Lord Sainsbury of Turville

The Economic Potential of Space

I would like this evening to take the three objectives in turn, building on them to show how we expect to derive benefits. The first is "to maintain and enhance the UK as an internationally recognised centre for world-class space and environmental sciences and a sought after partner in international co-operation".

I believe that the first requirement, if one wants to maximise the benefits of science and technology for a country, is to have a creative and properly funded basic research capability. And this applies as much to space science as any other area. There are those who argue that if one wants to maximise the benefits that a country gets from science and technology, then one should put most of one's resources into applied research. But history suggests otherwise. In this country we have a flourishing biotech industry mainly because we have an extraordinary record of discovery in molecular biology. I believe that the way to maximise the benefits of science and technology is both to have a flourishing basic research capability and to provide incentives for scientists to transfer their knowledge into industry. Look at American universities. Those that have contributed most to local economies are those doing basic world-class research.

In this country we have, of course, world-class space scientists. An excellent example of what we can do is Beagle 2. As most of you will know, the UK-led Beagle 2 lander, carried by the European Space Agency's Mars Express orbiter, is due to land on the surface of Mars at the end of the year, to study the planet's geology and investigate whether conditions for life exist or existed. At the same time, the orbiter will investigate the Martian surface and atmosphere and will use radar to look beneath the surface for underground lakes and ice frozen in the planet's crust.

Beagle 2 has only been possible by achieving a full integration of spacecraft and science instruments, breaking away from the tradition of a spacecraft produced by industry and instrument payloads produced separately by university scientists. This working together, this development of new technology, this novel approach to platform integration and the associated high profile, shows the way we should go.

Beagle is not alone. The SMART-1 mission in the summer will be the first visit to the Moon, since the landings some of us remember so well. In spite of the difficulties, Rosetta will still visit an asteroid and in December 2004, European Space Agency's (EPA) Huygens probe will separate from NASA's Cassini and set off towards Saturn's moon, Titan. It will examine Titan's atmosphere and surface, the closest analogue in the Solar System to the Earth before life began. UK scientists are involved in six of Cassini's instruments and two on board the Huygens probe. When Huygens descends, the first instrument to encounter Titan's surface will have been made in the UK. Also, UK industry has been involved in developing the probe entry, descent and landing system and the probe control system. Science and technology advancing together again. That hand in hand approach accelerates knowledge transfer resulting from Government support for space science.

At the Ministerial Council of ESA in 2001, we committed over £130million for ESA astronomy and planetary science projects over the next five years.

It is not just space science. Environmental science from space is a growing and exciting discipline. In 2001, we also committed £147million over 10 years towards ESA's Living Planet Programme for Earth Observation to establish Europe as a major authority on global environmental issues. The Opportunity Missions in this programme are smaller, quicker, cheaper missions that respond to evolving situations or areas of immediate environmental concern. I am very pleased that the UK was successful in the first round of Opportunity missions when the UK-led "Cryosat" was selected. Scheduled for launch in 2004, its primary objective is to test whether arctic ice is thinning due to global warming.

And largest of all, literally, as the largest, heaviest satellite ever built in Europe is ENVISAT, the environmental satellite built by ESA to observe the entire planet in unprecedented detail, a "health check for the planet". It uses new techniques that allow many of its instruments to operate simultaneously, giving scientists better information on how different environmental factors interact. This is an excellent model for the future of how science and industry can work together with benefits for both. Astrium UK was the prime contractor for the overall mission and 13 major UK companies have been heavily involved in developing and supplying parts for the instrumentation and for developing the ground segment and data processing. In the longer term, many downstream industries stand to benefit from the applications of data.

The UK scientific community has also had major involvement in ENVISAT's development, both through membership of scientific advisory groups and in calibration and validation activities. As a world leader in the exploitation of Earth observation, UK scientists are poised to take maximum advantage of the data collected by ENVISAT.

I was strongly influenced during my visit to the Natural Environment Research Council (NERC)'s new Centre for Terrestrial Carbon Dynamics (CTCD) in Sheffield last year. The Centre will investigate scientific processes, which are key to the understanding of the global carbon cycle. This offers an opportunity for the UK researchers to become leaders in a vital area of scientific importance. Research at the Centre will use Earth Observation data, together with a number of other data sources, to support important environmental science. I was excited by my visit because it showed I believe how space can open exciting and extremely valuable new ways of doing environmental research. It underlines what I think is a fundamental truth that, it is no good exhorting people to use space, you have to show that it is relevant to what they are doing. In the environmental sector, I think this is increasingly recognised.

I think it is also becoming recognised in industry more widely but I do believe that we still have some way to go in delivering "down to earth" benefits from space by exploiting and delivering services based on space infrastructure and space derived data. We need to see people building successful commercial enterprises to serve the public and private sectors, which draw on our investment in space. This is why the second objective for the Strategy is "to maintain and enhance the UK as a leading user of space systems throughout the economy, to stimulate increased productivity in government, scientific communities and the market is so important". Our aim is to use space efficiently, responsibly, and with the best possible value for money for the user.

