UK space sector growth promises benefits for lab R&D

Consultancy Heligan Group reports that this is illustrated by the substantial rise in the number of sector-related mergers and acquisitions within the last decade, with the five transactions recorded in 2013 increasing more than fivefold to 27 last year. 

As far back as 2021, states the Government, space industries contributed around £17.5 billion annually, representing year-on-year growth of £1 billion, as well as employing some 45,000 people. In addition, an estimated £360 billions of economic activity was generated through satellite infrastructure, claims Heligan.

Partner at the firm Simon Heath acknowledged that technical innovation and research and development underpinned much of the success.

“Advances in technology such as reusable rockets, orbital refuelling, and in-space manufacturing via 3D printing are driving the wave of innovation in the space sector,” said Heath.

“A prominent development for the UK is the growth of small satellite technologies, which are revolutionising the space industry by providing cost-effective and accessible satellite services.”

Thanks to greater state funding, falling launch costs and new technologies including satellite-based quantum key distribution, says Heligan, 2025 is likely to see increased M&A activity, itself an indicator of sector growth.

SMEs and university originated start-ups and spin-outs played a significant role in development, including for satellite components, propulsion systems, and space data analytics.

Heath continued: “Most UK space SMEs operate outside traditional aerospace hubs, decentralising the industry and fostering innovation across the country; this broader talent base is crucial for the long-term competitiveness of the UK space industry.”

This is turn has prompted corporate venture investment from the likes of Airbus and BAE Systems in space technologies, as well as from government aid, via both The UK Space Agency and Innovate UK, which .

Heath added that concern regarding national security would be likely to prompt more space infrastructure investment.

“There will also be consolidation, with the market being highly fragmented and full of young, IP-rich and fast-growing businesses. Lastly, technological advancements such as innovations in small satellite systems and reusable launch vehicles are lowering entry barriers, reducing investment risks, and creating new opportunities for space startups,” he commented.  

“The space sector is one area where the UK government is highly supportive, and this is mirrored in the private sector, with several [venture capital] investors solely focusing on frontier technologies.”