The Aerospace Technology Institute (ATI) has highlighted the growing economic and industrial impact of UK aerospace R&D, with £313m of joint government-industry investment committed through its programme during 2025/26.
The latest ATI Impact Report says investment in aerospace technology is delivering benefits beyond the sector itself, with analysis from Fathom Consulting indicating that around 70% of the long-term benefits of ATI Programme investments come through productivity gains across the wider economy. The analysis also suggests that every £1 invested in aerospace R&D could generate up to £14 in whole-economy output over time, reinforcing the role of research and development in driving productivity and economic growth.
Since 2014, more than £4.2bn of joint government and industry investment has been committed through the ATI Programme to develop new technologies, industrial capabilities and supply chains. The latest report covers activity between October 2024 and March 2026, with programme data for the financial year 2025/26.
Focus shifts towards next-generation aircraft
Of the £313m invested through the programme in 2025/26, £177.3m came from government grants. Investment was spread across the UK and included 38 SMEs as project leads or consortium members. The largest share – £217.6m, or 69% of total investment – was directed towards ultra-efficient technologies. ATI said this reflects the ramp-up of activity ahead of the anticipated launch of the next-generation single-aisle aircraft programme towards the end of the decade. A further £55.2m was invested in cross-cutting technologies, £27m in zero-carbon technologies and £13.2m through the newly introduced Non-CO₂ technology roadmap.
The programme’s SME-focused activity provided £22.4m of investment during the year, including £15.6m in government grant funding. Projects included automated sub-assembly technology from True Robotics, energy-efficient superplastic forming equipment from Aerospace Cutting Tool, additive manufacturing inspection technology from Theta Technologies and AI-enabled automated weld inspection from Baclor.
The report also points to a number of technology milestones supported by ATI investment during the year, including Vertical Aerospace’s VX4 airport-to-airport flight, Safran’s ENGINeUS certification and the progression of Airbus’ Wing of Tomorrow industrial assembly technologies and high-aspect-ratio wing testing.
Funding designed to unlock private investment
The ATI says its support is also helping companies move technologies from research towards commercialisation while attracting additional private capital.
Around 30% of SMEs that received ATI Programme funding subsequently raised more than £65m in equity capital, according to the report. The organisation argues that public funding can reduce the risk faced by private investors by helping businesses reach key technology milestones. Jack Nicholas, CTO and co-founder of Qdot Technology, said government support can make companies more attractive to investors by reducing the amount of private capital required to reach those milestones. The report cites the example of a company being able to approach investors seeking £2m after already securing £2m in government grant funding.
ATI also highlights the role it plays in bringing companies together to develop new partnerships and strengthen UK supply chains. Examples include partnerships between Dowty and Ultima Forma, and Vertical Aerospace and Evolito.
Aerospace growth ambition
The findings come as the UK aerospace industry works towards an ambition agreed by government and industry in 2024 to double the value of the UK aerospace market to US$18bn by 2035 and quadruple it by 2050. According to the report, the value of the UK aerospace sector has already increased by US$1bn since 2024, putting it on track to meet the 2035 target. The ATI’s latest 10-year funding settlement provides up to £2.3bn through to 2035.
The institute said aerospace R&D is particularly important to achieving both the industry’s growth ambitions and its decarbonisation goals. Aircraft entering service today are up to 30% more efficient than the aircraft they replace, while next-generation aircraft are targeting a further 30% improvement. The economic benefits are also being felt beyond aerospace, with ATI pointing to technology spillovers into sectors including defence, energy, automotive and healthcare.
The organisation’s three strategic objectives for the coming decade are to strengthen UK competitiveness, increase UK content on next-generation platforms, and reduce environmental impact through innovation. Those objectives underpin Engineering Growth, the UK’s national aerospace technology strategy launched in May 2026, which sets out investment priorities intended to accelerate technology and industrial readiness for future aircraft programmes.
ATI said it will now develop measures to track progress against the goal of doubling the UK’s aerospace market value by 2035, while working with government and industry to prioritise investments capable of delivering the greatest returns for the UK economy.
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