Outer Orbit: Industrial Strategy - The New Blueprint for UK Space Sector Growth

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Dallas Campbell: Welcome to Outer Orbit.

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I'm here with Mark Saxon, who is
the Chief of External Affairs.

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Mark Saxon: That's right.

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Dallas Campbell: What
are the External affairs?

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That sounds suitably vague.

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Mark Saxon: It is!

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Dallas Campbell: External affairs.

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Mark Saxon: Yeah, it
gives me a wide remit.

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Yeah.

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I wish.

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No, so I suppose it means that all
of the, team that work in marketing

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and communications reporting to me.

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It's Sam and Alice that are with
us today putting the show on.

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So shout out to them.

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Our, what we call our
National Capabilities and

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Clusters team reporting to me.

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Now you've met Simone, I
think before, who leads that.

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They do a lot of our engagement with
people working in the space sector,

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so in the space clusters around the
country, but also with politicians and

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local as well as national politicians.

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So that's the second team that reports
in to me, and I'm now also responsible

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for our business growth function.

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So these are different people
trying to support companies.

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So working directly with companies
to help them as they start up,

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build their companies and try
to attract customers and turn...

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Dallas Campbell: Turn them space unicorn.

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Mark Saxon: Turn them into
a space unicorn, yeah.

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Dallas Campbell: That's what we want.

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So, industrial strategy.

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Which is something we mentioned
in our main bit, but I thought we

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might just drill into the space
and the industrial strategy.

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Yes.

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What is it?

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Why do we care?

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Why is it important?

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So let's talk about what is it?

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What am I talking about when
I say industrial strategy?

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Mark Saxon: Yeah, so this is the
government's mission to get the

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economy growing again because by
getting the economy growing, we can

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spend more on our public services and
improve people's quality of life and

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it was a centerpiece of the election
campaign and they said they would

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produce this after being elected.

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They ran a consultation on it, asked
loads of questions, and then produced the

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strategy earlier this year and it focuses
on what they call the IS-8 Sectors,

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the Industrial Strategy Eight Sectors.

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But they're not descriptions of industries
in the way that we might talk about

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them in the street or down the pub.

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So one of them is advanced
manufacturing that covers lots of

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industries, spaces in that one.

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Dallas Campbell: Oh, I see.

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So space isn't like a isn't
kinda one of the eight.

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Mark Saxon: No, so advanced
manufacturing is one of the eight.

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Under that there are six, what
they call frontier industries,

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space is one of those.

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So it's a little bit like Russian
dolls nesting inside one another.

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But space is on a par with automotive
and aerospace as one of the key

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industries sitting in this advanced
manufacturing sector that the

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government wants to help and wants
to see growing and being successful.

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Dallas Campbell: Okay.

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Why do we, why should we care?

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So that's what it is.

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Why do we care about it?

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Mark Saxon: If you are a company that's in
one of those eight sectors or one of those

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frontier industries, and space is one of
those, you should care because it contains

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a lot of information about what government
wants to achieve, its objectives, how

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it's gonna help you as a business.

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Dallas Campbell: And how is it gonna help?

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Mark Saxon: And part of
that is through funding.

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Dallas Campbell: Give you money.

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Mark Saxon: It's where
the money is, yeah, yeah.

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Follow the money.

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So, it lays out lots of ideas and
opportunities within that and then

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we'll start to see those policies
and those funding pots be rolled out

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now over the coming months and years.

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Dallas Campbell: Where do
those pots get distributed?

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Mark Saxon: Yeah, they're
in different places.

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So the government for space, that's
what we're here to talk about, it's

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maintaining its funding for programs
that have been administered by the

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Space Agency traditionally, so about 135
million pounds worth of funding being

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made available through programs at the
Space Agency Fund and these are programs

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to support infrastructure development
and business growth in companies.

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It's also increased innovation
procurement funds for the defense sector.

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So being run by a new organization
within the Ministry of Defense.

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So there's more money there if
you've got space technology that's

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applicable to defense and security.

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There's some local innovation funding
that's available for space clusters and

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space companies to tap into that's being
administered, ultimately by a part of DSIT

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called UK RI UK Research and Innovation.

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But it's being made available
through mayoral authorities

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and the devolved nations.

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And I suppose the final thing to
say is that two organizations that

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most people probably won't have
heard of called the British Business

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Bank and the National Wealth Fund.

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They're being told to focus on the
industrial strategy and they're being told

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to invest in those frontier industries.

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So that now means that we've got
a kind of government source of

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investment available to space companies
and companies in other sectors.

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That's really important because those two
government backed investment organizations

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provide what's known as patient capital.

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They don't need or expect
to get a return quickly.

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So if you and I were to set up a
space business tomorrow and we had

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some people investing in us, they
might be asking us how quickly

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they're gonna get their money back

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Dallas Campbell: I'd have
to tell them very slowly.

