A craft perspective | Maintaining growth in Scotland’s space sector

Glasgow-based Craft Prospect recently completed the initial review of the Ops-Sat VOLT project, a €17 million (£14.5 million) satellite mission supported by the European Space Agency (ESA), the British Space Agency (UKSA) and involving the majority of partners from Great Britain and Scotland all over the world supply chain.

The satellite will be equipped with a classical and quantum laser communication module, an intelligent hyperspectral image and processing chain for climate research, and an experimental platform for on-orbit experiments.

“VOLT brings together absolutely everything the company does into one mission,” said Jeffrey.

“Work on VOLT took about 6 years. This began with the company focusing on developing its capabilities in quantum technologies, machine learning for space operations, and systems engineering for complex and novel mission applications.

“These capabilities have developed through a series of incremental projects, initially part-funded by organizations such as the British Space Agency, Scottish Enterprise, CEOI, ESA and Innovate UK.

“This really helped us refine the technologies and demonstrate that we could advance early technologies and mission concepts to a mature stage, which in turn led to commercial agreements and formulating a way to combine it all into one new mission, which became WOLT.

Quantum key distribution in space

One of the proposed use cases for the VOLT satellite mission will be the establishment of space-based quantum key distribution, scheduled for launch in 2025.

In an era where all kinds of traditional encryption schemes are being broken, quantum cryptography seems to be the most secure method in the future. According to Fortune’s business insightsThe global quantum cryptography market size is expected to grow from approximately £119.3 million in 2024 to £486.7 million by 2032.

However, implementing this technology can be difficult. As it stands, quantum cryptography relies primarily on ground-based utility systems, which, while perfectly effective, can only deliver information over kilometers at a time.

“For financial organizations or banks around the world that want to encrypt all individual financial transactions, what you really need is a global system,” Jeffrey explained.

This is where the spatial distribution of the quantum key comes in handy. “You have a satellite that can communicate with anywhere in the world through a set of ground terminals.”

“There is really no other type of quantum system that can provide the same level of security at a global level as a space-based quantum key dispenser,” she said. “It expands existing infrastructure and helps deliver a global service.”

The use of artificial intelligence

One aspect of the VOLT mission that is of particular interest is contextual imagery. This helps bypass one of the biggest obstacles to space communication – clouds.

An imaging camera is a camera system that can look forward or down toward the ground to take a photo. From there, it uses a back-end processor with implemented AI algorithms that is used to pinpoint cloud areas.

“On the quantum side, we use it to understand where the cloud areas are, so that in space you can decide whether you want to try to communicate with a ground terminal, or whether it would make more sense to point to another place or plan to connect to the ground later ”Jeffrey continued.

According to Jeffrey, the use cases for AI don’t end there.

She says: “We (also) have a context-sensitive camera that can be used for pre-detection of objects, such as cloud detection, to help the satellite make informed decisions. We then have a separate high-resolution hyperspectral image that is connected to a data processing unit where artificial intelligence algorithms can also be implemented to do things like intelligent compression to reduce downlink requirements or analyze the images to produce specific products data on board before downlink.

“A key demonstration of VOLT will be to explore and show how this can be done in a confident and trustworthy way, because although data goes through multiple stages of processing, we can be sure it has not been manipulated by an untrusted third party before it reaches the end user.”

Scottish space ecosystem

Looking at the state of the space sector around the world, we can divide it into two sections: new space, which includes smaller, more agile space companies, and traditional space, which is larger space organizations that perform large interplanetary missions.

“What really helped us was that Scotland had a general focus on new space,” said Jeffrey.

New space used to be associated with high risk, but some companies now have decades of experience behind them, and she says that’s no longer the case.

“Now things are much more sophisticated, so I don’t think the new space will be associated with low quality anymore.”

Now the new space has evolved into a dynamic industry that advances missions at the intersection of quality, cost and time. “That’s what the new space industry is trying to do.”

That kind of spirit was a factor that attracted organizations to set up base here. There are many universities in Scotland offering support for the new space industry and industry incubators, making Scotland a place where new space can develop.

According to ADS Group – the UK’s aviation, security, defense and space industry association – the latest facts and figures show that the Scottish aerospace sector has generated over £4 billion report.

According to them, the Scottish space sector recorded a turnover of £3.1 billion, while the aerospace sector (both in the Earth’s atmosphere and beyond) generated a turnover of £1.1 billion.

In terms of employment, the Scottish aerospace sector directly employed around 4,500 people, while the space sector employed 8,500.

The challenge, according to Jeffrey, is collaboration.

“It’s getting more and more competitive,” she said. “and now I think we need to figure out how we can all work together and how we each get our own piece of the pie.”

What makes the new space dynamic is how much can be done in a short period of time, and Jeffrey says larger organizations can benefit from many of the benefits.

“If we want to continue to grow we need to try and build our relationships with larger organisations, we need to work more closely with the different space clusters in the south because a lot of people don’t know the Scottish space industry exists,” Jeffrey said.

According to Jeffrey, here in Scotland, “we need to remember what can be done to support and grow homegrown business here in Scotland.”

“So it’s more about developing relationships and trying to build our capabilities, but without creating a majority organization that could destabilize the good relationships that we have.”

Part of this is not only about collaboration, but also about stopping local talent from leaving the Scottish space industry for roles elsewhere.

“Scotland tends to focus more on small satellites and new space, and people seem to gravitate towards more traditional space as they gain experience, with most of it being in the south or elsewhere.

“So if we really want to retain people and retain opportunities, we need to continue to expand our opportunities and show all the amazing opportunities Scotland already has.”

Scaling in Scotland

Craft Prospect is a Glasgow-based startup from its conception to the present day. Like many startups in Scotland, it was mainly supported by government grants and a strong influx of local graduates.

“The British Space Agency has lots of grants you can apply for,” she said. “Another really good thing is that collaborating with different universities has become much more financially viable. and for large organizations to work with SMEs“

“For some funding calls, if you are working with an SME or research organisation, the percentage of funding awarded, called matching funding, increases and I think that’s a really cool way to do it,” she continued.

“You get some funding to keep growing, and you still have to invest in it, but then it becomes a lot more valuable financially.

“But you also build relationships with universities, and strengthening those relationships helps develop new technologies and expand your reach a little bit.”

However, like many start-ups in Scotland, when it comes to scaling and moving from research and development to becoming a profitable business, there is less and less support.

“I think when you become a company our size, about 30 people today, and we’re trying to move from doing a lot of R&D to being more commercially sustainable, I don’t think there’s going to be a huge amount of support available to help you get there.”

“I think you will get a lot of support at the beginning, you can get a lot of start-up grants, but after that it’s all up to you.”

“It’s more of a private investment route that you have to follow.”

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Funding for incubators such as: Techscaler, which focus on early-stage startups and novice entrepreneurs, there are plenty, and their main goal is to connect and stimulate entrepreneurship. However, once a company reaches the point where it wants to take the next step, there may be a lack of support.

This is why we see many Scottish companies exiting the market as soon as they become significant in size. This isn’t to say that supporting early stage startups is a bad decision, or that startups in Scotland operate under a certain glass ceiling when it comes to scaling.

Rather, it is a story of business leaders who have reached a point few have reached before and must forge their own path forward.

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