The UK government has published a ten-year strategy outlining how it aims to boost productivity and innovation across eight key sectors of the economy. From the future of AI to energy security and net zero, it's a broad and ambitious plan. Our experts assess what it tells us about how the UK economy - and the jobs it offers - could look in future.
Authors
- Michael A. Lewis
Professor of Operations and Supply Management, University of Bath
- Bernard Hay
Head of Policy at the Creative Industries Policy and Evidence Centre, Newcastle University
- Doug Specht
Reader in Cultural Geography and Communication, University of Westminster
- Kamran Mahroof
Associate Professor, Supply Chain Analytics, University of Bradford
- Sarah Hall
Professor of Economic Geography, University of Cambridge
Nuclear placed firmly in the centre of the UK's low-carbon future
Doug Specht, Reader in Cultural Geography and Communication, University of Westminster
For clean energy and industrial growth, the strategy presents an ambitious and comprehensive vision. And it seeks to establish the UK as a global leader in clean energy manufacturing and innovation. A key strength lies in its substantial investment commitments, however this includes £14.2 billion for the controversial Sizewell C nuclear power station and more than £2.5 billion for a Small Modular Reactor (SMR) programme.
Nuclear energy remains controversial - nevertheless, the strategy firmly places it as a central pillar for low-carbon, reliable energy and national security.
The strategy also targets high-growth sectors, prioritises regional development and introduces support schemes and regulatory reforms to tackle high electricity costs for industry, and slow grid connections. Yet despite these potential strengths, there are notable challenges. Implementation risks are significant, given the ten-year timeframe and potential shifts in political priorities.
And regional disparities and social inequalities may not be fully addressed, as the focus is on high-potential city regions. Some areas could be left behind. Skills shortages in engineering and digital sectors persist, and there is not enough detail on reskilling and lifelong learning. The importance of supply chain resilience, especially for the critical minerals needed for the green transition is acknowledged but not fully assured.
Overall, the strategy is ambitious and well-structured. But a reliance on nuclear rather than true renewables is seeking a quick win with high risks and high costs. A more radical and inclusive plan that expanded green infrastructure, and provided details of resilient growth across all regions and sectors, would have been welcomed.
An innovation boost for the UK's world-leading creative industries
Bernard Hay, Head of Policy at the Creative Industries Policy and Evidence Centre, Newcastle University
The plan for the creative industries is a significant step forward for this critical sector. With multiple new commitments announced on areas ranging from scale-up finance and AI to skills, exports and freelance support, there is a lot to welcome for the sector. After all, it already accounts for over 5% of the UK's annual gross value added (or GVA - which measures the value of goods and services) and 14% of its services exports .
One key aspect is boosting creative industries' research and development (R&D), which is a driver of innovation, productivity and growth. This includes £100 million for the Arts and Humanities Research Council's clusters programme , which supports location-based, creative R&D partnerships between universities and industry.
And by the end of the year, HMRC will publish clarification on what types of activity are eligible for R&D tax relief, to include arts activities that meet certain criteria. This is a nuanced change, but together with the other plans, it could have a catalytic effect on innovation in the sector.
Supporting regional creative economies is a golden thread running through this plan. A new £4 billion group capital initiative from the British Business Bank, announced earlier in the spending review, will be an important source of scale-up finance for small and medium-sized creative businesses that face barriers in accessing capital .
It is also welcome to see the government both increasing creative industries investment in several city-regions and supporting places to join up and work together through "creative corridors" . Coupled with the ongoing devolution of powers and funding in England, the next decade provides a huge opportunity for local policy innovation. This includes sharing and scaling proven strategies in growing regional creative economies.
An effective industrial strategy relies on high-quality data and analysis to support it. This is especially true when dealing with a rapidly evolving part of the economy such as the creative industries. The new plan includes commitments to strengthen the evidence base, including by increasing access to official statistics. This is good news not only for researchers, but for the whole sector.
Advanced manufacturing: promising plans, but persistent problems
Michael Lewis, Professor of Operations and Supply Management, University of Bath
The government plans to invest £4.3 billion in advanced manufacturing. This covers research-driven production in sectors including automotive, aerospace and advanced materials (engineered substances that are especially useful in these industries). Some firms may also get energy cost relief through green levy exemptions.
