Funding competition

MDI Programme Innovation and Scale-up Hub

UK registered eligible organisations can apply for a share of up to £4 million for a Manufacturing Digitalisation Innovation and Scale-up Hub to improve the targeting, quality and commercial impact of grant funded activity.

Competition opens: Friday 2 October 2026 Competition closes: Wednesday 18 November 2026 11:00am

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Competition sections

Summary
Eligibility
Scope
Dates
How to apply
Supporting information

Description

Innovate UK, part of UK Research and Innovation (UKRI), will invest up to £4 million from the UKRI Manufacturing Digitalisation Innovation (MDI) programme. This is subject to a sufficient number of high quality applications being received.

The aim of this competition is to establish an Innovation and Scale-Up Hub that will improve the targeting, quality and commercial impact of grant funded activity delivered through the MDI programme.

The Hub will identify and prioritise common industrial challenges affecting the following Frontier 5 manufacturing sectors:

Advanced Materials
Aerospace
Automotive
Batteries
Space

Your proposal must deliver a hub that will work with manufacturers that are representative of relevant Advanced Manufacturing Frontier 5 market sectors. The hub must also work with high potential technology providers that have the capability and commercial ambition to develop widely adoptable industrial digital technology stack solutions.

In applying to this competition, you are entering into a competitive process. This competition has a funding limit, so we may not be able to fund all the proposed projects. It may be the case that your project scores highly but we are still unable to fund it.

Our experience from similar competitions suggests that you could have 30% chance of success.

We consider a range of factors when determining whether to provide funding to applicants. This includes an assessment of prior conduct, such as any outstanding payments owed to Innovate UK or UKRI. Such factors may influence the funding decision, potentially resulting in a refusal of funding or an award subject to additional scrutiny.

We also reserve the right to adjust funding allocations for any of our competitions. This may be in response to changes in policy, portfolio funding considerations or broader government funding decisions.

This competition closes at 11am UK time on the deadline stated in this Innovate UK competition brief. We cannot guarantee other government or third party sites will always show the correct competition information.

Funding type

Grant

Project size

Your project’s total eligible grant funding request must be between £3.8 million and £4 million.

Accessibility and Inclusion

We welcome and encourage applications from people of all backgrounds and are committed to making our application process accessible to everyone. This includes making reasonable adjustments for people who have a disability or a long-term condition and face barriers applying to us.

You can contact us at any time to ask for guidance.

We recommend you contact us at least 15 working days before this competition’s closing date to allow us to put the most suitable support in place. The support we can provide may be limited if you contact us close to the competition deadline.

You can contact Innovate UK by email or call 0300 321 4357. Our phone lines are open from 9am to 12pm and 2pm to 5pm UK time, Monday to Friday (excluding bank holidays).

Who can apply

Your project

Your project must:

have a grant funding request of between £3.8 million and £4 million
last 36 months
start on 1 April 2027
end on 31 March 2030

Any organisation receiving funding must carry out its project work in the UK, intend to exploit the results in the UK, and spend most of the funding within the UK.

Projects must always start on the first of the month, even if this is a non-working day. You must not start your project until your Grant Funding Agreement has been approved by Innovate UK. Any delays within Project Setup may mean we need to delay your project start date.

You must only include eligible project costs in your application. See our overview of eligible project costs.

If your project’s grant funding request or duration falls outside of our eligibility criteria, you must provide justification by email to support@iuk.ukri.org at least 10 working days before the competition closes. We will then decide whether to approve your request.

If your project does not meet our criteria and you have not requested justification approval, your application will be made ineligible and it will not be sent for assessment.

Lead organisation

To lead a collaborative project, or work alone, your organisation must be a UK registered research and technology organisation (RTO) or academic institution.

More information on the different types of organisation can be found in our Funding rules.

Project team

To collaborate with the lead, your organisation must be one of the following UK registered:

business of any size
academic institution
charity
not for profit
public sector organisation
research and technology organisation (RTO)

Each partner organisation must be invited into the Innovation Funding Service (IFS) by the lead to collaborate on a project. Once partners have accepted the invitation, they will be asked to login or to create an account in the IFS. They are responsible for entering their own project costs and completing their Project Impact questions in the application.

To be an eligible collaboration:

the lead and at least one other organisation must request funding
you must explain why you’re collaborating and how the collaboration will work
no single organisation can claim more than 70% of the total project costs

Non-funded partners

Your project can include organisations who do not claim any funding for their work on the project. Their costs will be covered from their own resources. These can include UK, EU and other non-UK organisations. Non-UK partners are permitted to carry out project work from within their home countries and exploit the results outside the UK.

Where non-funded partners have been invited to the application on IFS, their costs will count towards the total eligible project costs.

