There has been a flurry of government strategies published in the last few months with the latest being the Industrial Strategy. The objective of this ten-year plan is to increase business investment and develop the industries of the future in the UK.

With the first projects under the strategy expected to launch in the autumn, what do you need to do next?

Priority sectors

The strategy will support eight key sectors that have been identified as the most likely to drive future growth by raising investment and productivity:

  1. Advanced manufacturing
  2. Clean energy industries
  3. Creative industries
  4. Defence
  5. Digital and technologies
  6. Financial services
  7. Life sciences
  8. Professional and business services

These sectors are all underpinned by individual plans that have been developed in conjunction with businesses that sit in the eight priority sectors as part of the Invest 2035 consultation held in late 2024. With commitments from both government and industry based around shared priorities, they set out the vision of the sector’s transformation by 2035, providing a roadmap for businesses to rise to the occasion with more investment in skills, technology, supply chains and other essential enablers of growth.

Advanced manufacturing sector plan

The advanced manufacturing sector in the UK is one of the most innovative in the world, leading the way with decarbonisation, the AI revolution, and increasing global focus on economic resilience. There are several opportunities for companies who are at the forefront as well as those who are fastest to commercialise the latest innovations. However, the sector is also particularly exposed in an era of escalating security threats, protectionism, technological rivalry and energy volatility.

The government’s vision is for the sector to be one that investors want to grow and invest in. To achieve this, they will aim to double the investment in the sector from £21 billion to £39 billion by 2025 and focus on prioritising manufacturing industries with the greatest potential, including automotive, batteries and aerospace.

To ensure the sector plans are successful, several interventions will be implemented such as:

  • Committing up to £4.3 billion in funding for the advanced manufacturing sector, including up to £2.8 billion in research and development (R&D) funding over the next five years
  • Reduce electricity costs for the energy intensive manufacturers by increasing discounts through the British Industry Supercharger and creating a new British Industrial Competitiveness Scheme for specific manufacturing industries
  • Build the sector’s skills base through wider reforms to the skills system in England and by launching a new Upskilling and Reskilling Programme specific to advanced manufacturing businesses, which will address the need for short courses for the workforce.

 

The government is to be congratulated on its Industrial Strategy which manages to be comprehensive, targeted and sets out a clear roadmap for the revitalisation of the UK. Now comes the hard part, delivering real and meaningful change to many aspects of the UK’s industrial and manufacturing landscape. As was the theme of this year’s British Chambers of Commerce Global Annual Conference ‘Where’s the Growth?’, the government and private sector as partners need to ensure the strategic targets and actions become reality. This includes addressing the chronic under-investment in the UK which has us compare poorly to the rest of the G7, addressing the skills shortfall in all areas and at all levels and ensuring that the Whitehall issued strategy is owned and effectively implemented at the local level.

The strategy is an excellent foundation on which to build, and we look forward to working with the government and our clients to make sure the UK is, and remains, a global leader for advanced technology and manufacturing.”

Ray Chisnall, Global Head of Industrial, Manufacturing and Logistics at Gleeds

Life sciences sector plan

The UK has seen a degradation in our manufacturing capability, lack of confidence in our economic strategies and an overall lethargy to support investment both institutionally and via foreign direct investment (FDIs). To tackle these and many other challenges within this sector, the government has set out a huge vision for the life sciences industry. By 2030 its ambition is for the UK to be the leading life sciences economy in Europe; and by 2035, the third most important life sciences economically globally after the UK and China.

Historically, the industry has performed reasonably well with contribution to the UK’s international reputation. It plays a unique role in the economy, raising productivity and supporting exceptionally valuable jobs while also boosting growth indirectly by improving the health of the population. For example, the UK was the first country to license and deploy a vaccination program during the global COVID-19 outbreak. However, we are now starting to see a significant pause in our clients’ investments in response to the Tariff agenda in the US. In the future we need to be able to minimise any impacts and maximise any opportunities that arise from this situation. 
To achieve their ambitions, the government is reforming the business, regulatory, and public finance landscape for the sector across three pillars:

  • Enable worldclass R&D 

    Over £2 billion in government funding across this spending review period is being channelled into life sciences R&D, including £650 million for Genomics England, £354 million for the Our Future Health Programme, and £20 million for the UK BioBank. This will accelerate breakthroughs in genomics, personalised medicine, and population health.

  • Make the UK an outstanding place to start, grow, scale and invest

    This is a critical area of the strategy as the UK has seen a significant reduction in its global competitiveness to attract investment and retain both talent and innovative companies. It sets out a clear plan to develop a robust business environment through initiatives such as the Life Sciences Innovative Manufacturing Fund (LMISF) and the British Business Bank (BBB) funds to pull in investment domestically and from FDIs that can support start-up organisations through to large-scale pharmaceutical companies.

  • Driving health innovation and NHS reform

    Creating reforms and regulatory change across the NHS will create a pathway for innovation, ensuring patients have access to the best clinical and cost-effective treatments. Combined with a host of other key reforms, these have the potential to generate significant improvements to both economic and patient outcomes.

These reforms, initiatives and strategies are very welcome and have the potential to have a major impact across the eight priority sectors, particularly life sciences. They have been well thought out, structured and with key targets, outcomes and measurable criteria provided. We will be able to hold to account those responsible for managing the success of the strategy. 

The targets are ambitious and rightly so, although I still don’t feel they go far enough. Tax reforms and further incentives are still required to trigger major investment into both our manufacturing sector and early biotech startups. This would allow them to scale from discovery to manufacturing rather than corporate taxation caps and increased national insurance employer contributions. However, I do think we will start to see the fruits of this long-term strategy begin to materialise over the coming months, specifically with the freeports and enterprise zones.

Tony Morrice, Director of Life Sciences UK and Ireland at Gleeds

Importance of place

As the plan for life sciences reflects, the overall industrial strategy will be focused on realising the potential of cities, regions and clusters, such as the establishment of enterprise and freeport zones, which have the greatest potential for growth of the eight sectors. This rebalance of the economy will ensure that areas of the country that are heavily reliant on foundational industries like steel and ports which supply critical materials, parts, and infrastructure – will also receive funding and development whereas historically it would have been more likely to go to London or the southeast.

Next steps

The publication of the industrial strategy is only the starting point. The level of change, growth and investment involved in its execution is huge. Companies must now reflect on what it means for their own businesses and how they can begin to align with the interventions that are planned in their corresponding sector. 
This means:

  • Engaging early with local and regional authorities to understand devolved funding streams and partnership opportunities
  • Reviewing delivery models to ensure they are scalable, resilient, and capable of handling concurrent programmes - especially in regions expecting a surge in activity
  • Strengthening governance and assurance frameworks to meet the expectations of the UK government
  • Investing in digital tools and data maturity to enable more productive, efficient delivery and improve forecasting, risk management, and performance reporting
  • Preparing for procurement agility - as funding certainty increases, so too will the pace of procurement cycles and the need for rapid mobilisation.

At Gleeds we have a long history of working with clients in several of the eight priority sectors, including advanced manufacturing, life sciences, defence, digital and energy. We can advise you on how you can play your part in delivering the industries of the future.