STAR-Dundee benefits from employee ownership
How employee ownership helped a Dundee-based aerospace engineering company preserve its culture and empower the team who create its cutting-edge products.
10 Mar 2020 | 4 minute read
A Dundee engineering business with a galactic reach
STAR-Dundee was created in 2002 to meet growing demand for the spacecraft technology being developed at the University of Dundee. Founded by Professor Steve Parkes and several research students – who worked on its original products in their spare time – the SME currently employs 25 people, with offices in Dundee and Sant Cugat, Barcelona.
Based in a townhouse near the Dundee university campus, the company produces electronic components and test equipment for spacecraft. An example is its ‘SpaceWire’ network technology. This was developed as an efficient and versatile means of linking sensors to a spacecraft’s electronic equipment, in much the same way you connect devices to your laptop through USB.
With a number of international space agencies as customers, including NASA, ESA and JAXA, STAR-Dundee’s products are now carried on hundreds of spacecraft. This means that bits of Scottish tech are currently orbiting the earth, exploring asteroids and distant planets and mapping out the furthest reaches of the galaxy.
Even as it expands into outer space, the company keeps its approach down-to-earth by focusing on what it’s good at – designing electronics and software – and subcontracting production to accredited manufacturers in the UK.
The staff at STAR-Dundee
How employee ownership put the focus on the company’s real stars
After 15 successful years in business, it was time to consider STAR-Dundee’s long-term future. With support from a succession planning initiative run by Scottish Enterprise, Professor Parkes looked at various options. It soon became apparent that employee ownership was the way forward.
“It became clear that the company’s future was about the people who had helped make it a success, and the culture that we had developed to support that success,” Professor Parkes explains. “Selling the company to another organisation, which would inevitably change the culture and might even move it from its Dundee base, was not a very attractive idea.
“Employee ownership retains and strengthens the company culture and will ensure that it always has a base in Dundee.”
What’s more, it meant that the hardworking employees who had poured their skill into the enterprise would be suitably rewarded. In 2017, STAR-Dundee was transformed from a start-up run and majority-owned by its founder, to a company in which 55% of the shares are held by an Employee Ownership Trust (EOT) on behalf of its staff. The remainder are held by Steve Parkes, the University of Dundee and the other founders.
Employee ownership is also beneficial in terms of retaining and recruiting workers. This is particularly important in a business that features many highly technical roles: 40% of STAR-Dundee’s employees hold PhDs, and 90% have the training necessary for technical R&D.
The arm of Scottish Enterprise that supports employee-owned businesses is Co-operative Development Scotland (CDS). Its head, Clare Alexander, added: “STAR-Dundee’s main priorities when considering its succession options were to secure and strengthen the business, both in terms of its culture and success, and also to ensure the business remained rooted in Dundee.
“All of these objectives have been achieved through employee ownership, as well as making sure the staff have a meaningful stake in their company and its future success.”
Listen to our STAR-Dundee podcast episode
Hear CEO Stuart Mills discuss how STAR-Dundee became a staff-owned business in episode 8 of our employee ownership podcast.
A revamped business set to reach for the sky
STAR-Dundee’s management team was also restructured to provide a solid foundation for further growth. Former CEO Steve Parkes became Chief Technology Officer, with a focus on development, and Stuart Mills, another company founder and previously Chief Operating Officer, now serves as CEO. Carole Carrie, the company’s Administration Manager, also took on the role of company secretary.
CEO Stuart Mills says: “STAR-Dundee has been a great success because of its people. Our move to employee ownership allowed these individuals to have a greater say in the running of the company and to further benefit from the company’s success.”
What’s next for this forward-thinking local business? A new technology, SpaceFibre, was launched in 2019 after 10 years of development and is already orbiting the earth. Although it was created for use in spacecraft, the product can also be employed in robotics, medical equipment and other industries where high performance, reliability and availability are essential.
This means that under its new employee-owners, STAR-Dundee’s products may soon be just as widely used on earth as in space – providing an even bigger global stage for this proudly local business.
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