Powering the future

Following on from our first article looking at the UK’s Industrial Strategy, we drill down into each of the sector plans. 

Here, we consider the first of those by looking at the ‘Advanced Manufacturing Sector Plan’, published on 23 June 2025. 

One minute read: the essentials 

The Advanced Manufacturing Sector Plan identifies and focuses on six priority areas deemed as having the highest growth potential over the next decade, namely:

• Automotive

• Batteries 

• Aerospace 

• Space 

• Advanced Materials 

• Agri-Tech

Advanced Manufacturing has rightful prominence as part of the industrial strategy given it directly supports around 760,000 jobs and contributes more than £82 billion to the UK economy every year. The Plan sets an ambitious target of doubling annual business investment in Advanced Manufacturing from roughly £21 billion to £39 billion by 2035. The ultimate goal being that by 2035, the UK will be recognised as the best place in the world to “start, grow and invest” in Advanced Manufacturing.

From a strong foundation, the plan involves a four pronged step change: 

• reforming the business environment so that the sector has long term certainty and stability; 

• prioritising the frontier manufacturing sub-sectors noted above;

• realising economic possibilities of advanced manufacturing clusters; and

• delivering joint commitments from both government and industry as partners.

While we explore each of these steps in the longer article below, the plan is clear in relying upon the county’s existing manufactures, innovators and commercial partnerships including existing research ecosystems. As acknowledged in the plan, the ambitious aims are to be achieved while dealing with shifting geo-political risks, security threats, cheaper competitors and technological rivalry.

At Hill Dickinson, we’re well equipped to help clients navigate this new landscape—structuring innovative contracts, managing risk, and unlocking growth. 

Ten minute read: what you need to know 

The four manufacturing principles are explained further as follows:

1. Reforming the business environment

In this context, the main aims are: 

Building supply chain resilience

Due to its highly specialised supply chains and the political appeal of protectionism, the sector is particularly vulnerable to global shocks. In response to these challenges, the plan aims to:

• improve the financial elasticity and international competitiveness of the sector;

• to increase the UK’s defence industrial base; and 

• reduce reliance on near-monopoly sources of critical inputs,

• to ensure supply chains are diverse and unswerving throughout unstable environments.

There is more than a nod to rising energy costs being an ongoing concern. A number of schemes are in various stages of development including a new British Industrial Competitiveness Scheme will seek to reduce electricity costs. A consultancy process is due to commence soon which will establish eligibility. In addition to alternative routes to market for energy; a Connections Accelerator Services is being established to support projects particularly those which create jobs and bring economic value. 

Further, an imminent Critical Minerals Strategy will aim to secure a steady supply of minerals optimising domestic resource; a £625m investment in construction skills will seek to plug skills gaps; a suspension of the UK Global Tariff on 89 products seeks to reinforce resilience; the establishment of a new “Supply Chain Centre” will conduct data driven reviews of critical supply chains to monitor resilience; a loan guarantee scheme from UKEF will look to unlock £80bn of finance capacity.

Lastly within this aim, the country will seek to capitalise on the growing global demand for advanced manufacturing by exploiting existing and growing new international relationships. 

Becoming a global leader in innovation and automation

In terms of becoming a global leader in innovation, the UK already excels in the field of academic research, and there is a growing desire to enhance this research to drive innovation in commercial markets – alongside increasing the share of private investment available for frontier industries. 

In order to bridge the scale up gap, there will be a greater focus on co-investment with the private sector, supporting the sector through regulatory reform, driving innovation and creating a more streamlined approach for business to find guidance. 

Developing a digitally literate, skilled, and inclusive workforce

The aim is to develop a long term government and business partnership to maintain a skills pipeline. Skills England is tasked with assessing skills at national, regional and local level and engaging with partners to ensure training is available in a value for money manner. 

A widening of the apprenticeship offer has been a commitment of the government together with initiatives to boost expertise, in particular, including the Turing AI Global fellowships seeking to bring give of the worlds best AI experts to the country to leverage the capability of the emerging technology. 

2. Prioritising the UK’s frontier manufacturing industries with the greatest growth potential

The Plan identifies six ‘high growth’ areas of Advanced Manufacturing whereby the UK have an advantage in the global market. 

Automotive: The UK’s well established automotive sector is under intense economic stress due to a range of factors such as global instability, the emergence of China as a major car manufacturer, high energy costs and the transition to automated and zero emission vehicles (ZEVs). As a way of alleviating this, the Plan intends to:

• drive growth to over 1.3m vehicles made by 2035;

• cement the UK’s leadership in pioneering technologies, including ZEVs leveraging a minimum of £6.6 billion in private investment into the market; 

• lead the transition to ZEVs;

• create the first European market for automated self-driving vehicles; and

• build on the UK’s international partnerships and globally competitive exporting practices. 

To achieve this, the government is committing £2bn of automotive capital and R&D funding and an additional £500m to extend existing R&D support. There is additional focus on connected and automated vehicles and a scheme to support automotive companies sell to key markets including North America, Japan, China, India and Western Europe.

Batteries: The Battery manufacturing sector is a vital focus within the Plan as it underpins manufacturing across almost all sectors. As such, the proposed approach is to:

• build on existing UK strengths to maintain a competitive sector;

• support industry to meet demand in energy capacity and chemistry;

• scale up R&D;

• increase the number and turnover of companies in the UK in the early stages of the supply chain; and

• increase the combined turnover of companies involved in reuse, recycling and end of life to increase recycled content. 

