LONDON — After Britain upped its European Space Agency (ESA) contribution by 25 percent, the United Kingdom’s growing space industry started drawing up a revitalized economic development strategy to be published later this year, but business is divided as to whether the U.K.’s space future is in technology or services.

“From the U.K.’s point of view we need to have a healthy upstream because that allows us to create new business opportunities for the downstream,” Sir Martin Sweeting, founder and chief executive of Surrey Satellite Technology, told SpaceNews. Sweeting’s view is that the so-called downstream space-based service providers will benefit from new technologies created by upstream technology developers like Surrey.

Sanjay Razdan is managing director for space and intellectual property for another small-satellite maker, Qinetiq. He has a very specific recommendation, telling SpaceNews, “We can create a center for ion engines. We are working on programs to commercialize the engines for navigation and telecoms market.” Ion engines can lengthen the life spans of satellites because they are so fuel efficient.

However, not everyone shares this technology-first viewpoint. 

“Targeted government incentives and light regulation for the market would be a great outcome,” said Ruy Pinto, chief technology officer for London-based mobile satellite services provider Inmarsat. Pinto is also the chairman for the trade association UKspace, which has been busy revising its 2010 Innovation and Growth Strategy (IGS). Highlights of the new report will be unveiled at the U.K. national space conference July 16-17 in Glasgow, Scotland, with the full report published later this year.

The original IGS report, which led to Britain increasing its ESA contribution by 25 percent, also set goals for the next 20 years, including 100,000 new jobs by 2030. 

According to UKspace, 80 percent of those 100,000 jobs will come from the downstream companies such as Inmarsat and Avanti Communications, a London-based provider of Ka-band satellite broadband services throughout Europe, the Middle East and parts of Africa. The job targets are based on data from the space industry’s last 10 years, according to Richard Peckham, a spokesman for UKspace and EADS Astrium U.K. business development director. “Back in 2010 we targeted these 100,000 extra jobs by 2030,” he said. “Most of those jobs will be coming from the downstream.”

U.K. Space Agency Chief Executive David Parker agrees. “We have this view that most financial returns come from applications and services, on the back of the technology,” he said in an interview.

However, Sweeting feels the emphasis should be a little further upstream. “One of the messages we need to convey in the update of the IGS strategy is, yes, the downstream is where the future profits come from, but we’ll only have those profits if we have an upstream.” Surrey Satellite Chief Executive Officer Matt Perkins will succeed Pinto as UKspace chairman next year.

The U.K. Space Agency has already increased its technology spending from the 10 million British pounds ($15.2 million) it spent from 2010 to 2012 to 25 million pounds for 2013 to 2015. “We are interested in expanding the breadth of equipment, subsystems that are made in the U.K.,” Parker said. But even this increased spending is a fraction of the 100 million-pound technology program industry stated it wanted in its 2010 IGS.

Peckham is sanguine about what funding can be justified. “Anything you do at all has to be very firmly about economic growth. You have to show it wins the argument of the business plan,” he said.

Pinto sees one option as a “national technology program that works with initiatives like Catapult,” a reference to the Satellite Application Catapult Centre, which is based in Harwell, Oxfordshire, and funded by the U.K. government’s Technology Strategy Board. Opened May 13 by the Duke of York, Prince Andrew, the Catapult center is for the development and commercial exploitation of space and satellite-based products, services and applications. “The emphasis we advocate is prioritizing the Catapult and light-touch regulation for satellite applications,” Pinto said.

U.K. space officials interviewed by SpaceNews were in broad agreement they do not want to see simply another increase in Britain’s ESA contribution. The 25 percent increase Britain pledged in November means the country will spend 1.2 billion pounds from 2013 to 2018 with the European agency. However, while an increased ESA contribution will ensure Astrium, and possibly Surrey, are prime contractors for some programs and missions, the U.K. supply chain still has to compete with other country’s firms; there is no guarantee any one company will win a particular contract.

“Some people in industry think we may have the balance slightly wrong in the U.K. because we put a huge amount into ESA and don’t really balance that with a very significant national program,” said Philip Davies, a spokesman for the Royal Aeronautical Society’s space group and a sales manager at Surrey. The foreign companies have large national programs helping them develop technologies and services and so U.K. industry wants national funding increases so it gets the same help developing technologies and services.

In the meantime, Pinto and Peckham are looking toward a refreshed strategy that includes lighter-touch regulation for space applications, launch insurance help, marketing support for space-based services, increased technology development and more export credit guarantees. “We want to keep coming up with fresh ideas for growth,” Peckham said.