Subcontractors

Subcontractors are allowed in this competition.

Subcontractors can be from anywhere in the UK and you must select them through your usual procurement process.

You can use subcontractors from overseas but must make the case in your application as to why you cannot use subcontractors from the UK.

You must provide a detailed rationale, evidence of the potential UK contractors you approached and the reasons why they were unable to work with you. We will not accept a cheaper cost as a sufficient reason to use an overseas subcontractor.

All subcontractor costs must be justified and appropriate to the total project costs.

Number of applications

An eligible organisation can only lead on one application. Any further applications by the same organisation as lead will be made ineligible.

An eligible organisation that is not leading can collaborate in a one further application.

Sanctions

This competition will not fund you, or provide any financial benefit to any individual or entities directly or indirectly involved with you, which would expose Innovate UK or any direct or indirect beneficiary of funding from Innovate UK to UK Sanctions. For example, through any procurement, commercial, business development or supply chain activity with any entity as lead, partner or subcontractor related to these countries, administrations and terrorist groups.

Use of animals in research and innovation

Innovate UK expects and supports the provision and safeguarding of welfare standards for animals used in research and innovation, according to best practice and up to date guidance.

Applicants must ensure that all of the proposed work within projects, both in the UK and internationally, will comply with the UKRI guidance on the use of animals in research and innovation.

Any projects selected for funding which involve animals will be asked to provide additional information on welfare and ethical considerations, as well as compliance with any relevant legislation as part of the project start-up process. This information will be reviewed before an award is made.

Previous applications

You can use a previously submitted application to apply for this competition.

If you have previously submitted an application that reached our assessment stage, you can re-apply once more with the same proposal.

If there are minor differences to the proposal, but it is judged by us to be ‘not materially different’, the same rule applies.

We will not award you funding if you have:

failed to exploit a previously funded project
an overdue independent accountant’s report
failed to comply with grant terms and conditions

Innovate UK may withhold a grant payment at any time if you have any outstanding sums due to us in relation to other projects.

Subsidy control (and State aid where applicable)

This competition provides funding in line with the Subsidy Control Act 2022. Further information about the Subsidy requirements can be found within the Subsidy Control Act 2022.

Innovate UK is unable to award organisations that are considered to be in financial difficulty. We will conduct financial viability and eligibility tests to confirm this is not the case following the application stage.

EU State aid rules now only apply in limited circumstances. See the Windsor Framework to check if these rules apply to your organisation.

In the ‘Project details’ section of your application you will be asked questions to indicate if State Aid or Subsidy applies to your organisation.

The successful applicant may provide non-financial, secondary funding as gross cash equivalent (the calculated value of the support provided) for the costs of the programme to end beneficiaries. Any secondary funding must be provided free of charge and may only be awarded to enterprises under Minimal Financial Assistance (MFA) or the EU De Minimis Regulation, up to a maximum value of £200k gross cash equivalent per beneficiary.

It will be the responsibility of the lead organisation to ensure that all secondary funding awards remain compliant with the subsidy control basis under which they are awarded and notify Innovate UK of any awards which will require mandatory reporting. Lead organisations must establish and maintain appropriate processes, records and assurance mechanisms to demonstrate compliance.

If successful, you will be required to complete documentation outlining how you will comply with the process.

Further Information

If you are unsure about your obligations under the Subsidy Control Act 2022 or the State aid rules, you should take independent legal advice. We are unable to advise on individual eligibility or legal obligations.

You must not do anything which could cause a breach of Subsidy Control legislation applicable in the United Kingdom.

This aims to regulate any advantage granted by a public sector body which threatens to, or distorts competition in the United Kingdom or any other country or countries.

This award is classified as a Subsidy which does not form part of your Minimal Financial Assistance or de minimis allowance.

Funding

Up to £4 million has been allocated to fund innovation projects in this competition. This is subject to us receiving sufficient number of high quality applications. Funding will be in the form of a grant. In addition, the overall maximum value of the grant may be increased over the life of the project where additional programme budget becomes available.

We reserve the right to adjust funding allocations for any of our competitions under exceptional circumstances, for example, in response to changes in policy, portfolio funding considerations, or broader government funding decisions.

If your organisation’s work on the project is commercial or economic, your funding request must not exceed the limits below. These limits apply even if your organisation normally acts non-economically but for the purpose of this project will be undertaking commercial or economic activity.

The balance between your total eligible project costs and the amount of grant awarded must be funded by the organisation receiving the grant.

For industrial research projects, you can get funding for your eligible project costs of:

up to 70% if you are a micro or small organisation
up to 60% if you are a medium sized organisation
up to 50% if you are a large organisation

For more information on company sizes, refer to the company accounts guidance.

