UK Industrial Strategy Sector Plans | Digital and Technologies

“Leverage government R&D investment to significantly increase private investment and to generate £3 of private R&D investment for every £1 of targeted public R&D investment in the sector by 2035”.

Continue to commit to R&D tax reliefs by “strengthening the administration of R&D reliefs to reduce the unacceptable levels of error and fraud and provide greater certainty and predictability to genuine claimants”, though this language gives the impression that these reliefs may become harder to obtain. However, Innovate UK rules will be altered “to allow R&D grants and loans to be used to purchase specialist equipment”.

The British Business Bank (BBB) will continue to scale-up, committing “an additional £4 billion of Industrial Strategy Growth Capital”, expected to bring in £12 billion of private sector capital. BBB will also “double its investment in new fund managers” to back the key sectors across the Industrial Strategy.

The Science and Technology Venture Capital Fellowship scheme will be continued, to support and encourage “mid-career venture capital professionals to invest in digital and technology businesses”.

BBB and the Intellectual Property Office will explore how to best support lending to IP-rich firms and encourage new IP-backed lending products. A new working group looking at barriers to lending for IP-rich businesses will publish an update and next steps by the end of 2025.

Investment in AI and digital infrastructure, including “£1 billion to expand our AI compute capacity by a factor of at least 20”. Reforms to speed up grid connections and planning (e.g. £1.8 billion for gigabit-capable broadband).

A new Connections Accelerator Service will enhance support for projects “that guarantee high-quality jobs and bring the greatest economic value”, potentially allowing some large-scale developments to jump the queue for connections.

The newly launched Regulatory Innovation Office is to address regulatory barriers, including the exploration of regulatory frameworks for data sharing and AI (e.g. regulatory sandboxes for the use of AI within a medical device product).

Regulation of nuclear power is also highlighted as in need of reform, with the Government hoping to “support the delivery of new nuclear technologies such as small and advanced modular reactors”.

Four-year targeted research program with “initially £240 million of funding” for ACT development, aiming to connect industry and academia to increase commercialisation, with defence and satellites specifically mentioned.

Strengthening lab infrastructure with “initial £130 million”.

Implement all 50 recommendations from the recent AI Opportunities Action Plan, backed by “over £2 billion” in funding.

Establish AI Growth Zones to “unlock investment in AI-enabled data centres”, primarily by improving planning rules and access to power.

Expand UK’s AI Research Resource capacity by “at least 20 times by 2030” with £1 billion investment (plus a further £750 million for the development of a new supercomputer in Edinburgh).

A detailed economic impact assessment to be published on the UK’s AI and copyright framework, recognising the need to balance the protection and interests of rightsholders against the need for AI developers to benefit from access to creative material. Although there are no clear plans on this at the moment, the Government clearly recognise this as a difficult topic (and is one we’ll be watching closely).

New National Cyber Innovation Centre in Cheltenham to “foster collaboration between business, government, and academia”, intended to “catalyse the creation of ambitious, world-leading cyber companies and attract an additional £1 billion of investment”.

£6 million of funding for the Cyber Runway Accelerator “to support 60 start-ups annuals across all growth stages”.

Publishing a Cyber Growth Action Plan in summer 2025 (not yet released at time of writing).

“Initial £196 million for a National Engineering Biology Programme” for R&D.

“Initial £184 million for an Engineering Biology Scale-up Infrastructure Programme”, intended to enhance manufacturing capabilities.

Building additional “networks of researchers, innovators and larger companies” (e.g. the UKRI Engineering Biology Innovation Network) to encourage innovation and enhance support for those in the sector.

Progressing five National Quantum Missions, which include quantum navigation systems, critical national infrastructure and benefits to NHD trusts. This also includes “£670 million to drive the development and adoption of quantum computers” hoped to be “capable of significantly outperforming supercomputers by 2035”.

10-year funding commitment for the UK’s flagship National Quantum Computing Centre.

Establishing a new UK Semiconductor Centre, with “up to £19 million” to support long term R&D and roadmaps for the future.

£25 million to launch two new Innovation and Knowledge Centres “to help bring chip technologies to market”.

Providing a “£35 million UK-wide skills programme” including semiconductor bursaries, to help build deep technical expertise across the country.