Advanced manufacturing will be the key focus for the new U.K. Aerospace Technology Institute (ATI), which expects to guide more than £2 billion ($3 billion) in government and industry investment to maintain the country’s position near the top of the world’s aerospace industry powers.

While the initiative was announced in March, it is not clear yet if ATI will take physical or virtual form, but expectations for its impact are high. In return for its half of the seven-year investment, the government expects industry to select research and development (R&D) projects and develop technologies that will secure up to 115,000 high-value-added jobs in British aerospace.

The investment will be focused on four areas—civil aircraft wings, aeroengines, aerostructures and advanced systems—in which the country already is a leader. This initiative will tap the specialist wing plants of Airbus in the U.K. and Bombardier in Belfast, Northern Ireland; aeroengine developer Rolls-Royce; airframe and engine component manufacturers such as GKN Aerospace and Spirit AeroSystems; and equipment suppliers such as GE Aviation Systems and UTC Aerospace Systems.

The program is aimed at developing the “substantially different technologies” expected to be required for the next generation of single-aisle and regional aircraft, according to the U.K.’s Department for Business, Innovation and Skills (BIS).

The British government is committing more than £1.6 billion over 10 years to back its industrial strategy across several sectors. The commitment includes more than £1 billion in new funding from the U.K. Treasury and more than £500 million from the BIS budget. The largest part of the government’s investment will go to the aerospace sector, with funding for the Aerospace Technology Institute to reach £150 million a year by 2014-15.

“The U.K. aerospace industry probably has not enjoyed this much support from the government since the 1970s,” says Marcus Bryson, CEO of GKN Aerospace and Land Systems and co-chair of the Aerospace Growth Partnership, which developed the investment program. “Industry is at a critical phase and we cannot afford to take the foot off the gas in research and technology, especially when Airbus and Boeing are looking at what probably will be the next-generation single-aisle,” he adds.

“In the early days, it is a mix of committed and new money, but as we go forward an increasing amount of new money will be directed to aerospace from other sectors,” says an industry source familiar with the new initiative. “Aerospace has come out as a winner, and sits at the top [of the U.K. government’s industrial] priorities,” says the source, arguing that other industrial sectors were not able to make such a compelling case for government investment.

“In partnership with the government, we looked at the market data, saw the potential in single-aisle and regional aircraft was enormous and that the U.K. was well-placed to win significant packages. So we got the band back together, circled the wagons around “U.K. Aerospace,” and came up with a strategy that lays out a game plan to bring 30 years of work to the industry,” the source notes. Having secured the government’s funding commitment, “we are now putting shape to what we are trying to create,” the source adds.

ATI is to consist of a core team of 30-50 staff, mainly borrowed from industry and academia. According to BIS, the institute’s role will be to provide better alignment between early research—such as that supported by the Engineering and Physical Sciences Research Council—and larger-scale R&D projects managed by the Technology Strategy Board (TSB) and conducted by collaborative groups from industry and academia.

Some projects will be carried out by the High Value Manufacturing Catapult center, which was opened in 2011 and brings together seven institutions to support U.K. industry in the commercialization of new technologies. The Catapult focuses on R&D in areas such as advanced composites and metallics manufacturing for transport systems and satellite applications. Member institutions include the National Composites Center (NCC) at the University of Bristol.

The NCC was set up in 2009 with £25 million in government investment from the BIS/TSB and U.K. and European regional development funds. Ongoing operations are funded through a mix of industrial membership subscriptions, commercial contract work and U.K. and European R&D projects. The NCC is working on composites design and structural analysis, modelling and simulation, as well as automation and robotics.

The ATI is a national effort, and will be in addition to U.K. industry participation in European Commission-funded R&D such as Clean Sky and its planned follow-on Clean Sky 2. Aimed at reducing the environmental impact of civil aviation, Clean Sky is a €1.6 billion program funded 50:50 by the EC and industry and running from 2008 to 2017. Clean Sky 2 is planned to start in 2014 and run to 2020, with a proposed budget of €3.6 billion.

Like the European programs, the ATI initiative will be aimed at meeting environmental goals established by the Advisory Council for Aviation Research and Innovation in Europe (Acare). The Vision 2020 goals set by Acare include reducing carbon dioxide emissions and noise by 50%, and nitrogen oxides by 80%, relative to levels in 2000. The longer-term Flightpath 2050 goals call for reductions of 75% in CO2, 90% in NOx and 65% in noise.