techUK news and views
14 Oct 2024

The 2024 Industrial Strategy Green Paper – what’s in it for tech?

On 14 October 2024, the Government published its Industrial Strategy Green Paper to coincide with the International Investment Summit. Below, techUK sets out what the Industrial Strategy looks like and where the Government proposes action relevant to the tech sector.  

What is the Industrial Strategy? 

The current Government promised an industrial strategy as part of its 2024 General Election manifesto, building proposals explored in Labour’s Industrial Strategy (2023), published while in Opposition, setting out their initial thinking on how a government industrial strategy would work. The Industrial Strategy published today is the first step in implementing that pledge. 

This strategy itself is a Green Paper, which unlike a white paper and is where a Government sets out its broad policy proposals to gather feedback before committing to action. Therefore, while nothing in the Industrial Strategy is set in stone, it does show how the Government is currently intending to act.  

The Department of Business and Trade will consult on the Industrial Strategy until 24 November 2024.  

How is the Industrial Strategy organised? 

The Industrial Strategy is framed as a ten-year forward plan for the UK economy. The strategy focuses primarily on growth, but also ties in cross-economy enablers of growth promoting net-zero, regional growth, and economic security and resilience, helping fulfil Labour’s other missions (especially on the NHS). 

The Strategy outlines a series of ‘growth-driving sectors’, key verticals of economic activity which the Government propose to focus on as they offer the highest potential for UK economic growth.  These will each get their own sector plan and are: 

  • Advanced Manufacturing  
  • Clean Energy Industries  
  • Creative Industries  
  • Defence 
  • Digital and Technologies  
  • Financial Services  
  • Life Sciences  
  • Professional and Business Services 

These are then set alongside key horizontals, including barriers to growth and enablers of growth, which the strategy aims to overcome in order to foster growth in the ‘growth-driving sectors’. These are: 

  • People and skills 
  • Innovation 
  • Energy and infrastructure 
  • Regulatory environment 
  • Crowding in investment 
  • International partnerships and trade 
  • Supporting growth across the UK 
  • Creating partnerships and institutions for success.  

Tech is in a strong position by featuring both in the growth-enabling sectors and in enabling the growth of the wider UK economy. techUK has long promoted this dual role of technology, particularly in our UK Tech Plan and our Seven Tech Priorities, with tech offering a boost to the wider British economy of £200bn a year by the end of the 2020s with the right support. 

The Industrial Strategy also includes further details about the Government’s planned next steps, including developing a Business Partnership Framework to underpin the design and implementation of the Industrial Strategy, finalising the Industrial Strategy Council and working closely with regional, local, and devolved government partners to build out local plans for growth aligned to the national Industrial Strategy framework.  

What are the key takeaways for tech? 

Government chooses areas of focus including sectors and places 

The Government has taken the approach of focusing on key areas and locations for economic growth, such as clusters, urban areas, and special economic sites, while addressing the most pressing barriers to growth. The Green paper demonstrates that the Government cannot support every sector, so it is prioritising those with the greatest impact. In these key areas, the Government is also likely to select specific 'sub-fields' for attention. To encourage private investment, it proposes establishing institutions such as the aforementions Industrial Strategy Council to oversee the strategy’s implementation and consult with businesses, trade unions, and devolved governments.  

techUK welcomes the formation of the Industrial Strategy Advisory Council, chaired by Microsoft UK CEO Clare Barkley, and the proposed Business Partnership Framework, which will engage with businesses. techUK has long advocated for collaboration between the Government and the tech sector to unlock the UK’s economic potential, and it is pleased to see this approach. 

techUK also supports the emphasis on regional growth and Place, as reflected in our yearly measurement and promotion of Local Digital Capital, techUK is ready to assist the Government in tracking outcomes but cautions against creating new 'left-behind' areas, which the Government acknowledges must not happen. 

Tech as a ‘growth-driving sector’ 

As mentioned, tech plays a key role in the growth-driving sectors of the Industrial Strategy. 

In the Digital Technologies vertical, the Government recognises that the wider economy has been transformed by digital technology, and that the UK’s international position in technologies such as AI are not just economic matters but matters of geopolitical security. The Government proposes meanwhile that 'To deliver growth in this sector the Government will focus on a range of technologies and their commercialisation, with a portfolio approach that backs smaller, less proven, and more disruptive businesses alongside larger, well-established businesses in existing sectors.'  The Government have posed an open question as to which technologies these should be.  

techUK is glad the Government have recognised the value of promoting scaleups, which techUK promoted in the Seven Tech Priorities, alongside the imperative the UK does not fall behind internationally in the race to commercialise and adopt key technologies such as AI.  

