be able to handle six launches a year. Meanwhile, airports in Cornwall and Glasgow will be used as horizontal launch sites, in which planes take off from a conventional runway bearing rockets, which are propelled into space by a second launch event that takes place in the air. From north to south, we have a geographic plan for the UK, to which we need to add the regulatory framework, research focus, and investment.
Of course, nations will still compete over space. A key rationale for the UK’s space policy is to promote national security – the threats relating to space, “have never been greater”, according to a paper by Athena, an industry group.
Security concerns may also underlie the UK government’s decision to acquire OneWeb, a low-orbit satellite business that filed for bankruptcy last year. OneWeb’s satellite network can beam 5G signals from the atmosphere, potentially lessening the UK’s dependence on Chinese telecoms equipment. It may also provide an alternative to the EU’s Galileo project, which the UK has left because of Brexit, which brought this issue to the top of the agenda – in itself no bad thing. The key to success for many entrepreneurs is the ability to react, or pivot, to changing circumstances. As an independent nation state again, the UK has to be agile and nimble to succeed.
The ongoing reality of national competition over space therefore represents an opportunity for the UK, which is an acknowledged leader in the field of regulation in many areas, together with all the associated professional services to support that. There is nothing to stop the UK from becoming a leading centre for the necessary business of regulating activity in space, while also driving innovation, building on the academic prowess we already have in places like the University of Surrey and the Harwell Space Cluster in Oxford, not to mention our deep and successful aerospace industry.
Space remains the final frontier, but is equally a crucial resource that we rely on every day as we can see from many of the opportunities we regularly review here at BGF. Orbex is by no means the only relevant company in the BGF portfolio. For example, data from satellites is used by our portfolio business Gaist, which develops technology for collecting and analysing high-definition imagery of highways networks across the world. Oxbotica, which makes autonomous vehicle software, relies on satellite data to power autonomy in industry and transportation.
We are right at the beginning of this part of the technology spectrum as an area of significant investment. Firms like BGF, venture funds such as Seraphim with space technology a key focus of investment, and the increasing interest of public markets in supporting high growth companies, indicate the enormous potential of this sector.
It took NASA several attempts to get things right after the calamitous failure of Apollo 1. However, no frontier will ever be conquered if we give up at the first obstacle. That is the challenge as well as the opportunity. In future, I hope that space will not only recapture the imagination of schoolchildren, but increasingly scientists, government and entrepreneurs will show a surefootedness and determination to drive innovation for all. The solution to climate change perhaps does lie above, not just below a perforated ozone layer, but in how we look down on the planet with greater insight and collaboration.
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