Historically much of the UK’s space industry has been concentrated in London, the South East and a few other established hubs, but the North East is gradually developing a distinct identity in satellite technology, space applications, advanced manufacturing and research.
Recent public data and industry sector reports highlight this shift. According to one regional analysis, the number of space agencies in the region has increased from 34 to 51. This has increased by nearly 50% over the years, reflecting increased business formation and inward investment.
Employment in the local space sector also increased, increasing by about 12% to more than 1,000 people. In value terms, the sector once brought in around £88 million in income to the region.
Recent summaries suggest even stronger growth. Estimates for 2024-2025 will see the number of organizations increase to around 80, employing more than 1,340 people and increasing local income to around £171m.
These numbers show that the cluster is not only surviving, but thriving and expanding. However, numbers alone cannot capture the whole picture.
The recent surge in the North East represents a strategic effort to build capacity in manufacturing, research, training and satellite applications, in line with wider trends in space technology in the UK and globally.
Institutional Anchors and Strategic Investment: The Birth of NESST
A major milestone in the region’s space aspirations is the development of a major new research and skills hub, the North East Center for Space Skills and Technology (NESST), based at Northumbria University in Newcastle.
With a total investment of £50 million, jointly funded by the University itself, the UK Space Agency and UK Lockheed Martin, NESST aims to become a center of excellence of national importance for space research, training and industry collaboration.
NESST is expected to open around 2026 and its establishment reflects a strategic decision to anchor the region’s growing industry with world-class infrastructure capable of supporting research, manufacturing and satellite readiness.
The center is expected to directly create more than 350 jobs and deliver hundreds of millions of economic value to the North East in the long term. But NESST is more than just a facility, it’s also a signal. This shows that advanced space research and development can thrive outside of traditional hubs.
Planned work for NESST spans optical satellite communications, space weather research, space-based energy concepts, and more. Its goal is to leverage academic excellence and industry collaboration to position the Northeast as a key player in the global space economy.
Furthermore, past collaborations between Northumbria University and Lockheed Martin have already produced innovative research, from machine learning to detect nanojets (tiny plasma jets in space) to advancing the concept of solar power generation from space.
The emergence of NESST will help answer important questions for space-oriented regions: how to build and maintain high-value, highly skilled capabilities. With the right infrastructure, training and partnerships, the North East of England is now laying the foundations for long-term growth, inward investment and talent retention.
Diverse functions
One of the strengths of the North East cluster is its diversity. Rather than focusing on a single niche, the region supports a wide range of space-related capabilities, from hardware manufacturing and assembly to digital services, data analytics, and satellite applications.
Local companies include those working in satellite communications, Earth observation data services, geospatial analysis, and parts manufacturing. We also have strengths in complementary areas such as AI, big data, cybersecurity, immersive technology, and 5G/communications infrastructure.
This extensive industrial ecosystem is a competitive advantage, allowing space companies to take advantage of local talent pools and technology synergies.
Additionally, the region’s manufacturing capabilities include clean rooms, component assembly facilities, and support for Tier-3 and Tier-4 satellite manufacturing.
There is also capability for Tier-2 subsystem work, and even the potential for component assembly for launch vehicles.
This breadth means the Northeast can serve a variety of market segments, including small satellite manufacturers, data service providers, manufacturing subcontractors, and system integrators, providing flexibility and resilience as the space market evolves.
Strategic advantages: location, cost, talent base, connectivity
What makes the Northeast particularly attractive for space growth goes beyond the immediate clusters of geography, infrastructure, cost base, and talent.
From a logistics perspective, the region is well positioned. Its proximity to the North Sea provides potential advantages for cooperation with sea or offshore launch/testing initiatives. On the other hand, transportation infrastructure such as ports, roads, railways, and connections make it accessible and functional for businesses.
In terms of costs, the North East remains competitive compared to traditional South East and London-based clusters. Lower facility rents, a more affordable workforce, and modest operating costs all help make the region attractive to start-ups, small businesses, and large corporations alike.
This is supported by a skilled workforce supported by strong academic institutions. The region is home to several universities with expertise in engineering, computer science, data, sensors, materials science, and space-related research. This creates a talent pipeline that is essential to sustaining long-term growth and innovation.
These factors combine to give the Northeast a competitive position. That means an environment where businesses can grow, scale, and innovate without the overhead associated with more expensive regions.
Ambitious vision: goals for 2030 and beyond
Recognizing the potential, regional stakeholders have set bold goals. At the heart of this regional strategy is an ambition to grow space sector employment in the North East to 10,000 people by 2030, a significant increase from the current baseline.
This goal is based on three main pillars: developing talent, building infrastructure, and attracting investment. If successful, the North East could become one of the largest space workforce regions outside of London and a key node in the UK’s wider space programme.
This long-term vision is not just about economic growth. It is about transforming the region’s industrial identity, from traditional industries to high-tech manufacturing, research, satellite data services and global market integration.
Challenges and what is needed for long-term success
Despite strong growth and ambition, the path forward is not guaranteed. Several challenges remain if the North East is to realize its vision of becoming the UK’s major space hub.
First, scaling up manufacturing capacity to support a complete satellite or launch readiness remains a challenge. Although the region has proven Tier 3 and Tier 4 manufacturing capabilities, stepping up to complete subsystem or launch-ready production will require investment, supply chain development, and possibly additional incentives.
Secondly, global competition from other parts of the UK and international clusters is intense. More established space hubs elsewhere are likely to continue attracting projects, talent and funding. For the North East to stand out, it needs to deliver consistent results, build a reputation and foster innovation that leads to commercial and technological success.
Third, it is important to maintain long-term investment and commitment. Building an infrastructure like NESST is a big step, but it requires continued support, demand for services, and coordination with national and international space programs to keep it operational, fully utilized, and integrated with industry demands.
Fourth, as space becomes increasingly data and software-driven, the region must continue to strengthen its digital ecosystem and ensure that software engineers, data scientists, and satellite operations professionals can participate in the growth.
Finally, the supply and retention of skills is important. While developing a new generation of space-qualified workers is critical, it is equally important to keep talent local rather than losing it to more established hubs.
Why it matters – not just for the North East but for the UK space industry
The rise of the space sector in the North East of England is more than just a regional success story. This represents a shift in how the UK space industry will be structured in the future, becoming less London-centric and more decentralized, encompassing regions with strong manufacturing, research and cost competitiveness.
For the UK as a whole, developing multiple vibrant regional clusters reduces geographical concentration risks, spreads economic benefits and builds resilience. For example, a diversified industrial base can better absorb market fluctuations, disruptions to global supply chains, or policy changes.
Additionally, by leveraging a region with a strong tradition in engineering, manufacturing and digital technology, we can bridge traditional sectors and high-tech space ambitions, creating a hybrid strength that combines manufacturing tradition with cutting-edge research.
For investors and businesses around the world, clusters that grow and are well-supported outside the traditional Southeast Triangle offer new opportunities. This opens the door to further innovation, cost savings, alternative talent pools, and access to space-enabled manufacturing and services without incurring high operating expenses.
This means that if the North East Space Cluster realizes its ambitions, it could make a significant contribution to the UK’s national space capabilities, while distributing industrial growth more evenly across the country.
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