I had the pleasure of visiting Inmarsat last November [Olof Lundberg founder of Inmarsat on platform]. I was particularly struck by how it turned space technology into "down to earth" services. It identified needs and developed a viable business case for markets. Based on this, they have implemented technology, built systems and offered solutions and services for which users are happy to pay because of the benefits they provide. And this is true of Government too. It is no good coming up with a bright idea, getting the taxpayer to pay to develop it and then looking round for someone who might want to use it. We in Government are in partnership with the space community and with others, who might use space applications, to bring forward ideas with a plausible potential to be used.

You only have to look at how the use of technology and data has advanced in the past twenty years to realise that the prospects ahead are extraordinary. New businesses will be built exploiting new opportunities offered by space technology. Weather forecasting has for a long time made use of space and looking ahead it is not difficult to see opportunities to develop a whole series of new uses. Look at global positioning. In the past, this was developed as a military application but industry and governments have seen the potential for civil use. As the accuracy and reliability of satellite navigation and precision time references improve, with Galileo complementing GPS, we are sure to see services based on navigation following the same kind of growth curve as satellite communication services.

Just last week Norwich Union announced that it will be able to collect real-time vehicle data using a 'black box' device installed in a vehicle. This will allow monthly insurance payments to be calculated based on how often, when and where you use your vehicle. This will only be possible because it will use GPS technology to locate the vehicle.

And there are many others. Our airlines will benefit from a precision approach and will eventually have access to all landing aids. Our public utilities will synchronise their supply work and our financial centres will time stamp their transactions to increase efficiency and counter fraud. There will be guide devices for the blind, assistance to fishing fleets and perhaps best known provision of broadband services in rural areas, which would not otherwise have access to the web.

As we are all aware, the influence of space on our everyday lives will continue to grow during the coming century. The figures are huge. For satellite communications, it is estimated that the global market by 2010, seven years time, will be $140billion. The market will encompass mobile satellite communications for planes and ships, Internet and broadband traffic by satellite and direct to home satellite television broadcasting. The global market for satellite navigation by 2005, only two years time, is estimated at $50billion. The main markets for this are likely to be global positioning systems for cars, as I have already indicated, a vast market when there are already 200 million cars on the road in Europe today and the personal hand-held market such for mobile phones, personal organisers and computers. This is why the Government has backed so strongly Europe's decision to invest in Galileo. While it is a programme that will be of strong interest initially to the European space supply industry, Galileo will stimulate a wide range of opportunities for prospective operators, value added service providers and end-users, including both government and the private sector. Those opportunities for which UK companies are well placed should far exceed the initial expenditure.

I think it is important to realise that in 2000/1, in the UK, the downstream sector dominated space-related turnover, at £2.5bn, an increase of over 20% in two years. The upstream sector remained static at £436m. So UK commercial priorities should put a great deal of emphasis on enabling technologies that provide access to these much greater downstream markets.

Users are of course not just in the private sector. In government too, there are many potential applications and I see my role and that of BNSC as raising awareness among colleagues about these opportunities. This is not simply because space is simply a good thing, but because space may be able to help to achieve policy objectives. Again, I could list many examples: monitoring natural habitats, humanitarian relief, monitoring pollution, food security, enforcing environmental rules and many others. A particularly important project in this category is the Global Monitoring for Environment and Security (GMES) initiative, which is based on our belief in the environmental, economic and social benefits that can be gained from an internationally coordinated approach to the rapid exploitation of information from space. Likewise, growing our capabilities in industry maximises options to augment the defence of our country and our international trade.

Developing all these uses is of course linked to the provision of the systems themselves. If the markets are going in the direction I have just indicated, we want the UK to be in the forefront, so our third objective is "to maintain and enhance the UK as a major developer of leading edge space-based systems allowing innovative enterprises to deliver sustainable improvements in quality of life".

It is somewhat invidious to pick out a few companies from the many that we have in this country. I have already referred to Inmarsat. Astrium's long and powerful contribution is well known. And the innovative work of Surrey Satellite Technology Limited is much admired, from a university department, they have built a business by developing a cost-effective mix of technology and capabilities which are unequalled anywhere, bringing both technological and commercial success to the UK, while permitting many other countries to have access to the benefits of space information which they could not otherwise afford. And with the Disaster Monitoring Constellation, they have set up a very valuable international collaboration with very little help from Government.

More so than in the previous Strategy, those DTI programmes aimed at technology development and service demonstration will have a much clearer link through to our three objectives. There is an emphasis on innovation, which is a key element to achieving all three of them. And Government is seeking to spread techniques through its Space Industry Best Practice Club, which is intended to assist the development of innovative space systems.

I hope that I have given you some insight into what we in Government, with the help of the space community, are seeking to achieve. We have a clear focus, to deliver on the three objectives I have described. This means we continue to avoid national major prestige projects that are neither commercial nor good science. I look forward to the contribution DEMOS will make to our task.

There is one other challenge we have. There is no doubt that manned space exploration has a special excitement for people, and a particular attraction for young people. It does not however make a great deal of sense either commercially or in terms doing world-class science. At the same time, as I hope I have shown you, there are very many other exciting developments in space. Beagle 2 should begin to communicate some real excitement. Envisat is also communicating some of the environmental benefits that can be achieved. The phrase "a health check for the planet" clearly gets the message over. But there is still an enormously long way to go. I believe that we need to develop a new narrative that will pull together these developments and show young people how exciting space can be even without manned space, and I hope that the DEMOS report will also help us with this task.