The UK’s Modern Industrial Strategy: Charting a Decade of Ambition
By James Morton
After years of economic turbulence, sluggish productivity, and growing regional disparity, the UK government has taken a bold step with the publication of its Modern Industrial Strategy—a document billed as the most comprehensive reimagining of British industrial policy in a generation. Released by Prime Minister Keir Starmer’s administration in June 2025, the strategy sets out a ten-year vision for prosperity, resilience, and, crucially, partnership between state and industry.
Why Does the UK Need an Industrial Strategy Now?
For decades, the UK has oscillated between laissez-faire economics and piecemeal sector support. In the post-Brexit, post-pandemic world, however, the cracks in this approach have become too wide to ignore. Productivity growth has lagged behind other G7 nations, energy costs remain stubbornly high, and the uncertainty of global markets threatens to undermine the country’s competitive position. The government’s new strategy is explicit in its intent: to move from short-term reaction to long-term direction, creating what it calls a “market-shaping” state that partners with business to guide investment and innovation where they are most needed (gov.uk).
At its heart, the strategy aims to deliver high-quality, secure jobs across the nation, with a particular focus on reversing the decline of the industrial North and revitalising the UK’s status as a science and technology leader. The document repeatedly invokes the importance of “missions”—not simply as lofty rhetoric, but as concrete areas where government and business must work hand-in-glove to unlock investment, deliver skills, and drive change at pace.
The Eight Pillars of Growth: Sectors in the Spotlight
The Modern Industrial Strategy identifies eight priority sectors, known as IS-8, that together form the backbone of the government’s ambitions. These include advanced manufacturing, clean energy, life sciences, digital and technology, creative industries, defence, financial services, and professional services. Each sector is paired with bespoke policy measures and investment targets designed to unlock growth.
For example, the government has pledged to double annual investment in advanced manufacturing to £39 billion by 2035, aiming to reassert Britain’s credentials in high-value design and production. Clean energy, another pillar, is set for its own investment doubling, with a clear focus on scaling up onshore wind, solar, and green hydrogen to meet the UK’s net zero commitments. In the life sciences, the strategy promises to streamline clinical trials and attract world-leading R&D, building on the UK’s legacy of scientific innovation.
Digital and technology, perhaps the fastest-evolving of all, receives an explicit endorsement in the form of £86 billion of R&D spending over the next decade. Artificial intelligence, quantum computing, and semiconductor design are called out as national strengths, with the government promising to clear regulatory bottlenecks and ensure the UK is at the forefront of the next wave of technological revolution (thetimes.co.uk).
Creative industries and defence are also championed, with the former targeted for cluster-based investment to reach £31 billion by 2035, and the latter set to benefit from a dedicated Defence Innovation Fund. In financial and professional services, the focus shifts to regulatory reform and new trade corridors, seeking to cement the City of London’s position as a global powerhouse.
Place-Based Prosperity: Levelling Up With Substance
One of the most significant departures from past policy lies in the strategy’s place-based approach. Gone is the one-size-fits-all model of old; in its place stands a commitment to “unashamedly place-based” investment. The government’s intention is to build on local economic clusters—whether in Teesside’s hydrogen sector, Cambridge’s biotech, or Manchester’s creative industries—by providing targeted funding, skills initiatives, and infrastructure upgrades.
This approach is supported by significant new financial instruments. A £600 million Strategic Sites Accelerator will unlock high-potential brownfield and industrial sites, while a £500 million Mayoral Recyclable Growth Fund will empower metro mayors, especially across the Midlands and North, to back local priorities. Local authorities and combined authorities are expected to play a leading role, matching their own cluster strengths to the wider national missions. It is a marked shift towards empowering regions, rather than simply dictating from Whitehall (cbi.org.uk).
Tackling Costs: Energy as a National Priority
High industrial energy costs have long been cited as a drag on British competitiveness, and the strategy addresses this challenge head-on. The British Industrial Competitiveness Scheme is poised to lower electricity prices for thousands of energy-intensive firms, while support for corporate power purchase agreements and grid connection reforms are designed to encourage the adoption of clean electrification. The ambition is clear: Britain must become a place where manufacturers and innovators can thrive without being crippled by energy costs.