The Battery Innovation Programme (formerly Faraday Batter Challenge) will continue to drive innovation through £452m investment to 2030. A further Circular Economy Taskforce has been convened to establish a strategy due in Autumn 2025 which will look at recycling capabilities. Finally, there is a commitment to increase use of battery energy storage systems (BESS) to add resilience to the UK’s power network.

Aerospace: the approach in respect of aerospace includes:

• securing at least £35bn to 2050 of additional private investment;

• increasing the UK’s share of global market from 10% to 15% by 2050 (targeting next gen narrow body aircraft);

• deploying more efficient technology, reducing emissions and making travel more sustainable; and

• increasing coordination with the defence sector.

The Aerospace Technology Institute Programme will be extended with up to £2.3bn to 2035. There is an acknowledgement that sustainable aviation fuel represents a growth opportunities with £63m available to 2026 in this area. Finally, regulatory impacts on the drone industry is being considered to support scaling with an additional £20m additional funding for the Future of Flight programme to 2026. 

Space: the plan acknowledges that support in this area to date has been disparate and as such the approach is more targeted:

• growing the sector and targeting specific capability (see below) to become a leading industrialised European exporter by 2030;

• increasing revenue generation by creating more industrialised companies with £10m revenue;

• unclicking access to capital for companies to scale;

• creating competition and diversity within the sector; and

• enhancing supply chain resilient to support security and defence. 

The targeted capability are: Satellite Communications; Position, Navigation and Timing; In-orbit Servicing; Assembly and Manufacturing; Space Domain Awareness; and Space Data Architecture. There is an aim to become one of the few European nations able to deliver end-to-end satellite manufacture and launch. A number of schemes seek to support the scale up of companies within the sector including National Space Innovation Programme and Space Clusters Infrastructure Fund and the Unlocking Space programme. An additional £135m has been pledged to such programmes. 

Advanced Materials: described as a broad range of material from next generation metallics to bio-materials, there is again an acknowledgement of the fragmentation and lack of co-ordination across the sub-sector. The approach:

• to coordinate between government, industry and academia;

• accelerate development and adoption of materials;

• maintain a world class environments for R&D; and

• build international partnerships to set standards.

£50m has been committed to a phase 1 of a National Materials Innovation Programme aimed at encouraging collaboration. Addressing potentially the biggest blocker in this area, the plan refers to existing spend commitments in addressing the shortage of high-quality STEM skills and expertise for advanced materials. 

Agri-tech: the last of the “high growth” areas, innovation in agri-tech is focussed on:

• reduce sector dependency on public investment by drawing in at least £50 million in private investment by 2029; 

• significantly increasing the application of automation in priority farming sectors; and

• achieving an agri-tech turnover sector of £20bn by 2035.

£200m is being made available for the Farming Innovation Programme to 2030 to support increased productivity, progress to net zero and reducing the sectors reliance on seasonal migrant labour. Further, an Agri-Tech Export Accelerator Programme has been promised to match high-growth business with markets. A number of programmes and grants are under consideration to assist farmers to trial new technologies.

3. Realising the economic possibilities of clusters 

With 84% of Advanced Manufacturing jobs located outside London, there is a drive to support the UK city regions and clusters where such skills are concentrated as well as building connections between them. This includes areas in Edinburgh and Glasgow central belt, north east, Belfast city region, Yorkshire and the Humber, Wrexham and Flintshire, West Midlands, South West, North West, East Midlands in addition to the Oxford to Cambridge growth corridor. The government promises increased collaboration with local authorities and Mayoral authorities; a regional spend map; a network of robotics adoption hubs; identification and preparation of new sites; backing the network of Industrial Strategy Zones; providing the named Investment Zones with £160m each over 10 years to stimulate growth; and maximising the impact of Freeports. 

4. Creating an enduring partnership between government and industry 

This section explores how industry is also stepping up to support businesses across the Advanced Manufacturing sector through various initiatives and private investment. Lighter on detail presumably because this is not entirely within the Government’s gift, the plan promises to build on existing partnership such as the High Value Manufacturing Catapult and calls for support in the flagship programmes of: Battery Innovation Programme; Space Clusters Infrastructure Fund; DRIVE35; CAM Pathfinder and Farming Innovation Investor Partnerships Programme. Skills based development will be considered in partnership with industry and local regions for the development of Local Skills Improvement Plans. 

Conclusion

In light of the UK Government’s landmark policy paper and as the world races towards the Fourth Industrial Revolution, our Commercial IT and IP team is well equipped to advise clients through this evolving landscape.

At Hill Dickinson, we’re uniquely placed to steer clients through today’s evolving landscape — leveraging our expertise in the sector to provide thorough and commercially astute advice, draft forward-looking contracts, manage risk and ensure your company’s day-to-day operations are efficient. 

We provide pragmatic and commercial advice on the full range of commercial, IT and IP agreements and issues that clients come across. This includes drafting and advising on:

• IT infrastructure such as ERP and CRM systems, sales

• Grant funding arrangements

• Platforms, customer portals

• Continuity systems such as digital twins

• Managed warehousing arrangements

• Strategic supply arrangements

• IP protection

• Servitization transformation

Whether it is helping you with a new strategic relationship, assisting with you a transformation or ensuring your day to day operations are efficient, we have a team of experts who can help to manage your risk and encourage growth.