D Insights
Mar 14, 2024

Responding to the Space Industrial Plan

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Responding to the Space Industrial Plan

Last week, the Government released a ‘Space Industrial Plan’ (available here).The plan builds on the National SpaceStrategy (2021), Defence Space Strategy (2022), and the National Space StrategyIn Action (2023), ‘modernising the relationship between government and industry.’ It aims to unlock the growth of the sector and supports the development of resilient space capabilities and services.

Below are a few key takeaways:

The space sector has some unique challenges but the core themes of the plan are sector-agnostic

Many of the challenges recognised in the plan are not exclusive to the space sector – modernising the relationship between government and industry is a priority for both infrastructure and national security. For example, the Defence Industrial Strategy suggests “Where there are known skills shortages, there is an opportunity for government, industry and academia to better share scarce skills.” The infrastructure sector is also looking at ways to leverage transferrable skills, particularly bringing in management experience from other sectors.

While the sector does face unique challenges such as building a compelling narrative around the importance of the UK’s contributions to the space industry, it is striking that new ways of collaboration between public and private sector, access to scaling finance and addressing skills shortages are recurring themes across our Programme.  

Recognising the space skills gap

The plan singles out the significance of the space skills gap, identifying the forthcoming SpaceWorkforce Action Plan as a benchmark against which to measure success. The D Group has written on this here, and we will respond to the SpaceWorkforce Action Plan when it is released. It is positive to see the SpaceIndustrial Plan reference the need for greater visibility, access to training and engagement with underrepresented groups as core priorities.

The challenge of finding a ‘front door’

Clarity from government as a buyer has been one of the primary interests expressed in our Programme, particularly in defence. It is often unclear as to where a new company with promising technology should go to find application or support for their product, meaning they can sometimes ‘die on the vine’. There are many different doors to push on, with concentric operating structures and purposes. It is thus welcome to see the intention of building a ‘Defence Space front door process.’

For this to work well, the ‘front door process’ should be clear and linear, with one point of entry and focused purely on helpingGovernment communicate its needs, and for industry to communicate its capabilities.

Fostering a business development and scale-up ecosystem for a complete journey of growth

Our innovation report (available here) found that where the UK has a world class research ecosystem, it could do much better at commercialising it. As the Space Industrial Plan states, the UK has had success in fostering innovative SMEs in the space sector, helping the UK become a leader in specialised applications. Accomplishing the UK’s space capability goals (such as In-Orbit Servicing, Assembly and Manufacturing) will require working at a greater scale.

Greater access to finance

Access to finance is a crucial component in scaling up. The report identifies the UK’s relative strength in early stage funding, but correctly acknowledges the need for greater scale-up funding. As the report also identifies, part of this is in challenging the investment culture around the space sector, which is traditionally seen as higher risk and more capital intensive than other emerging technologies such as AI, quantum and synthetic biology.

The report briefly mentions non-R&D funding vehicles to support this, although does not specify the nature of these vehicles.

The US has pioneered demand style stimulus (as opposed to research grants) through the ‘Other Transaction Authority’, which was to help launch the first privately owned space launch vehicle in 1982. Defined in the negative (i.e. not a grant nor a loan), Other Transactions are flexible agreements (more recently used to facilitate SpaceX first deal with NASA).

“OTA has the following characteristics:

Flexibility: OTA agreements are not subject to the Federal Acquisition Regulation, allowing for more flexible terms and conditions. This flexibility can be particularly beneficial in the space sector where technology evolves rapidly.

Collaboration: OTAs can be structured to promote partnership with consortia, fostering collaboration between government, academia, and industry.

Speed: They enable quicker contracting and development cycles, which is important in fields where the U.S. seeks to maintain a technological advantage, such as space exploration and national security.

Access: OTAs allow non-traditional defence contractors, including small businesses and startups, easier access to government contracts.” (Source)

Developing a similar mechanism in the UK could support the scaling up of space companies. However, it has been acknowledged that OTAs are outside of procurement officers’ training in the US and are treated with a degree of wariness. This would likely be replicated in the UK unless specific workforce training was introduced alongside such a vehicle.


The Space Industrial Plan does an excellent job in setting a direction for the sector and it is encouraging to see themes regularly discussed at D Group sessions reflected in the plan. However, where the plan identifies the ‘what’ of specifying challenges and what their solutions must accomplish, it does not go into detail as to ‘how’ these policies will be designed and implemented, and we look forward to reviewing these in further documentation.



The views expressed in this podcast are those of the contributors and do not reflect the views of The D Group.  

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