FST JOURNAL

Britain has spent years building impressive space capability. The next task is harder and less glamorous: building the markets that give it purpose.

 For four decades, the UK has invested in the technologies, infrastructure and companies that underpin its space economy. That effort has produced a sector with real depth: strong satellite capabilities, world-class research, emerging launch activity, a network of fourteen space clusters and a policy environment that increasingly treats space as both an economic opportunity and a source of strategic resilience. The latest UK Space Agency Size & Health report estimates sector income at £18.6 billion, while satellite services support around 18% of UK GDP, worth more than £454 billion.

The next phase of UK space policy should build on that progress, but judge success differently. The test is what space capability changes in practice: better public services, stronger businesses, adoption by sectors beyond space, regional growth and fewer strategic dependencies. The policy question is no longer only whether the UK can develop space technology. It is whether the UK can create the conditions for that technology to be bought, trusted and used across the wider economy.

This calls for market formation to be treated as seriously as technology development. Funding still matters, but adoption also depends on credible customers, procurement routes, regulation, evidence of value and the hard translation work that turns promising capability into a usable product or service.

From capability to adoption

Too many promising technologies arrive with the equivalent of “batteries not included”. The hardware may be impressive, the research rigorous and the engineering world class. The UK spent £1.1 billion on space research and development in 2022/23 alone. Yet the route to use can still be unclear.

Those missing batteries are usually practical rather than technical: a compelling use case, an adoptive customer, integration into existing systems, standards, regulation, procurement and evidence that the new approach is better than what users already do.

Commercial adoption cannot be left until the end of technology development. It has to shape choices from the beginning, because technology only creates value when someone uses it, pays for it or changes a decision because of it.

 A recent discussion by the Foundation for Science and Technology on UK space policy has reflected this shift. Looking beyond the creation of the UK Space Agency and the maturing of national capability, the question for 2027 and beyond is how that platform delivers economic, public and strategic outcomes.

The National Space Strategy set an ambition to build one of the world’s most innovative and attractive space economies. The Space Industrial Plan then moved the conversation towards delivery, with a stronger emphasis on procurement, adoption of space services, regulation, investment and resilient national capabilities.

That direction is welcome because it brings demand closer to the centre of policy. If space is to become a stronger driver of productivity, resilience and growth, policy must ask who will buy the resulting products and services, what evidence they need, how they will procure them and how space companies will reach customers outside the sector.

It also requires focus. No country can lead in every part of the space economy. The UK is more likely to win internationally by concentrating effort around distinctive capabilities, strong industrial bases, high-potential firms and clear demand from government, industry or international partners.

 Markets do not emerge automatically from good technology

The space sector is rightly proud of its engineering. Yet organisations rarely wake up wanting to buy “space”. They want resilient communications, lower emissions, better medicines, improved agricultural productivity, safer transport, stronger national security or better data for public services.

That difference matters. A space company may talk about resolution, latency, payload performance or orbital capability. A potential user is often thinking about cost, risk, regulation, integration, liability, procurement and whether change is worth the effort.

Market creation starts in the user’s environment. The hardest competitor is often the status quo: the existing process, supply chain, dataset or procurement route that already works well enough.

This is why markets need institutions as well as policy statements. They need organisations that can connect industry, government, investors, regulators and end users in the space between research funding, private investment and regulation.

The Satellite Applications Catapult is part of that national infrastructure. Its role has evolved with the sector, from broad sector-building towards more targeted support for high-potential businesses: combining technical development with customer discovery, business support, investment readiness and routes to market.

Its wider value is in helping the system around a technology keep pace: unblocking common barriers, convening emerging markets, supporting regulators to understand novel activities and opening routes to international customers.

 Microgravity shows why translation matters

Microgravity and in-space manufacturing illustrate the point. More than 3,000 experiments have been conducted on the International Space Station, and the technical potential is credible. Microgravity can alter processes such as crystal growth, fluid behaviour and cellular development, with possible applications in biopharma, advanced materials and manufacturing. The UK Space Industrial Plan points to opportunities such as manufacturing pharmaceuticals and printing organs in microgravity, while companies including BioOrbit, Frontier Space and Kayser Space are developing technologies for pharmaceutical research and manufacturing in orbit.

Scientific potential, though, is only the starting point. A commercial pathway needs a real industrial or scientific problem, evidence that microgravity offers an advantage, access to orbital platforms, reliable launch and return, validation on Earth, regulatory and customs clarity and an organisation willing to buy or adopt the output.

Life sciences and manufacturing organisations do not just need to hear that space is exciting. They need to test whether it solves a problem they recognise, produces evidence they can trust and fits within the practical rules of their sector. Market formation depends on regulators clarifying the route, intermediaries bringing the right actors together and early projects generating proof that non-space users can rely on.

Work is already underway. The UK Space Agency has worked with the Medicines and Healthcare products Regulatory Agency, the Civil Aviation Authority and the Regulatory Innovation Office to support a more coordinated approach to medicines and biopharma activity in orbit. The Satellite Applications Catapult has complemented that by convening life sciences, academic and space-sector stakeholders through a Microgravity Life Sciences Working Group, developing use cases and supporting pilot projects with partners such as the Industrial Biotechnology Innovation Catalyst.

The future of in-space manufacturing will be shaped as much by adoption conditions on Earth as by what can be produced in orbit: whether customers can use, regulate, insure, classify, return and justify paying for it.

 What market-building space policy would look like

A stronger market-building approach would still invest in ambitious technology, but it would ask earlier what must be true for that technology to be adopted.

First, create credible demand signals. Businesses and investors need confidence that strategic priorities will endure long enough to justify investment.

Second, use public procurement more deliberately. Government can be an early customer where space capabilities support public objectives, but procurement should test operational value rather than manufacture artificial demand or fund another demonstration.

Third, fund translation, not only invention. Support is often strongest at the research stage and weakest during the transition towards validation, regulation and commercial readiness. Translation funding should help companies prove the customer, the advantage, the evidence required and the route into existing markets.

Fourth, remove pathway uncertainty. Clear standards and regulatory routes can be as valuable as direct funding. In emerging areas such as in-space manufacturing, uncertainty around return, customs, product classification and evidence requirements can delay investment even when the science is promising.

Fifth, connect space with user sectors earlier. Health, energy, agriculture, transport and manufacturing organisations should help shape programmes before the technology has already been developed.

Sixth, focus on where the UK can win. Market-building should concentrate resources on companies and capabilities with commercial potential, credible routes to growth and alignment with national strengths, while being willing to stop support where the evidence is weak.

There is also a place dimension. The UK’s space clusters and regional partnerships show that space policy is about where innovation-led growth happens, not only which national capabilities are built. Future policy should treat space as a route to productivity and opportunity across the UK.

The UK should continue investing in ambitious technologies and infrastructure. Technical excellence remains essential, but the next phase of space policy should also be judged by what capability changes in the real economy: whether customers are secured, businesses scale, industries adopt new tools, public services improve, international markets open, regional economies benefit, and strategic dependencies are reduced.

That means building markets with the same discipline used to build technology: creating demand, proving value, reducing uncertainty, connecting with user sectors and focusing effort where the UK has a credible route to win. Britain has spent years building impressive space capability. The next task is to make sure that capability finds the customers, evidence and routes to adoption that give it purpose.