AR VR person using virtual reality headset

Augmented reality and virtual reality

The UK augmented reality (AR) and virtual reality (VR) sector is a pioneer in the digital revolution, with the fastest growing market in Europe.

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The UK is internationally recognised for creative excellence and world-class innovation. From 2019 to 2024, it is expected there will be a 78.3% growth rate for spending on AR and VR in the UK. Growth is predicted to reach £62.5 billion by 2030, and the UK offers significant opportunities for investors.

Opportunity highlights

Radical innovation

The UK is home to globally renowned creative and technical expertise and UK immersive businesses are creating ground-breaking experiences across industries. Digital catapults encourage growth, providing facilities for companies and start-ups to create, demonstrate and commercialise their work.

AR and VR for any industry

AR and VR technologies are being used across industries, such as smart cities, engineering, film and TV, gaming and health tech. With 1,250 immersive technology companies operating across various sectors, the UK’s immersive industry provides a large pool of talent with a broad range of transferable skills.

Connecting for creativity

A range of services is available to the AR and VR sector in the UK. Immerse UK, for example, connects businesses to content, applications, services and solution providers, along with buyers and customers of immersive technology in the UK. Sentireal, an AR and VR firm based in Belfast, credits the assistance provided by Immerse UK in building business networks in the immersive technology sector.

Commercial maturity

The UK’s AR and VR strengths span all aspects of the industry from creation, development and production of immersive content to software and hardware creation. The industry can access talent from internationally recognised universities, such as Durham University, who excel in computer science. Durham has the UK’s first Intel oneAPI Academic Centre of Excellence.

The UK has consistently offered grants, such as 2021’s Audience of the Future – Design Foundations 2 challenge. This enabled UK-registered businesses to apply for a share of up to £800,000 for early-stage, human-centred design projects in creative or immersive experiences.

Key UK assets

A variety of hubs exist across the UK that offer exciting opportunities.

Northern Ireland

Northern Ireland has a several SMEs and corporations successfully investing in AR and VR technology. Belfast is a growing hub in the global technology scene, ranked 11th in the 2021 Tech Cities of the Future by fDi Intelligence.


Just as AR and VR have roots in gaming, Scotland also has strong ties to this industry, offering the world’s first computer games technology degree. Scotland offers a competitive cost and low-risk environment that can nurture growth in AR and VR, and Edinburgh is regarded as one the leading tech hubs in Europe.

The North East

The North East is an excellent location for AR and VR technology companies to access tangible market opportunities. The region has state-of-the-art research and development and innovation assets, such as 5 catapult centres, including the North East Tees Valley –Digital Catapult.

Manchester and the North West

Manchester and the surrounding area offer a selection of production and post-production facilities. Thanks to MediaCity, Sharp and Space Project, barriers to experimentation with AR and VR are relatively low.

R&D capability

The UK offers some of the finest talent in the world, from a range of top tier universities such as Oxford, St Andrews and Durham, who directly support research and development. For example, Oxford academics work with industrial partners in research council-funded projects to contribute to the efficient use of AR and VR in sector funded projects.

Tax relief through R&D tax credits can provide valuable funding for companies spending money on research and development, and direct investment from the British government reinforces efforts in this field. UK Research and Innovation, through the Audience of the Future challenge, invested £39.3 million in the development of new immersive technologies.

Business and government support

The Digital Skills Partnership provides skills to people and improves those within organisations to meet the domestic demand in the growing digital economy.

Vision 2035 commits the UK to supporting businesses in innovative sectors, such as AR and VR, and this is reflected in support provided by funding initiatives. The R&D tax scheme and Patent Box work alongside each other to incentivise and support business innovation. The Patent Box scheme provides a lower effective corporate tax rate of 10% on profits attributable to UK or certain European patents.

Networking organisations also assist the sector, with the UK Games Talent and Finance Community Interest Company helping the games development sector, which is closely tied to AR and VR.

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Case studies


Dublin-based VRAI creates data-driven VR simulation training for high-hazard environments with leading organisations such as IAG in Heathrow Airport, the UN in Somalia, and Fortune 500 companies. VRAI has expanded its operations to Gateshead, a demonstration of the potential and opportunities offered in the North East.


Queppelin is an AR and VR applications-development company founded in India, offering innovative solutions to clients across a range of industries. It’s one of many AR and VR companies that expanded operations to London, due to the opportunities and growing market in the UK.


VironIT is an Eastern European IT company founded in 2004. It provides custom software development services to help other companies stand out from the crowd in VR platforms.


Founded in India, Quytech provides UK businesses with solutions in a multitude of areas, including AR and VR, from car configuration to education. This more broadly reflects businesses taking advantage of the opportunities present in the UK market.