How trusted markets can drive UK aviation innovation

The future of aviation will be shaped not only by technological breakthroughs, but by the markets that enable them to scale. Eliot Whittington, CISL’s Chief Systems Change Officer and Dr Qi Song, The King's Global Sustainability Fellow in Climate Risk in Aviation, argue that the UK's unique strengths in aviation, regulation and standards could position it as a global leader in zero-emission flight.

This is a defining moment for the future of aviation. The change in the sector is apparent – with the effect of increased defence spending, the rise of autonomous drones and the growing presence of new propulsion technologies such as electric, hybrid and hydrogen. Innovation has always been a hallmark of industry events like the recent Farnborough airshow, but today, we are witnessing innovation spread across the whole ecosystem, opening up new possibilities for the sector.  

A key part of this is the developing global policy competition for over who and where future industrial capacity and leadership edge will sit. This is a competition among not only incumbent leaders but also rapidly emerging challengers. In an effort to secure future industrial leadership, the European Union has been remaking its Aviation and Aeronautics Strategy, while China, as an increasingly visible challenger, has prioritised both Aviation & Aerospace and the Low-Altitude Economy as top industrial policy priorities for their coming Five-Year Plan period.  

The UK response to this is fundamental. There is an opportunity to accelerate innovation in the aviation sector to secure UK industrial leadership in this race by leveraging existing technological strengths in the sector, like the University of Cambridge’s new Whittle Laboratory. This is an opportunity not just for industrial competitive edge but also international climate leadership through focusing innovation on the development of zero-emission aviation solutions. 

The question is how to deliver innovation at speed and scale in a sector that is highly complex, safety-critical and risk-sensitive and how to secure and capture new industrial capacity given the UK’s relatively poor track record at scaling innovation. Part of the answer to this challenge lies in addressing the elephant in the room: the market.

The market as the path to scale 

The market is not only where innovation is adopted, it is the fertile ground where innovation can be developed, stimulated and upscaled. The direction, source, and pace of aviation innovation is embedded in evolving market conditions, and many significant innovations in the historical development of commercial aircrafts were actually driven by demand-side dynamics induced by government – from the introduction of the early-stage airmail regulatory framework in the United States, which induced Boeing’s serial designs in the twentieth century, to the birth of Airbus with solid advance market commitments backed by European governments under the so-called “Airbus Model”.  

Market demand interacts with other relevant system drivers in an era of disruption: For manufacturers, weak market signals slow down the pace of translating technological excellence into commercial innovation. For investors without well-developed real world business cases it is harder to mobilise financial resources to address the funding gap in this capital-intensive sector. For regulators, the safety-critical nature of aviation means that sufficient real-world operational data is essential to provide evidence to support certification and standardisation. For infrastructure providers, the “chicken and egg” problem creates challenges as high planning uncertainty, significant costs and operational complexity make it difficult to commit to new infrastructure projects without sufficient demand signals. 

So, the question becomes: can the UK build a market that accelerates and upscales innovation, offering good soil to grow new seeds?

The UK’s credibility advantage 

The answer is very likely yes. Globally speaking, with the third-largest aviation network in the world, the UK has always been a key player in the global aviation ecosystem. It has a number of assets from the broader domestic infrastructure from ground to air, to world-leading airports as well as the ambitious airspace modernisation programme. 

The commitment for UK domestic flights to reach net zero by 2040 provides innovators with opportunities to interact with business realities and future constraints, an essential characteristic of a testbed for innovation.  

Specific opportunities such as regional routes, ‘highlands and islands’ air services, public service obligation (PSO) routes, and universal service obligations (USO) such as mail services offers a unique fit for testing, demonstrating, and deploying new aviation innovation solutions. In addition, the UK’s significant private jet population, ranking sixth globally, also offers opportunities for the early adoption of new aircraft technologies, where relatively small aircraft are involved. This also fits with the current government’s priority on regional connectivity, which matters for local communities, economic development, and wider societal benefits. 

The UK has market assets in stimulating and scaling up innovation through early adopter segments for transformative zero-emission aviation innovations. These are small enough to run, but big enough to offer scalable learning; they provide both visible evidence for markets, capital, and policymakers, and transferrable examples, thereby inducing the cumulative loops of knowledge, technological, operational, and policy learning, which are critical for accelerating systems innovation at the scale.   

Most importantly, the UK market has the potential to not only act as a “testbed”, but also to shape the future global design of zero-emission aviation innovation over the long term by positioning itself as a “trust-bed. This is a place where innovations once proven can be seen as credible and deployable in other markets. Through global trust in the regulatory competence of aircraft certification led by the UK CAA to the broader ecosystem of standards development around the BSI, the UK is leading standardisation development across different areas.  

This benefits the UK: the place that makes the rules often captures more value in the future. The UK market has the elements needed to attract global innovators to come to the UK and collaborate with British regulators, not only to sell into the market but also to participate in developing future rules. This offers a key policy advantage that deserves more attention: a trusted testbed. 

This then, is the opportunity. There is an accelerating industrial competition for the next phase of aviation innovation. If the UK wants to retain its leadership role in this sector it needs to lean in to that – which it can do, it has considerable advantages. But the advantages that are less well identified are the most exciting – the ability to not just drive innovation but scale it, by looking not just at how innovations scale, but how markets can transform. 

Read more about the work CISL is doing to shape the markets of the future 

Find out more about CISL’s work in aviation