However, the strategy does not shy away from the realities of infrastructure. Network capacity, especially for renewable energy and electric vehicle roll-out, will require major upgrades. The government’s new National Infrastructure and Service Transformation Authority (NISTA) is tasked with overseeing this challenge, ensuring delivery aligns with strategic intent (ft.com).
Catalysing Investment and Driving Innovation
Recognising that public investment alone cannot achieve its ambitions, the strategy places a premium on catalysing private finance. The National Wealth Fund, alongside the British Business Bank, will be used to “crowd in” private capital, particularly in areas of the economy where risk has previously deterred investment. Long-term certainty, both in terms of government policy and regulatory environment, is presented as the key to unlocking this private sector firepower.
The scale of the commitment is impressive: £86 billion in public R&D investment over ten years, with targeted missions in AI, clean energy, and life sciences. Alongside this, £725 billion has been earmarked for infrastructure investment, supporting not only new projects but also the modernisation of existing networks.
Modernising Regulation and Trade
A further strand of the strategy is the promise to modernise the regulatory and trade environment. The government is acutely aware that Britain’s global competitors are moving quickly to attract investment, streamline approvals, and secure critical supply chains. Deregulation is pledged in areas such as AI governance, pensions, and capital markets, whilst a new UK Carbon Border Adjustment Mechanism is set to be implemented by 2027 to maintain competitiveness as the country moves to net zero.
On trade, the strategy is outward-looking. It commits to new international trade corridors, a renewed focus on export support, and the establishment of an “office for investment” to serve as a concierge for global investors.
Skills and Social Value: Building for the Long Term
No industrial strategy can succeed without a skilled and motivated workforce. To that end, the document sets out plans to expand technical colleges, create new pathways into apprenticeships, and establish skills hubs in high-growth sectors. The government also places an emphasis on diversity, inclusion, and fair work, with collaboration from trade unions and regional leaders to ensure that the benefits of growth are widely shared.
There is a recognition that industrial policy is not just about economic output, but also about social value—creating not just more jobs, but better jobs, and ensuring that the country’s prosperity is both sustainable and inclusive.
Promise, Peril and the Path Ahead
In sum, the Modern Industrial Strategy represents a bold attempt to reset the terms of British economic debate. Its strengths are clear: an integrated vision linking finance, infrastructure, energy, skills, and regional growth. The scale of ambition, both in terms of investment and desired outcomes, sets a high bar.
Yet as with any grand vision, the challenge will be in the delivery. There is a risk that governance structures become mired in bureaucracy, or that sector-specific plans remain vague. Certain parts of the economy—most notably hospitality and retail—feel under-served by the sectoral focus. And while the strategy’s “missions” are ambitious, they must be matched by rigorous execution and genuine collaboration across government, business, and civil society.
Crucially, the strategy includes robust accountability mechanisms, including a 16-member independent oversight council and regular Parliamentary review. Transparency, measurable targets, and local empowerment will be vital if the strategy is to avoid the fate of past initiatives that promised much but delivered little (theguardian.com).
Conclusion: A New Chapter for British Industry?
The Modern Industrial Strategy signals a departure from decades of drift and short-termism, offering instead a long-term partnership between state and business. If it delivers on its promise—by unlocking investment, empowering regions, modernising infrastructure, and placing skills at the heart of growth—it may yet mark a turning point for the UK’s economic fortunes.
However, as history has shown, the success of any strategy will be judged not by its intentions, but by its outcomes. The coming years will reveal whether this new approach truly delivers a more prosperous, resilient, and inclusive Britain—or simply joins the long list of well-meaning plans that fell short of their mark.
References:
UK Government. (2025). Invest 2035: The UK’s Modern Industrial Strategy. gov.uk
The Times. (2025). Keir Starmer unveils targeted, long-term industrial strategy. thetimes.co.uk
CBI. (2025). CBI Analysis: The Modern Industrial Strategy. cbi.org.uk
The Guardian. (2025). UK industrial strategy: the key points and what’s missing. theguardian.com
Financial Times. (2025). The industrial strategy will provide certainty for business. ft.com