The relatively new U.K. Space Agency, together with a host of space industry players, sponsored the U.K. Space Conference 2011 in early July. A wealth of papers from the speakers has been posted on the Internet, with interesting details and much background on the sector.

A recap of the event by Intellect, the U.K. technology association, says that the conference “enabled the community to engage with the U.K. Space Agency and help set the priorities for the agency’s leadership in the U.K. space sector.” The lengthy list of speakers, including high-level government officials, supports this assessment.

The U.K. space scene has seen a lot of recent change, according to Adrian Smith, director general of the Knowledge and Innovation Group within the government’s Department for Business Innovation and Skills (BIS — roughly the equivalent of the U.S. Commerce Department). Smith pointed to the creation of the U.K. Space Agency, which became fully functional in April 2011. He also noted the Space Innovation and Growth Strategy paper (described in our April 2010 column, “U.K. Space Innovation and Growth Strategy”) and establishment of an International Space Innovation Center alongside a European Space Agency facility in Harwell, England.

These developments are based on much analysis and a swath of details on the contributions of the space sector to the U.K. economy. Among other figures, the BIS presentation pointed to direct employment of 24,900 with value added per employee of three times the national average and six times more R&D intensive than the economy as a whole. By 2020, the U.K. space sector is “predicted to be worth £14.2 billion ($23 billion) per year and supporting 115,000 jobs in the United Kingdom.”

Another set of market data at the conference estimated that the total market value for the space sector, including everything from fixed satellite service to launchers to global navigation services, will reach $375 billion by 2019.

Based on these contributions, the U.K. government has ambitious goals for the sector, including anticipated reform of national legislation and regulation, focused on themes centered around the concept of growth through new opportunities, exports and innovation.

I was struck, nevertheless, by one presentation concerning the public investment perspective on space business. Vicky Pryce, senior managing director, economics, at FTI Consulting, warned that the U.K. economy is growing, but recovery is uncertain — times are tight and the government will be closely watching all public expenditures. Thus, requests for the government to as much as double its investment in the space sector by 2020 seem to be “unlikely,” given the state of public finance.

Pryce offered valuable advice on how to justify government support against the backdrop of U.K. Treasury Department guidance for appraising public sector investment; merely noting the turnover and employment of the space industry is essentially irrelevant, in her view. She argued that the claim that public funding would enable huge sales and exports is a non-starter, because the obvious response is that if the project is such a winner, why is commercial backing unavailable? She noted that the claim that commercial funding is unavailable leads to the question of whether the project is too risky in the first place.

Some better arguments included targeted assessments of why a project generates substantial R&D spillover. She said that there needs to be clear reasons why government should be involved, perhaps for a marginal project that only would be viable with such funding.

She also noted that post-implementation evaluation of previous programs could provide good evidence on potential impacts of future proposals. The event showcased a lot of such evidence, as industry players described past and current space projects. For instance, Astrium described how the U.K. industry has been building telecoms satellites for more than 40 years, keeping U.K. space technology at the cutting edge. Astrium stressed how initial small seed funding from the government has enabled “huge return multipliers on the technology investment.” It gave real world examples of how U.K. R&D investment has shown “real and consistent return … over the course of many programs.”

All in all, the conference closely linked industry with public policy and future contributions to the U.K. economy. Papers from the event are posted at http://www.intellectuk.org/uk-space-2011-event-presentations.

Gerry Oberst is a partner in the Hogan Lovells Brussels office.