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Mark Saxon: Very slowly, and that
would be an, that would be an okay

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answer for the British Business
Bank and National Wealth Fund.

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Dallas Campbell: What about
education and skills development?

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Mark Saxon: There's a lot of money going
on skills development, so over a billion

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pounds in investment going on skills
development in AI and digital technologies

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and quantum and things like that.

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A lot of the skills work now
ultimately goes up to an organization

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called Skills England, and they
have the remit to be able to work

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with schools on their curriculum and
their subjects and degree courses.

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Dallas Campbell: Oh, this is the
first time we've mentioned ai.

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AI has captured everyone's imagination.

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That's become one of these
things that we're all talking

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Mark Saxon: I think cause
you can touch it, right?

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Dallas Campbell: It's so
utterly transformative or

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it has the potential to be.

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But sort of space quantum and AI I
sort of feel are all transformative.

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Mark Saxon: Yeah.

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Space is funny it's a user of, or
a potential user of AI and quantum,

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and it's also a kind of supplier to
it, if you like, as well, in a way.

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So it has a dual relationship with those.

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But yeah, they're all part
of the same picture, I think.

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Dallas Campbell: So, industrial strategy.

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We know what it is.

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We know what it does.

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Is it good?

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Mark Saxon: The two main ambitions the
government has for space is to make the

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UK a leading exporter of space technology
and data and to grow more UK or UK based

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space companies that are generating
10 million pounds of revenue or more.

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If you look across industry as a
whole, not just space, all industries,

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a company generating 10 million
revenue actually isn't that big.

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So it's really a statement of where we
are in the space sector at the moment.

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We're still quite young.

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We're still commercializing.

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We're learning how to be commercial.

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Dallas Campbell: I do think we
need to get on with it though.

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Mark Saxon: This is the opportunity.

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We've got lots of small companies.

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If we can help a few of them
get big, and by big we mean

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more revenue, higher valuation.

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What does that mean?

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It means they'll employ more people.

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It means they'll be able to export
more overseas and then the kind

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of money they generate through
sales gets reinvested because they

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start to do more of their own R&D.

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They produce better products.

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They employ even more people.

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You know, and maybe one day we
have an Apple or a Microsoft, but

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for space and they're in the uk.

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Dallas Campbell: As soon as you
get governments involved, things

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generally end up to be more
complicated than they need to be.

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Mark Saxon: Yeah, the development of
departments and the development of policy

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is one of, to use a slightly scientific
word, is one of accretion, right.

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It's layering on more.

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So we don't get rid of
something completely.

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We just layer a bit more to make
it a bit different, take it in

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a slightly different direction.

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You end up with this incredibly, like
an oil painting, just paint going

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on top of paint on top of paint.

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That's kind of how we get to the, the kind
of policy that we have at any given time,

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and there'll be more to come tomorrow.

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Imagine being, you know,
an incredible engineer.

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You know, you've gone to an
incredible university, you've come

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up with some great technology.

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You've decided to set up a business.

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Maybe gone into it with your best
friend, you're really passionate

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about it, and then you want help
and you've got to navigate the

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complexity of local government support
that might be available to you.

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Support from organizations
like ourselves or Innovate.

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What's the department doing in saying?

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Oh, now there's a new bank that will lend
me money, apparently, but on what terms?

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How do I, who are they?

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How do I get to know them?

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You know, it's a really, really
difficult environment to navigate

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if what you're actually passionate
about is building great technology

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and building great products.

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Hopefully, we can provide some
help with that because I do

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understand the difficulty of it.

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Dallas Campbell: Hey,
it's the end of our chat.

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It's the end of our series.

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I suddenly thought, is there
anything that, that we haven't

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said that you want to say?

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Mark Saxon: No, I don't think so.

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I think we mentioned in the longer
form, longer episode that it's nice to

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try and finish on an optimistic note.

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Yeah.

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I'm hopeful.

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Dallas Campbell: I'm
really optimistic actually.

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When I, you know, doing this series
and actually meeting people who are on

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the front line, as it were, and seeing
that passion and that knowledge and

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that enthusiasm and that willingness
to talk about it makes me happy.

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Mark Saxon: Yeah.

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I agree.

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I think there's lots of reasons
to be optimistic and let's see

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if we can make them a reality.

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Dallas Campbell: Yes.

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There we go.

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We'll come back when
we do our next series.

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Mark Saxon: Yeah, I'd love to.

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Yeah.

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Dallas Campbell: Thank you very much.

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Thank you.

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Mark Saxon: Thanks Dallas.

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Dallas Campbell: To hear future episodes
of In Orbit, be sure to subscribe on

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your favorite podcast app and head
over to YouTube to watch the video

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versions of all of our discussions.

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And if you'd like to find out more
about how Space is empowering your

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industry, visit the Catapult website
or join them on social media.