How Scotland can unlock the space sector’s full potential

With the Artemis II mission now having completed its historic journey around the Moon, the space sector is entering a new era of ambition and investment, something reinforced by the strong Scottish presence at this year’s Space Symposium in Colorado.

Globally, the sector is already worth more than $600 billion and is projected to reach $1.8 trillion by 2035.

Closer to home, Scotland’s space sector is also gathering pace. We are already Europe’s largest producer of small satellites and, with launch capabilities on the horizon, we are moving towards a fully integrated, end-to-end space economy.

Katie Aghabala, Scotland Space Lead at KPMG UK (Picture: Mike Wilkinson)

The opportunity is clear but capturing it will depend not just on technological capability, but on how effectively we support and scale these businesses.

A gap in the system

While the sector is growing rapidly, the wider ecosystem needed to support it must keep up. At present, the space economy can be fragmented, particularly when it comes to funding.

For early-stage companies, raising capital can be complex and time-consuming, and for those looking to scale, a lack of tailored financial solutions can stall momentum. With the anticipated SpaceX IPO, the space tech sector could see a surge in liquidity and investor interest, unlocking new funding and accelerating innovation.

The Artemis II crew – from left, Christina Koch, Jeremy Hansen, Victor Glover, and Reid Wiseman – pause for a group photo inside the Orion spacecraft on their way home from the Moon (Picture: NASA via Getty Images)

At the same time, appetite for growth and international expansion is increasing. Our latest Private Enterprise Barometer shows that two-thirds (66 per cent) of Scottish firms report a growing appetite to expand overseas. That ambition is increasingly visible in the space sector, where early-stage businesses are being encouraged to think internationally from the outset.

Initiatives like the UK Space Agency’s Accelerating Investment Export Pathway (AIEP) programme, which we’re supporting, is helping high-potential space SMEs navigate global procurement environments. Programmes like this are an important step forward but they also highlight a wider challenge that backing for space businesses is still delivered in silos, and what is missing is a more joined-up approach.

A chance to lead

This is where Scotland has a real opportunity.

We already bring together a strong and fast-growing space cluster with established financial expertise, world-class universities and increasing international interest.

However, what is now needed is a more connected network of capabilities spanning venture capital, banking, insurance, export finance, legal and advisory services and public sector support, all aligned to the specific needs of space businesses.

Developing this ecosystem will require joined-up action across multiple players. Private investors and venture capital – such as Seraphim, a global leader in space tech investment and a close collaborator with KPMG – will need to support early-stage innovation, while banks and financial institutions will play a critical role in providing growth capital and lending solutions as companies scale. Insurers and risk specialists must help address the unique risk profile of space activities and government and public agencies will be essential in creating funding programmes and regulatory clarity.

We must also continue strengthening the broader ecosystem from talent and skills to infrastructure and international partnerships to ensure Scotland remains an attractive destination for both businesses and investors. That starts with building a strong pipeline of skills, from inspiring interest in space and STEM subjects at school level, through to specialised courses and research in universities and ongoing professional development as the sector evolves.

As the space economy grows, it will also play an increasingly important role in areas such as national security, sustainability and global connectivity. Those countries that can align technological capability with financial and institutional support systems will be best placed to capture long-term value.

Scotland has already proven its ability to lead in areas like satellite manufacturing, so the next step is to ensure we are equally strong in how we coordinate, finance and scale those innovations. If we get that right, Scotland will help shape how the global space economy is funded and developed for decades to come.

Katie Aghabala, Scotland Space Lead at KPMG UK