A long-term plan is overdue, but the challenges are huge. Automotive production is targeted to rise substantially , but the sector will still depend heavily on a range of critical imports. The aerospace sector will start 40,000 apprenticeships by 2035, yet further education funding remains below 2010 levels . Much of the promised investment appears to be the repackaging of existing funding.
Most importantly, how to deliver these changes remains unclear. There are good ideas, like £99 million to expand the relatively successful Made Smarter Adoption programme to help small and medium-sized enterprises employ digital technology. But when helping small firms adopt basic digital tools counts as policy success, it shows how far UK manufacturing has fallen behind competitors. Likewise, when you need a new "connections accelerator service" just to help companies connect to the grid, it shows the scale of basic infrastructure problems that undermine grander ambitions.
Overall, the strategy marks real progress. However, without clear delivery plans, it reads more like a wish list than an action plan. This explains why industry reactions have been cautiously optimistic at best.
A chance to take the lead in the global AI race
Kamran Mahroof, Associate Professor of Supply Chain Analytics and Programme Leader for the MSc in the Applied Artificial Intelligence and Data Analytics, University of Bradford
From a digital and technologies perspective, the industrial strategy appears to signal a strong commitment to anchoring the nation at the forefront of the global AI race. The proposed Sovereign AI Unit shows an intent to ensure national control and access to critical AI infrastructure, computational power and expertise.
This is pivotal, not only for research and development, but also for national security and economic resilience in an increasingly AI-driven world. It points to a recognition that relying solely on external providers for cutting-edge AI capabilities carries inherent risks .
Besides, some of the world's most innovative AI businesses are based in the UK. British companies are pushing the limits of what is feasible, from Synthesia's advances in synthetic media to DeepMind's developments in machine learning. In sectors including public safety, insurance and defence, smaller firms like Faculty, Tractable and Mind Foundry are also having a significant impact.
Complementing this, the AI Growth Zones are designed to act as regional magnets for investment and innovation, particularly in the realm of data centres and high-density computational facilities. By streamlining planning and providing preferential access to energy, these zones could accelerate the development of the physical infrastructure needed.
This decentralised approach has received more than 200 bids already from local authorities. It also has the potential to spread the economic benefits of AI beyond established tech hubs, encouraging new regional powerhouses and creating high-skilled jobs right across the UK.
Taken as a whole, these projects show a deliberate effort to develop core competencies and draw in private-sector funding. This puts the UK in a position to benefit from AI's potential. This effort to develop national AI capabilities is not a new idea - it echoes the US AI executive order and the EU's AI Act.
However, given the dominance of global tech giants, the UK needs to define "sovereignty" in practice and decide whether it is willing to provide large-scale funding. At a time when debates continue around the UK's defence budget - a field now deeply intertwined with AI - more transparency is needed on how these ambitions will be funded.
Growth plans for financial services - and moves to share the benefits beyond London
Sarah Hall, 1931 Professor of Geography, University of Cambridge
One of the most striking elements of the new plan is that it places financial services much more centrally compared to previous approaches.
There are good reasons for doing this. Financial services are a vital component of the UK economy, contributing close to 9% of economic output in 2023. Clearly then, an industrial strategy without one of the most important economic sectors would make little sense.
There is also a welcome emphasis on the ways in which financial services can grow, not only as a sector in its own right, but also to be better integrated in supporting the growth of other parts of the economy. Some important policy moves have already been announced, such as changes to pension funds aimed at increasing their investment in large infrastructure projects.
In order to meet these ambitions, the strategy is right to note that financial services need to be supported, not only in London but also across the many clusters around the UK. These include, for example, Edinburgh, Manchester and Bristol.
There will be more details in the sector plan, released alongside Chancellor Rachel Reeves' Mansion House speech on July 15. At that point, we will be able to assess the measures intended to grapple with two longstanding issues for UK financial services. That is, how does the government bridge the gap between finance and the "real" economy (goods and non-financial services)? And how does it bridge the gap between London and the rest of the UK?
Michael A. Lewis receives funding from AHRC, EPSRC and ESRC.
Bernard Hay is Head of Policy at the Creative PEC, a partnership between Newcastle University and the Royal Society of Arts, which is funded by the UKRI via Arts and Humanities Research Council.
Sarah Hall receives funding from an ESRC Fellowship grant.
Doug Specht and Kamran Mahroof do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.
