Since the new UK government came to power last year, it has been operating in economic headwinds. Public finances continue to face pressures while ongoing geopolitical tensions are disrupting global trade.
To face these challenges and stand by its call for growth, the government’s domestic policy agenda has not been short of action. In the past 10 months alone, we have seen the publication of the AI Opportunities Action Plan and the Industrial Strategy green paper, alongside numerous other consultations, reviews, and strategies including the immigration green paper and the Strategic Defence Review, as well as legislative packages on workers’ rights, data use and access, and planning reforms, among others.
A pattern across the government’s policy has been the recognition of the role technology plays in helping the UK face its current challenges. But as we near the publication of the Industrial Strategy, it’s more important than ever that technology is put front and centre.
The Industrial Strategy aims to not only drive growth and attract investment into some of the UK’s most successful sectors – including the technology sector itself – but also looks to create a more dynamic economy by improving general business conditions, lowering operating costs and, above all, providing some stability in the medium to long term after years of stop-and-start growth policies.
Good intentions
Delivering on the ambitions within the Industrial Strategy will demand more than just good intentions. It will rely on Whitehall to break down silos, nurture the digital skills the sector needs, and build meaningful relationships with industry. To do that, we need three key building blocks in place that will act as a strong foundation and support delivery across the strategy’s 10-year lifespan.
First, while the strategy rests on eight key high-growth sectors, it’s clear that technology underpins them all. From defence to life sciences and energy, technology is the enabling force tying everything together.
We need to ensure that each sector plan is connected, considered, and coherent with the others. What use is a modern plan for the defence sector without cyber resilience built-in by design? Likewise, a manufacturing plan that doesn’t take into account robotics, AI, and high-speed connectivity will inevitably fail in the global landscape.
We need to see policy continuity across sectors to give businesses confidence – not conflicting and confusing messages.
We need to see commitment to a new way of working between government and industry Julian David, TechUK
Second, targeted support on tech and AI adoption is vital to unlock growth in all sectors of the economy. The upcoming government response to the Technology Adoption Review – sitting separately to the Industrial Strategy – will be an important moment to understand exactly what barriers are preventing businesses from adopting new technologies and innovating.
The review is vital work that must proceed at speed to unlock the next generation of transformative technologies and, most importantly, share in their benefits. We cannot risk a two-tier economy, where only the most digitally mature businesses benefit from the next wave of innovation, such as agentic AI and quantum. Improved support for digital adoption, particularly for SMEs and scaleups, will build resilience, unlock productivity, and ensure businesses are ready for what’s next.
Finally, we need to see commitment to a new way of working between government and industry. The UK continues to face uncertain and challenging times, but we also have numerous strengths – world-class research institutions, deep tech capabilities, and a strong, interconnected tech sector.
In fact, 50% of senior leaders surveyed by TechUK earlier this year cited the existing presence of other tech businesses as their key reason to operate in the UK.
Building the future
The government should not simply celebrate this fact but recognise it as the crucial resource that it is and engage proactively on key questions facing the sector. That means ensuring that policymakers work together with the companies building our future, involving real-world innovators like Arondite, a defence deeptech company building the foundational software and AI to enable the scaled use of sensors, robots, and autonomous systems, and Pragmatic Semiconductors, enabling smarter manufacturing with flexible chips.
These companies are just two examples of great British talent and innovation, adding to the recent successes of Wayve in autonomous vehicle technology and the strides FacultyAI has made in deploying AI in the NHS.
The foundations are in place. The ambition is clear. But to realise the full potential of the Industrial Strategy, government must act decisively – building strong links across departments, accelerating digital adoption, and embedding tech expertise into every stage of policymaking.