Tech also features widely in the other key growth sectors, as Government recognises tech plays in important role in supply chains across the economy and in enabling a range of applications. One example of this is in Defence, where tech is mentioned as likely to play a key role in a planned Defence Industrial Strategy, as well as Life Sciences, where tech’s role in the rebuilding of the NHS is championed. 

Tech & Innovations role in enabling wider UK economic growth   

Innovation and Data are two areas the Government has identified that can be used to drive wider economic growth across the UK economy. 

On innovation, the Industrial Strategy focuses on squarely on technology adoption, drawing a contrast between the UK’s research and development prowess and the slower pace of adoption of frontier tech in the wider UK economy. The Strategy also promises an AI Opportunities Action Plan from ARIA to show how just one technology can boost the wider economy. This focus on diffusion is something techUK welcomes. Our recent report, Small Enterprises, Big Impact, outlines how the UK can add almost £232 Billion to the economy through SME digital adoption alone, and techUK has policy suggestions which the Government can take up to boost digital diffusion in our Seven Tech Priorities. 

On data, the Government recognise that data is not currently being used as productively as it could be by businesses. The Industrial Strategy proposes three courses of action for data transformation: 

  • Using public sector data to drive growth 
  • Empowering businesses and individuals with data through smart data schemes 
  • Improving data maturity in businesses 

techUK welcomes all of these as ways to use the UK’s data to further grow the economy, and we would encourage the Government to move forward with the Digital Information and Smart Data Bill to create the framework to do this. techUK though also urges the Government to think about how using data can go wider, particularly in life sciences, to support the work of the Government in fulfilling their other missions. 

How the wider strategy will enable growth in the UK tech sector 

The Government will not just be using tech to enable the wider economy, but using wider economic policies to enable tech. The Industrial Strategy provides answers to each of the five challenges techUK outlined in the UK Tech Plan in 2023, and we are glad to see a series of recommendations taken up by the Government. These include: 

  • On skills and adoption, by reforming the Apprenticeship Levy to provide wider support for skills something techUK called for in the Seven Tech Priorities. The Strategy outlines that this will be done through Skills England, a body announced in the Kings Speech. This could go further through establishing a new Digital Skills Toolkit for those already in work.  
  • On regulation, using smarter regulation to foster innovation and make quicker decisions while directing regulators to promote growth. measures techUK called for in our UK Tech Plan.
  • On investment, expanding the availability of capital to UK businesses, including committing to a review by the Chancellor and Minister for Work and Pensions on how pensions are invested in the UK. This should build on the Mansion House Reforms supported by techUK. techUK also supported the outcomes of the Harrington Review, which is cited in the Strategy.
  • On procurement, using the procurement budget to support UK businesses.

There are other areas where tech is directly referenced, this includes on infrastructure where the Government has committed to developing a 10-year infrastructure strategy. The Government has also recognised the need to build new data centres to enable digital adoption of new technologies such as AI, and techUK recently supported changes in planning policy to enable this in our response to the Government’s National Planning Policy Framework consultation and will continue to call for faster connection to energy grids for tech infrastructure. 

Next steps 

As the Industrial Strategy is just the start of a conversation, the Government have opened a consultation on the Industrial Strategy until 24 November 2024. techUK will be responding to this consultation and look forward to working with the Government further on fine-tuning and then implementing this Strategy and in creating the sector-specific strategies for each Growth Sector. 

techUK members who want to get involved or who have questions about techUK’s response should email [email protected] and [email protected].  

“The vital importance of tech and innovation is clearly represented in the Industrial Strategy which focuses on strengthening the UK tech sector itself and accelerating the diffusion of new technologies across the economy and public services. The OBR says this has the potential to add £47 billion to the UK economy. This dual focus is welcome and something techUK has long called for. To succeed the Industrial Strategy must be grounded in practical and specific actions, with clear targets. It must use all the levers of government to crowd investment into its eight growth-driving sectors while tasking government departments to work in collaboration with business to identify the right policy interventions and partnerships to kick start growth across the economy. We welcome the appointments of Clare Barclay of Microsoft as Chair of the Industrial Strategy Challenge Council and Poppy Gustafsson as Investment Minister. These appointments provide is a clear signal that the government wants to build a long-term partner with business deliver its growth plans. This is a good start, and techUK looks forward to working with the Government to make the Industrial Strategy a success.

Antony Walker

Deputy CEO, techUK

Antony Walker

Antony Walker

Deputy CEO, techUK

Neil Ross

Neil Ross

Associate Director, Policy, techUK

Samiah Anderson

Samiah Anderson

Head of Digital Economy, techUK

Archie Breare

Archie Breare

Public Affairs Manager, techUK

 

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