If you are applying for an award funded under State aid Regulations, the definitions are set out in the European Commission Recommendation of 6 May 2003.

Innovate UK may revoke our decision to provide funding without notice if government commitment for this initiative is withdrawn.

Research participation

The research organisations undertaking non-economic activity as part of the project can share up to 100% of the total eligible project costs. If your consortium contains more than one research organisation undertaking non-economic activity, this maximum is shared between them. Of that 100% you can get funding for your eligible project costs of up to:

100% of your eligible project costs if you are an RTO, charity, not for profit organisation, public sector organisation or research organisation
80% of full economic costs (FEC) if you are an academic institution

Eligibility criteria for claiming 80% of FEC funding

Research organisations must use the Transparent Approach to Costing (TRAC) method as the Je-S form has now been decommissioned.
We pay 100% of the 80% Full Economic Cost (FEC). On IFS only enter the 80% being claimed.

To find out more see our: Cost Guidance for Academics.

Your proposal

The aim of this competition is to establish an Innovation and Scale-Up Hub that will improve the targeting, quality and commercial impact of grant funded activity delivered through the UKRI Manufacturing Digitalisation Innovation (MDI) programme.

This hub is part of a planned £35 million investment by UKRI in a Manufacturing Digitalisation Innovation programme which builds on previous investment of £175 million.

The Hub will identify and prioritise common industrial challenges affecting the following Advanced Manufacturing Frontier 5 manufacturing sectors:

Advanced Materials
Aerospace
Automotive
Batteries
Space

The purpose of the Hub is to:

define and focus, through market segmentation, the development and application of Industrial Digital Technology (IDT) development that will drive growth within manufacturing supply chains and in-factory production
accelerate the scale-up of supply-side high-potential technology providers offering compellingly adoptable IDT solutions
create an environment that will support demand-side advanced manufacturing business across the Frontier 5 sectors
optimise the technical and commercial outcomes for recent and future grant funded activities in this space
improve Resource Efficiency and Energy Efficiency (REEE) strengthening sustainability, resilience and productivity

The Hub must support the development of a balanced portfolio of opportunities across Frontier 5 sectors.

The portfolio should prioritise challenges and technology providers with the strongest potential to:

deliver UK business growth
address needs shared by of the greatest number of manufacturers
create widely adoptable industrial digital technology stack solutions
generate private co-investment and follow-on investment
improve manufacturing productivity and resilience and deliver resource and energy efficiency benefits
create routes into additional UK and international markets
meet the security, trustworthiness and explainability requirements of regulated manufacturing environments

Your project

The Hub must define common industrial challenges experienced by manufacturers and not start with predetermined technologies or solutions in a challenge-led and technology-neutral approach.

Objectives

Your project must deliver on the following objectives:

Identify and prioritise cross-cutting industrial challenges for Industrial Strategy Frontier 5 sectors through market segmentation.
Convene representative manufacturers and technology providers that are best placed to address the segment challenges using Industrial Digital Technologies.
Assist businesses with formulating the most impactful target problems and the approach to developing a grant funded solution with maximum scale-up potential.
Support the development of compellingly adoptable industrial digital technology-stack solutions.
Improve technology-provider scale-up readiness and growth.
Strengthen adoption and diffusion pathways.
Generate evidence for programme management reporting and future investment decisions.

Outputs

Your key project outputs must include:

Defining the cross-cutting industry challenges for Frontier 5 market in a segmentation report including technical specification for grant funding interventions requiring Industrial Digital Technology innovation.
Segmented cohorts of high potential manufacturers and technology providers identified and introduced.
Pipeline of high-potential grant funding applications.
Evidence of expertise provision to advise, test, signpost and influence to maximise project impact of both recent and live projects.
Evidence of expertise provision in commercial readiness in preparation for scale-up of both recent and live participants.
A summary of validated technologies for publication and dissemination including delivering training to relevant UK adoption pathways.
Evidence based outputs, outcomes, benefits and impacts across the portfolio, together with critical evaluation and evidence supported recommendations for future intervention approach.

Logic model Objectives, Activities & Outputs

Hub objective 1 is to identify and prioritise cross-cutting industrial challenges for Industrial Strategy Frontier 5 sectors.

Activities that address the objective must :

include segment Frontier 5 sectors through the lens of common industrial challenges
assess the scale and significance of these challenges across sectors and supply chains
identify challenges shared by multiple manufacturers and estimate the addressable market associated with each challenge
prioritise challenges according to UK growth potential, industrial impact, Resource Efficiency and Energy Efficiency (REEE) strengthening sustainability, resilience and productivity benefits and suitability for CR&D grant funded intervention
ensure technical specification define the industrial challenge and required outcomes without prescribing a particular named technology solution