Today the region has its sights set on the stars – leveraging its rich industrial heritage and skilled workforce in order to position itself alongside Lausanne, Toulouse and Los Angeles as a leading location for the space sector. In this article, Alexander Rose explores how public funding is being used to ensure the North East of England is at the forefront of a sector estimated to be worth £1.45 trillion in ten years' time.
Why is the Space Sector a UK government priority?
The Labour government set itself five missions upon coming to power in July 2024, the first of which was to "get the UK’s economic growth to the highest sustained level in the G7 by the end of Labour’s first term".
This bold statement will only be achieved if the government is able to quickly and effectively support the growth of sectors with high potential.
The economic potential of the space sector
Space is not just the final frontier; it represents an incredible economic opportunity that is only beginning to be realised.
According to McKinsey research, the global space economy is projected to reach $1.8 trillion by 2035 (adjusted for inflation), up from $630 billion in 2023. This growth is anticipated to be primarily driven by the increasing demand for enhanced connectivity through satellites, including positioning and navigation services, as well as advancements in AI and machine learning.
As we continue to push the boundaries of what is possible in space, new economic opportunities will emerge, promising significant returns and transformative impacts on our world.
Many businesses will see their growth prospects propelled forward by these developments, much like how Uber rapidly expanded using satellite technology and smartphone software to connect passengers with drivers and provide directions.
This $1.8 trillion forecast (£1.45 trillion) encompasses both "backbone" applications (such as chips for satellites, launchers, and GPS) and "reach" applications (where space technology helps companies across various industries generate revenue).
In 2023, the UK's space sector was valued at £18.9 billion, with around 18% of the economy already dependent on space-derived services, especially satellite communication.
The UK stands out as a significant player in the global space industry, having attracted 17% of the $46 billion in private capital invested worldwide between 2015 and 2023.
Why the North East of England is well positioned to benefit from the growth of the commercial space sector
The North East is a good location for companies with high growth potential – salaries are often lower than in other parts of the country, but at the same time there is a highly skilled workforce, which is in part linked to the five universities in the area.
The geography also works in the North East of England's favour when it comes to space technology. For example with satellites, the North East of England benefits from its Northerly latitude (which is helpful because most satellites are designed to operate on polar orbits) and is close to the sea, which can assist the safety of launches. For manufacturers, the area has many former industrial sites which are of a large enough scale for factories to be built.
The main reason through is that the North East has been quick to spot the opportunity that space presents and is investing in specialist infrastructure to support the development of the space sector.
The North East Space Skills and Technology Centre
The North East Space Skills and Technology Centre ("NEEST") is a £50 million state of the art facility developed by Northumbria University, with investment from the UK Space Agency, as well as the space and satellite division of Lockheed Martin. The facility will be built in Newcastle City Centre and link experts from within industry with leading academics. It will also equip students with the skills needed to take on roles in the space sector, as well as pioneer research and innovation in areas such as optical satellite communications, space weather and space-based energy.
It is anticipated that NESST will directly support the creation of over 350 jobs and inject over £260 million into the North East economy over the next 30 years, playing a critical role in the government’s Plan for Growth.
Professor Andy Long, Vice-Chancellor and Chief Executive of Northumbria University, said: “NESST will be a game-changer for the whole of the North East, ensuring the region becomes a major hub for innovation in the global space economy.”
The North East Space Communications Accelerator
The North East Space Communications Accelerator is an exciting collaboration between Northumbria University, Durham University and Newcastle University, as well as the North East Combined Authority, Space North East England, the North East Space Leadership group, and 14 other industry partners which will launch in early 2025.
In November 2024, NESCA received a grant of £2.5 million from the Engineering and Physical Sciences Research Council to deliver "impact acceleration" activities to space sector related research and innovation in the region, embedding relevant skills and creating new opportunities for knowledge exchange that lead to high-skilled jobs and economic growth in this sector.
Professor Vincent Barrioz said that “NESCA will provide the structure and resources to ensure that innovation taking place in our universities is driven by, aligned with, and delivered in collaboration with regional partners to deliver place-based impact. Specifically, it will bridge the gap between space research and industry-ready products launching in the market".
Conclusion
The conditions are right for the North East to be at the centre of the UK's plans to develop the space sector in the coming years. There is political support from politicians, such as North East Mayor, Kim McGuinness, but also a recognition that to seize the opportunities requires industry and academia to work closely together to create a clear pathway where ideas and technical innovations can be turned into commercial products. If this can be achieved in the coming years, the space sector can become the economic engine of the North East of England.
DWF Law LLP is the largest legal services business with an office in the North East of England. We have experience of advising on a range of space sector projects including R&D initiatives, space skills facilities and the funding of works to create the UK's first spaceport. Please contact Alexander Rose if you would require legal advice on how to deliver a space related project.
