From: British National Space Centre
Posted: Sunday, March 17, 2002
1. This is the Executive Summary of the 2001 update survey into the size and health of the UK space industry. The survey was carried out by ESYS plc on behalf of the British National Space Centre (BNSC) and covers the financial years 1999/2000 and 2000/01.
2. An overview of the UK space industry and the type of companies surveyed are provided in Figure 1. This is the first 'size and health' survey to have included downstream sectors such as satellite communication service providers, user equipment providers and space insurance companies. The number of companies surveyed was 230 including 73 that were surveyed in 1998 and 157 new companies. Hence this was the most ambitious and comprehensive survey of UK commercial space activities to date.
3. The total real turnover 1 for all business categories in 2000/01 was approximately £2.9B, up 17% from nearly £2.5B in 1999/2000.
4. Downstream sector real turnover was £2.5B in 2000/01, up from just over £2B in 1999/2000. The upstream sector was responsible for a real total turnover of £436M in 2000/01, remaining static from 1999/2000 figures.
1 Real turnover is defined as total reported turnover figures adjusted for under reporting and inflation. All real turnover figures are expressed in 2000/01 terms.
5. The downstream sector seems to be growing in dominance. The ratio of downstream total turnover to upstream total turnover is approximately 4.7:1 in 1999/2000 growing to 5.7:1 in 2000/01.
Business category analysis - upstream sector
6. Space prime business is the dominant upstream activity in 2000/2001 with total turnover of £206M, down 10.5% from the previous year.
7. Growth sectors since 1999/2000 include space subsystem suppliers (+51.4%), space component suppliers (+5.9%), ground subsystem and component suppliers (+10.2%) and the contract research, design and consultancy sector (+7.3%).
Business category analysis - downstream sector
8. In the downstream sector, satellite communication service providers are the major business category, even when DTH 2 revenues are excluded.
9. User equipment suppliers also represent a significant market with a total turnover of £356M in 2000/2001. Suppliers of DTH equipment (i.e. set top boxes, satellite dishes, etc.) are dominant in this sector. Without DTH, the total real turnover figure in 2000/2001 is £79M.
Application sector and customer type
10. Telecommunications and broadcasting is by far the most important application sector. Even without DTH turnover included, this sector represents 78% of all UK space industry turnover.
11. EO 3 is the next most important application sector although it declined from 12% to 9% of total real industry turnover during the survey period.
12. Commercial business customers were responsible for 89.8% of total turnover in 2000/2001 making them the largest customer group. However, care has to be taken with this figure since it includes DTH customers, the majority of whom should be categorised as 'consumers'. Future surveys may need to include this new category of customer.
2 Direct to Home broadcasting. 3 Earth observation.
13. EU space agencies represent a significant customer base although turnover in this group declined by 16% between 1999/2000 and 2000/2001.
Employment and education
14. Total employment for all sectors has risen by 14% from 13,789 to 15,701 between 1999/2000 and 2000/2001. The majority of this growth is due to one company taking on 1,500 staff during this period. Employment growth is strongest in the satellite communications service provider, space components and research and consultancy sectors.
15. Value added turnover per employee for the whole space industry has risen slightly from £91K to £92K per employee. This compares to a value added turnover per employee figure for the upstream sector of only £53K for 2000/2001.
16. The main skill shortages identified by respondents were in a range of engineering disciplines including RF/microwave engineering, software and systems design. A comment made by several companies was the lack of good engineers with space experience and graduates of disappointing quality yet with high remuneration demands.
17. Tracking the evolution of the space sector from 1991 has only been possible for the upstream sector (but including EO value adding companies). For the upstream sector as a whole, business saw a decline between 1997/1998 and 1999/2000 falling from £700M to £449M in real terms.
18. Looking at the various upstream business sectors over a 10-year period provides a mixed picture. Year on year growth has been experienced since 1991 in space components (+3.1%), ground segment subsystems and components (+5.8%), contract research design and consultancy (+8.4%) and EO value adding (+7.5%). Over the same period, declining sectors include space prime (-4.9%), space subsystems and components (-3.2%) and ground segment primes (-13.3%). Figure 5: Breakdown of turnover by business category
19. Employment in the UK upstream space sector has declined overall since 1991 although the number has increased over the last 2 years. Current employment is 5,403, up from 5,236 in 1999/2000.
20. The workforce is also becoming more highly educated with the proportion of staff with at least a first degree increasing from 40% in 1990/1991 to 58% in 2000/2001.
21. Most businesses that responded in the current survey are optimistic about future growth prospects. More than half the firms that responded expect growth to be good (5-20% p.a.) to high (>20% p.a.) over the next 2-3 years.
22. The most pessimistic sector is the space insurance sector, which is currently experiencing difficult business conditions. This is due to an increase in space claims over the last 2 years and a related decrease in insurance capacity.
23. Key future business drivers identified were programmes such as Skynet 5 and Galileo. These programmes are particularly important to upstream firms and those mentioning them also had highly optimistic growth forecasts.
24. Fewer responses to the question of future prospects were received from firms in the downstream sector making it hard to identify key business drivers. Of the firms that did, many in the satellite communications service provision business seem reasonably optimistic about the future. The survey figures suggest that most real growth will occur in the downstream sector and especially in satellite communications and broadcasting.
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