In November 2024, UK prime minister Keir Starmer announced a £975 million funding commitment to the Aerospace Technology Institute Programme over five years, signalling a renewed government focus on innovation, regional growth, and economic security. That message was reinforced in April 2025 with a broader £13.9 billion R&D package spanning aerospace, AI, and advanced manufacturing. Together, these moves underline the government’s view of aerospace as a strategic growth sector, not just for exports, but for national resilience and global competitiveness.
Once seen as too capital-intensive and risk-heavy for many investors, the sector is now at the forefront of deep tech progress, backed by soaring government budgets, dual-use defence urgency, and the rapid maturing of technologies like AI, advanced materials, and quantum computing.
“The two drivers for the industry as a whole are defence and space,” says Wil Benton, venture partner at Aerospace Xelerated, a global accelerator backed by Boeing, Rolls-Royce, and others. “Defence is where most of the budget is, and space is obviously the new cool thing.”
But what does this really mean for start-ups, innovators working within university labs and the larger corporations already established within these industries? As geopolitical pressures mount and the post-war mindset gives way to a more prepared footing, governments are pushing hard on innovation. And Benton, who is based in Vienna, sees a shift. “Europe is now starting to recognise we can’t just be living in a comfortable post-war situation,” he says. “We’ve got to be prepping for a pre-war situation.”
It certainly looks as though this thinking is fuelling a rise in innovation and in particular, dual-use start-ups – those building tech with both civil and defence applications in mind. Overcoming preconceptions has been part of this process.
“Six years ago, start-ups wouldn’t come out and say they were building defence companies,” says Benton. “Now we’re seeing companies identify as dual-use or defence-focused. It’s more palatable.”
Geopolitics has certainly had a lot to do with that, but even then it’s been something of a culture leap. That said, the growing convergence of technologies, such as AI, robotics and telecoms, is shaping these industries more than ever, which could help recruitment, certainly in terms of attracting younger talent.
This shift from cultural hesitation to strategic alignment is now being formalised through structured support programmes that help start-ups navigate aerospace’s complex regulatory and supply chain environments.
Start-ups that make it into Aerospace Xelerated’s programme undergo rigorous onboarding, including becoming Boeing suppliers before the programme even begins. “Becoming a supplier can be a one-to-five-year process. It’s very slow and expensive,” says Benton. “We do the heavy lifting so corporates and start-ups can just focus on working together.”
