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05 Mar 2025

‘Now is the time to act’ techUK gives evidence to the Business and Trade Committee on the Industrial Strategy

On Tuesday 4 March, techUK’s Deputy CEO Antony Walker gave oral evidence to the Business and Trade Select Committee as part of their Inquiry on the Industrial Strategy. This assessed the Government’s progress so far. techUK gave evidence alongside our members Riverlane, Vodafone and Arm. 

The committee’s inquiry is looking to assess the Government’s delivery of the Industrial Strategy over the course of the current Parliament. As part of this, they are currently taking evidence on assessing success in the Industrial Strategy, how the Government can succeed with implementation, and how the sector plans proposed by Invest 2035 might be implemented.  

In addition to our oral evidence on 4 March, techUK has also flagged our response to the Government’s consultation on the Industrial Strategy and provided written evidence to the Committee. 

Antony Select committee 2.jpg

Antony Walker made several points, summarised below, about the future implementation of the Industrial Strategy: 

Progress so far on growth 

techUK reported that the sector remains in a positive and upbeat mood. The UK also has “enormous” technological strengths and clusters of excellence in numerous spheres. The UK Government has also been right to champion the possibilities offered by AI for the economy and for public services, and the Government must move at pace to ensure that the huge potential benefits of AI are realised across the UK.

However, the Government cannot afford to be complacent, especially with the strength of competition from countries abroad to grow their own tech sectors. The Government therefore need to ensure that the right investment, skills, infrastructure, and legal frameworks are in place to grow the sector. This includes through promoting digital adoption amongst the wider UK economy and ensuring that the revolutionary potential of technologies, particularly AI, to increase productivity is fully realised.  

Barriers to growth 

techUK was asked precisely about SMEs and procurement. While efforts such as Procurement Act have increased the potential for SME access into procurement, it remains to be seen whether those with increased powers to include SMEs will use these fully. Currently, SMEs still struggle in this area due to a risk averse culture from government that sees SMEs as a risky or financially challenging investment.  Unlocking SME productivity though could provide what has long been seen as ‘Holy Grail for growth’. 

More generally, techUK outlined how important ensuring scaleups and startup could access the necessary financial capital to stay and scale in the UK was for growing the UK’s tech sector. The Mansion House reforms are part of this effort, but the Government must go further in unlocking private capital for our most innovative companies.  

Implementation of the Strategy 

The Industrial Strategy itself is a significant undertaking by the Government, requiring coordination across several Government Departments, regulators and arms-length bodies. The size of this challenge is one techUK thinks the Government is really grappling with and the Industrial Strategy Council can certainly play a part in co-ordinating across central and local government to maintain strategic direction. The Digital and Technology sector plan must also ensure that the tech sector has the skills, infrastructure and capital needed to grow further and support the wider UK economy.

Actions the Government can take right away 

The Government should being moving at pace to support the tech sector and the wider UK economy, and can do so with the following actions: 

  • Begin delivering the AI opportunities action plan by outlining a roadmap and funding for implementing the accepted Government recommendations. This should also include timelines and metrics for assessing success. According to research, AI adoption could grow the UK economy by an additional £400 billion by 2030 through enhancing innovation and productivity in the workplace. 

  • Address legacy technology in critical public services, assigning appropriate funding to manage legacy technology and coordinate transformation. This is a vital foundation to realise plans to use AI more in public service delivery and modern systems can be scaled to handle increased demand, ensuring long-term sustainability. Alongside this, if AI is rolled out effectively across public services, it could save the UK’s public sector over £17 billion by 2035. 

  • Launch a review into the use of SIC codes to capture the true shape of the digital economy. Updated SIC codes can help ensure that resources are allocated more effectively to the sectors that need them most, and will help cover the 15% of UK firms not currently covered by the system. (One panellist pointed out a goatherd has their own SIC code but a semiconductor firm does not).  

  • Channel HMRC resources into improving the effectiveness of existing digital services and delivery of flagship digital economy programmes. Simplifying and digitising the tax system has the potential to significantly boost productivity with some businesses experiencing gains of up to 11.8% 

These measures will help the UK address its low rates of digital adoption, supporting both the UK tech sector and the wider economy to grow faster, together.  

techUK wishes to thank the Committee for inviting us to give evidence, and we stand ready to help them with this or any other inquiries in the future.  

Antony Walker

Antony Walker

Deputy CEO, techUK

Edward Emerson

Edward Emerson

Head of Digital Economy, techUK

Mia Haffety

Mia Haffety

Policy Manager - Digital Economy, techUK

Archie Breare

Archie Breare

Policy Manager - Skills & Digital Economy, techUK

 

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