Seizing the opportunity

In the first of a series looking at the UK’s Industrial Strategy published on 23 June 2025, we consider first the over arching strategy and what this means for what are described as the country’s “frontier” sectors. In follow up articles, we will look at the dedicated strategy for each such sector.

1-Minute read: the essentials 

The UK’s 2025 Industrial Strategy is a 10-year plan to boost investment, productivity, and innovation across key sectors being: Advanced Manufacturing, Clean Energy Industries, Creative Industries, Defence, Digital and Technologies, Financial Services, Life Sciences and Professional and Business Services (perhaps mechanically named the “IS-8”).

It commits to long-term certainty, simplified regulation and strategic government support to help businesses scale and compete globally. For those in the relevant growth sectors, this is a call to action: align with national priorities, embrace innovation, and prepare for a more collaborative relationship with government.

There are four main pillars making up the strategy being (1) making it easier to do business in the UK through stability and certainty (2) facilitating investment and growth in city regions and clusters (3) prioritisation of the frontier sectors which make up the IS-8 and (4) creating an enduring partnership between business and state.

There are also parallel themes which appear throughout the strategy: 

• Artificial intelligence: a commitment to make the country a prime exporter of AI which suggests a real focus on those firms developing the same. Further, the IS-8 are encouraged to embrace transformation and to invest and leverage artificial intelligence so as to maximise the chances of becoming a “superstar” firm;

• Net zero: encouraging the circular economy and achieving energy security while achieving economic goals. 

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

5-Minute Read: what you need to know 

The four main pillars each come with a dedicated “approach”:

1. Long-Term Certainty – Government is committing to a stable, predictable policy environment to encourage private investment. This commitment in particular talks to: 

   1. reducing energy costs and accelerating grid connections: electricity prices are quoted as being one of the biggest inhibitors to growth for industrial entities and solving this issue is critical to encourage growth;

   2. further promoting trade and international cooperation: the main objectives being to unblock barriers for import and export; foster greater cross border collaboration and support UK business to exploit opportunities in other economies;

   3. strengthening economic and national security: with an approach including using public finances strategically; strengthening foundational national infrastructure; and improving support to businesses and implementing resilience into the defence sector;

   4. expanding access to finance: unlocking more funds for those in the IS-8; improving the UK’s venture eco-system; reforming capital markets and pension investment; and ensuring a proportionate investment focus on security;

   5. driving innovation: through prioritisation of support to the IS-8; focusing R&D activity on long term growth; using science and technology to drive economic growth; creating a package of support to assist scale-up activity; making the UK the best place in the world to invest in AI; encouraging the IS-8 to increase technology adoption; and maximizing spillover benefits of technology specialisms in other frontier industries;

   6. capitalising on the value of data: treating data as an asset by creating conditions for investment in the same; ensuring that there are sufficient tools, infrastructure and capability to unlock the benefits of such data; and transforming how data is used to encourage growth and improve lives;

   7. enhancing skills: aligning the skills system to economic priorities; simplifying the skills system; encouraging engagement and investment from employers to address skills gaps and the building of talent pipelines; making it easier for talent to live and work in the UK; and promoting evidence based initiatives to improve diversity;

   8. reducing regulatory burdens: engaging in a “root and branch” reform of the regulatory system; and prioritising reform for the IS-8;

   9. removing planning barriers: by ensuring that the planning framework supports growth in the IS-8; and providing greater confidence in planning and design;

   10. delivering a tax system which supports growth: by achieving an internationally competitive headline tax rates; offering world leading capital allowances; making available significant R&D tax credits; establishing a competitive Patent Box; ensuring that investment schemes are aligned to strategy; establishing schemes to support businesses in recruiting and retaining talent; tax reliefs for creative sectors; and financial incentives around training.
        

2. Regional Growth – A focus on city regions and industrial clusters to level up productivity across the UK achieving the following:

   1. focused effort on particular regions: with targeted, sector specific investment on a region by region basis including accelerating investible sites; packages to encourage investment into regions and clusters; partnerships with devolved governments to build on the strengths of each; joint working with local authorities to align the industrial strategy with local growth plans;

   2. strengthening connections between and within regions; improving connectivity and transport links and encouraging innovation, access to talent and strengthening supply chains;

   3. streamlining and encouraging a fairer judgement of investment opportunities: not least simplifying guidance when applying the “Green Book” to introduce “placed-based business cases”.
       
      No less than nineteen areas across the UK have been identified as opportunity areas for particular IS-8 focus from all corners of the country.
       

3. Frontier Innovation – Future articles will focus, in particular, on the strategies in respect of the IS-8 plans which have been published (which, as at the date of this article being advanced manufacturing; creative industries; clean energy; digital technologies; and professional business services).
     

4. An enduring partnership between business and state – the final pillar talks to the UK pursuing an ethos of co-creation. The intended approach includes:

   1. implementing the industrial strategy in partnership with business: including an increase in the use of “blended finance” and improvements to the way in which grant programmes operate;

   2. leveraging UKGov’s purchasing power through public procurement: ensuring procurement supports IS-8; opening up contract award processes to firms who will boost British jobs; encouraging spend on innovation; bringing together digital and commercial expertise to open up opportunities for small business;

   3. designing government support schemes to leverage the maximum possible contribution from the private sector: incentivizing high quality job creation

   4. transforming government into a stronger, and more agile state: through, for example, a permanent Industrial Strategy Council in order to support traditional firms who are adapting as well as disruptors and new entrants; 

   5. working closely with local authorities to exploit the potential of the regions – see pillar 2 above

   6. working closely with unions and organisations to bring meaningful change to workers and communities – deepening the collaboration with the Impact Economy and with businesses who have a social purpose;

   7. monitoring and evaluating the ongoing success of the industry strategy: to be overseen by an Industrial Strategy Advisory Council who will undertake timescale scrutiny of the strategy and enable course correction as required;

   8. maintaining momentum and focusing on the long term: through hosting regular summits bringing investors and industry together. 

While an exciting set of measures, opportunity comes with complexity. Businesses and authorities alike must be prepared to embrace this new approach. This will include ensuring that contracts are agile, IP is protected but capable of being monetised, and compliance is monitored throughout. Having the ability to embrace (or provide) investment and making your organisation attractive for this purpose is likely to be a strategy goal in the coming years

At Hill Dickinson, we’re well placed to advise clients on how to align with this strategy. Whether through investment in new technology, preparing for future investment, ensuring that your business is scaleable or expanding into new markets

If you would like to assist with any of the sector specific publications to come, please do get in touch.

While UK government has presented a bold strategy, the next step is to deliver on those ambitions. However, it is incumbent on businesses to embrace those opportunities.

Let us help you prepare to be the next “superstar” firm in your sector.