Europe is pouring billions into space. Can Glasgow's satellite industry keep up?

ByShiona McCallum Senior technology reporter, Reporting fromGlasgow.

Key points

• According to a review commissioned by Space Scotland, space manufacturing alone accounted for more than 1, 000 Scottish jobs in 2022-23.
• Throughout Scotland, the wider space industry generated £335m in income in 2022-23 – up 69% in five years.
• As well as Clyde Space's 2018 acquisition by AAC Microtec, Glasgow-founded Alba Orbital has moved its headquarters to the US, while retaining a Scottish base and team, meanwhile.
• In 2005, a young space engineer called Craig Clark moved back to his home city of Glasgow.
• Finland's Minister for European Affairs, Joakim Strand, remarked the geopolitical situation had highlighted the importance of domestic ownership in what he called a "key strategic sector".

In 2005, a young space engineer called Craig Clark moved back to his home city of Glasgow. He'd graduated from university just over a decade before, but the only jobs he could find were south of the border. Now Craig wanted to start a firm of his own. He called it Clyde Space.

I went to school not far from the River Clyde, where the city's shipbuilding heritage was forged, and knew Glasgow had once been an industrial powerhouse. When I was a child, "Clyde-built" really meant something: craftsmanship and engineering excellence. There was a saying that I grew up with: "The Clyde made Glasgow and Glasgow made the Clyde."

What I hadn't realised until lately was that, in a different guise, that tradition is still alive. Two decades afterwards, Glasgow is a European leader in building small satellites.

Plenty of of those built here are known as CubeSats. Their basic building block measures just 10cm by 10cm by 10cm – think of something regarding the size of a Rubik's Cube. They are much smaller, cheaper and quicker to develop than the massive contraptions that you might picture when you think of satellites.

But crucially, they are modular and can be stacked together, then packed with cameras, sensors, communications equipment or other technology depending on their purpose.

And their size belies their significance. The data collected by satellites of all kinds is increasingly woven into everyday life. It helps us communicate and navigate, track ships and transport goods, monitor forests and crops, manage energy networks and understand changes to our climate.

For governments, that information can support inform decisions and respond to emergencies. As satellites have become more capable, space has become increasingly significant.

More than two decades after the first satellite firm was established there, the Scottish Administration notes more small satellites are built in Glasgow than anywhere else in Europe.

Throughout Scotland, the wider space industry generated £335m in income in 2022-23 – up 69% in five years. Excluding traditional satellite television broadcasting, it employed 2, 811 individuals, an rise of 81% over the same period.

But elsewhere in Europe, governments are committing major capital to their own satellite industries.

Could this take investment and jobs away from Glasgow? And if so, what – if anything – should the Scottish and UK governments do regarding it? And what should be the role of the state when it comes to backing significant industries? Glasgow's rise to small satellite superpower.

Perhaps the most surprising thing regarding Glasgow's success in the space industry is that it wasn't planned.

One of the catalysts was Craig Clark's Clyde Space. As smaller and cheaper spacecraft were taking off, and would go on to build Scotland's first satellite, the UKube-1, the firm specialised in CubeSats at just the right moment, a few years after it rolled out.

As well as a ready supply of engineers, crucially, the tech was built in partnership with the University of Strathclyde – which provided skills and research.

Other firms followed, including Craft Prospect and Alba Orbital. Expertise grew and a new space cluster began to form. American satellite firm Spire chose Glasgow for its European base in 2015. While established engineering and technology firms became part of the supply chain, smaller businesses developed. Listen now on BBC Sounds.

Although Glasgow remains the group's main satellite manufacturing site, "Companies started moving to Glasgow because they could see that it was possible to do it here, and there was an ecosystem that was starting to grow, " notes Andrew Strain, chief technology officer at AAC Clyde Space – the business formed after Clyde Space was acquired by Swedish firm AAC Microtec.

Shortly Glasgow was host to an "entire small satellite value chain", from components and satellite manufacturing, through to launch, spaceports and ground stations, according to Daniel Smith, founder of space marketing firm AstroAgency and the Scottish Government's trade and investment envoy for space.

