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Utilising SME’s: Creating Jobs and Growth in the Space Technology Sector

By: Paul R.H. Williams, CEO, ISP International Space Propulsion Ltd.

Introduction

In Europe, the niche space technology sector is controlled by a small number of Large System Integrators (LSI’s), with support from regional and non-European component and equipment suppliers.

Competitors from the US are also active here, offering attractive commercial products to encourage further cost efficiency. This creates a tight commercial market, with limited profit- and growth-margins and high cost pressures.

To minimise wastage, the LSI’s optimise their workforce as projected workload dictates and this, along with natural desire for personal development, emboldens certain individuals to establish external businesses and develop competitive products.

The environment for the Small/Medium Enterprise (SME) thus exists.

Barriers

For these entities to operate successfully, they must have ready access to appropriate funding streams and sources of commercial and political support.

The LSI’s are, by nature, suspicious of smaller businesses operating on an equal level, which are often misperceived as direct competitors. With such tight margins in the market, any further competition is unsurprisingly seen as a potential profit dilutor.

A comfortable, historical relationship with the LSI is nonetheless often key to obtaining support from this source, especially if the product or service offered duplicates an existing (sometimes less efficient) capability.

Government supported funding for space is managed though the UK and European Space Agencies. Although accessible, the bid process and paperwork involved can be daunting, time-consuming and difficult for a SME to absorb, as the overhead resource does not exist as in larger corporations.

In the current financial climate, more traditional sources of funding for product or service development are exceedingly difficult to access.

Generating Jobs and Growth

The sector is historically vulnerable to market forces, weak political strategies and high staff turnover. The experience, knowledge and heritage of UK space industry participation and development could lie as much with the SME’s as it does with the LSI’s.

SME’s, then, have a major part to play in generating the required growth in the space technology sector, whether it be training the trainers, applying technical or managerial know-how, introducing proposals, or in commercial development.

A change in approach is required to accept that and to begin to fully exploit this crucial part of the economy.

A structured access to sustainable funding and information streams, and commercial and political involvement, would enable the expertise embedded in the smaller organisations to be realised.

A regular, independently managed national forum, including input from LSI’s and Agencies, and associated participants, would greatly enhance information exchange and allow the products or services to be assessed, financed and developed accordingly with SME participation, raising the likelihood of sustained business success in the sector.

Increased efficiency and flexibility may be found by involving all UK space entities; LSI’s, SME’s, Government and Academia, working within a centralised industrial Group, rather than using the hierarchic and diverse approaches of the past. Such bodies, including political, financial and commercial arms, could maximise the efficiencies of operation and returns of investment, and act as catalysts to generating jobs and growth in the UK space technology sector.

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