Deadline Date: December 10, 2025
Innovate UK, under the Made Smarter Innovation (MSI) programme, has announced a new funding competition offering up to £15.5 million to support UK SMEs in developing industrial digital technologies that improve resource and energy efficiency in manufacturing.
The competition aims to explore new industrial digital technologies (IDTs) for manufacturers. The IDTs will improve the sustainability, resilience and productivity of UK micro, small or medium sized enterprise (SME) manufacturers by improving energy or resource efficiency. Projects must focus on the innovation of digital solutions relating to one or more of the resource or energy efficiencies and must be affordable, easy to use, and scalable across SMEs. Specific themes include resource efficiencies such as raw material waste, production process waste, packaging waste including in-process single-use materials, maintenance or servitisation waste including fluids and components, utilities waste, and end of life waste; and energy efficiencies such as boilers and steam, air compressors or vacuum, motors, drivers, pumps or hydraulics, induction or welding, chilling or freezing, spray, extraction or dryers, ovens, kilns or furnaces, and heavy machinery or presses.
Through this competition, Innovate UK seeks to encourage innovative digital solutions that enhance sustainability and operational efficiency across UK manufacturing SMEs. The initiative will support industrial research projects that develop and test innovative digital technologies capable of improving energy and resource usage. The projects should also demonstrate how these solutions can be adopted across different manufacturing sectors, helping SMEs reduce costs, increase productivity, and strengthen resilience.
Eligible projects must have total costs between £200,000 and £1 million and last between six and twelve months, starting on 1 April 2026 and ending by 31 March 2027. To qualify, the lead organisation must be a UK registered SME operating as a technology developer, and the consortium must include at least two UK registered SME manufacturers claiming grant funding. Additional participants may include academic institutions, research organisations, or research and technology organisations.
Successful projects are expected to deliver outputs that develop and test innovative digital solutions, increase understanding of challenges faced by SME manufacturers, and validate adoption-ready proposals. Each funded project must also compile a case study outlining its digital solution, project results, and the qualitative and quantitative benefits achieved. Where possible, projects should provide open access to their digital solution setup as a demonstrator.
Funding will be provided in the form of grants, with micro and small organisations eligible for up to 70% of eligible project costs, and medium-sized organisations eligible for up to 60%. Research organisations undertaking non-economic activity can share up to 30% of total eligible project costs, with up to 100% funding for RTOs or research organisations and up to 80% of full economic costs for Je-S registered institutions.
Innovate UK will apply a portfolio approach in funding decisions to ensure a diverse range of projects across different technologies, sectors, sizes, and locations. The initiative seeks to stimulate scalable and high-impact digital solutions that will contribute to a more sustainable and efficient manufacturing sector in the UK.
For more information, visit GOV.UK.