There are wider benefits too. According to a review commissioned by Space Scotland, space manufacturing alone accounted for more than 1, 000 Scottish jobs in 2022-23. The wider industry generated £202m for the Scottish economy.

And as the industry grew, so did the pool of knowledge. There are now more than 100 individuals working throughout space-related activity at the University of Strathclyde, with the subject now one of the institution's strategic priorities, according to Prof Malcolm Macdonald, its chair of applied space technology. The university works directly with commercial space firms on research and tech development.

Macdonald recalls that when he graduated, there was basically no local space industry for him to join. Now, "when our graduates leave the university, they will go and work in the local space sector because it is now here in Glasgow for them", he notes.

But what's significant, Macdonald notes, is that Glasgow's satellite industry wasn't something the administration set out to establish. Instead, the process was "largely organic", notes Smith.

By any measure it's a success story. But there are warnings regarding competition from overseas.

"It's not necessarily that we're going backwards, " Macdonald tells me. "But other people are catching up." The challenge to Glasgow.

Bavaria is emerging as a significant European hub for aerospace and defence technology. Germany's Defence Ministry notes it aims to invest around €35bn (£30bn) in military space capabilities in the coming years, including more than 100 encrypted communications satellites.

For Macdonald, that kind of spending is changing Europe's space industry. Against a backdrop of the war in Ukraine and wider geopolitical uncertainty, governments are no longer simply supporting research and innovation. Increasingly, they are becoming major customers rather than just investors.

Will Lecky, co-founder and director of know.space, the space economics consultancy, notes that matters as the global playing field is not level. He notes UK public space funding falls well behind countries such as France and Germany.

"It's certainly a risk to Glasgow and the wider UK space sector that investment will follow the money and lead to longer term competitive disadvantage as activity flows elsewhere, " he notes.

Meanwhile, Finland's aerospace firm ICEYE specialises in synthetic aperture radar (SAR), satellites. It can produce images of the Earth's surface through cloud and darkness. Macdonald notes these have been employed in the war in Ukraine, where satellite imagery can provide intelligence – for example, spotting a Russian vessel in a Crimean port – when conventional optical cameras cannot.

In June, ICEYE confirmed a funding round worth more than €1bn, valuing the business at more than €10bn. The Finnish state has additionally climbed its stake and now owns around 12% of the firm.

Governments want guaranteed access to satellite communications, especially when their country is facing a crisis. Some want the satellites – and the ability to build them – within their own borders. That can have consequences for Glasgow.

"The recent increases in space spending elsewhere in Europe matter, " notes Gabriele Piazza, an economist at the London School of Economics who researches administration procurement of advanced technology.

Space is not a normal market. Where the contracts go can support determine where businesses invest, where engineers work and where expertise builds.

"Since capabilities build on themselves, firms with a large customer at home gain an advantage that lasts, " Piazza adds.

As well as Clyde Space's 2018 acquisition by AAC Microtec, Glasgow-founded Alba Orbital has moved its headquarters to the US, while retaining a Scottish base and team, meanwhile. Spire has expanded its manufacturing operation into Munich.

Meanwhile, the Scottish administration maintains that Glasgow still builds more small satellites than anywhere else in Europe. So, this is not an industry in decline.

But the bigger challenge, Smith notes, is helping businesses that start in Scotland to scale here.

"I wouldn't want it to be overly negative, " notes Macdonald. "It's more just like there are warning lights flashing that other parts of Europe are investing much more aggressively, and moving much more quickly, than we have." The case for Glasgow staying on top.

Satellite camera manufacturer Simera Sense confirmed this year that it was opening a new production facility in the city, creating 20 highly skilled jobs. The firm, which has premises in South Africa, Belgium and France, will open a high-value electronics assembly lab and office at EastWorks in Dalmarnock.

Taken together, the developments around europe is pouring billions into space. Can Glasgow' s satellite industry keep up? Point to a situation that is still moving, and the coming days should bring more clarity.