Lord Willetts is President of the Advisory Council and Intergenerational Centre of the Resolution Foundation. He is a former Minister for Universities and Science.
Britain can emerge from Covid more confident of what our scientists can do, more innovative, and hence more prosperous. That means backing the key technologies of the future. In the past, we have failed to exploit them.
One reason is that public funding has stopped too soon, before a new technology is fully commercial. Other countries, notably America, continue to provide public backing to support new technologies for much longer, reinforced with smart procurement. I have met American tech entrepreneurs with a contract to sell their new product to the Federal Government long before the first one had been successfully produced. It is all part of securing America’s lead in key technologies.
As Science Minister, I identified eight great technologies where Britain had a comparative advantage and there were global business opportunities. We backed them with funding to help get them to market and several unicorns, worth over £1 billion, have emerged as a result. They would not be thriving today in Britain were it not for that early support. Now Kwasi Kwarteng has identified seven key technologies which I hope he will be backing after the boost to science and technology funding in the Budget.
Space is a key one of these commercial opportunities in high tech for the UK. There is something special and exciting about space. Look at how Tim Peake has become a national hero. Attitudes to space tell us something important about a country’s willingness to look outwards. Britain was one of the original leaders in the space race. The Americans launched our first satellite for us 60 years ago (and subsequently disabled it with an atmospheric nuclear test). We launched our own satellite for the first and last time from Woomera 50 years ago.
Sadly, we then made the mistake of thinking of space as a useless luxury which wasn’t for us. You can still see on the Isle of Wight the decaying remains of a British rocket testing facility.
But Space is actually a key part of the infrastructure of a twenty-first century nation. Satellites collect the data that determine our weather forecasts. They enable us to track climate change and monitor natural disasters like floods. They give each one of us accurate information about exactly where and when we are. They synchronise financial transactions. They help our utilities to operate. They enable us to communicate across the globe.
Even through the decades when public interest and support was low, Britain’s entrepreneurs continued to do their bit. We don’t have the capacity to launch any rockets – at least not yet. So we had to hitch a ride on someone else’s launch vehicle (no wonder a Brit was the author of the wonderful Hitchhikers Guide to the Galaxy). That meant we had an incentive to develop lighter cheaper satellites where we are now a world leader.
And this gives us an opportunity. The new space race is to launch constellations of small satellites – hundreds if not thousands of them in low Earth orbit (LEO). Tomorrow marks the first anniversary of the Prime Minister’s boldest move to get us ahead in that race, when the deal was concluded taking a stake in OneWeb which is developing such a constellation.
These LEO constellations have crucial advantages. Because they are much closer to Earth than traditional big satellites much further away, the signal travels so fast that the problem of the slight time delay, latency, disappears.
This matters if you are running a B and B in the Scottish Highlands or starting a business in the West Country – or indeed if you are a teenager in Cumbria trying to play a video game with a broadband link only available by satellite. OneWeb has entered a partnership with BT to deliver the manifesto pledge of broadband access in remote areas.
OneWeb was put on the market because of the financial difficulties of its main investor SoftBank. More than ten percent of its constellation was already up in orbit – putting it ahead of the competition. And its headquarters are not in the American West Coast or a corner of Shenzhen, but in that hot-bed of high tech Shepherds Bush, London W12.
The Prime Minister decided that the British Government should bid and, in partnership with the Indian mobile phone operator Bharti Airtel, together paid $1 billion. Investors from France, US, Korea and Japan followed Britain’s lead, and now OneWeb has $2.6 billion of funding so it can complete its first constellation.
It is already more than halfway there, so the UK is now second only to the US for the number of satellites we operate. OneWeb should be providing a service North of 50 degrees in the next few months and a full global service by the end of next year.
The deal is already paying off, and the Treasury has made a healthy profit. But, even so, is it a dangerous encroachment of the state into business? We are only doing the kind of things America does all the time. Elon Musk is a great entrepreneur, but look at the funding he gets from the American Government in grants, soft loans and guaranteed contracts.
Governments can’t plan the economy sector by sector and intervene in every one. But it is an important role of Government to make some big strategic decisions about key technologies to invest in. They won’t all come right, but when they do they yield fantastic long term benefits. And these technologies are inherently disruptive – they aren’t propping up old industries. Indeed, they are often a new competitive threat to big incumbents.
The first generation of the satellites are being manufactured in Florida, but the real opportunity comes with the second generation planned for service in the next five years or so. Developing these could create a British supply chain. We need big UK-based primes which can place the contracts that help our successful small start-ups to scale up and reach the big time.
Becoming a serious player in Space is the kind of strategic decision which governments have to take. The Prime Minister may have been inspired by the example of his great predecessor, Benjamin Disraeli who faced a similar choice. The Egyptian Khedive, owner of the Suez Canal, had gone bankrupt. The Canal had been constructed by the French and the expectation was that they would obtain it.
But Disraeli swooped and bought half the company from the Khedive for £4 million (borrowed from Rothschild’s). It was a crucial reinforcement of our links to India. Gladstone was outraged, of course – but Queen Victoria loved it and the bold strategic move commanded wide support and helped keep Britain as a global power. Now there is a similar chance to be a world leader in today’s most important space race – for small satellite constellations.
There are national security angles to this. American and China have long seen technology this way, but we have been wary. Last week’s test by Russia of an anti-satellite weapon was a signal to the West that it sees our capability in this area, which it cannot match, as of real strategic significance. The Prime Minister’s new Science and Technology Council crucially brings security and economic aspects of technology together.
We have a space industry stretching from Goonhilly in Cornwall to the North of Scotland. It encompasses Guildford Harwell, Leicester and Glasgow. It is a truly national endeavour and, with this investment in a world-leading LEO, constellation it achieves global significance.