The new space race is on... Rocketman Rishi: the flight deck is yours

On the day of Rishi Sunak’s first spending review, all eyes have been on the Chancellor of the Exchequer — still only nine months into the job — rolling out his route-map for the fiscal future and plotting a path for the nation through the difficult times ahead. Quite rightly, his every word is being meticulously analysed for its significance to citizens, businesses and markets alike.

Yet there are other perspectives to be had, away from the bleak data of  Covid-racked terra firma. For a parable of the risks and possibilities facing the UK in 2021 and beyond, look to the skies: look specifically at the scores of low-earth orbit satellites fired into the heavens by the space start-up, OneWeb, which, since November 20, has been part-owned by the British Government.  

Thanks to a $500million investment, matched by Indian telecom company Bharti Global, this country now has its own mega-constellation satellite operator, building a network 1,200km above the earth that is intended to be a critical part of Britain’s new space strategy. Ground control to Major Boris, indeed.

The investment has been deeply controversial, not least because OneWeb was only permitted to exit Chapter 11 bankruptcy in the US last week. When the Government decided to go ahead with its bid in June, the Acting Permanent Secretary at the Department for Business, Energy and Industrial Strategy, Sam Beckett, took the highly unusual step of seeking formal “ministerial direction” from Alok Sharma, the Business Secretary, to proceed with the purchase — the most public means available to a civil servant to signal her doubts about a course of action. To be fair, Beckett was only doing her job, which was to present the case for strict caution in a venture that is undoubtedly buccaneering and full of uncertainty. But risk is the very essence of the new economics of space.

The era of the space race, in which the US and the Soviets pursued a proxy version of the Cold War with rockets, manned capsules, and lunar landers, is a distant memory. Today, space is a transformed arena in which entrepreneurs and venture capitalists vie for primacy: notably Elon Musk with SpaceX and Jeff Bezos with Blue Origin.  

Nation-states have to decide whether they want to be part of this new, hybrid market, in which some projects will fail but others will succeed spectacularly. Such decisions are not to be taken lightly. But to stay out of the competition entirely is the greatest risk of all.

And, until very recently, the UK has been taking that risk. We lack the resources to be a “Tier 1” space nation such as the US or China. But — to retain our commercial, diplomatic and strategic power in the great geo-political contest — we need to be alongside Japan, France, Germany and Italy in “Tier 2”; more than ever, now that Brexit is detaching us from the European Union’s Galileo system. OneWeb’s early investment prospects were shattered by the pandemic. The Government is acting nimbly and imaginatively in seizing the opportunity to snap it up at auction.

The base case for all investment in space is that the “spin-off” returns are almost always greater than the forecasters fear. For every dollar that the US government spends on Nasa its economy is boosted by at least $7: the technological yield, job creation and infrastructural bounty of space science is one of the under-appreciated success stories of the past 70 years.

True, there is no absolute guarantee that OneWeb will prosper. But its primary objective — to provide broadband connectivity to the billions of people who still lack that basic amenity — is one that UK plc dare not shirk, for it is one of the great commercial opportunities of the next decade.

More generally: if the year of Covid has a principal lesson, it is that nations must improve their sovereign resilience and preparedness for unexpected, high-impact disruption. There is no reason why — if it succeeds — OneWeb should not appreciably strengthen Britain’s national security and navigational capacity, while contributing to economic growth through innovation. The company is already capable of manufacturing two satellites a day. Its potential is not to be underestimated.