Digital technologies have driven immense transformation across industries over the past decade and now constitute a critical fundamental to improving the UK’s economic performance. Beyond the technology sector itself, the Government’s Invest 2035 Green Paper rightly calls for the integration of digital technologies, data, and innovation across key growth-driving sectors to power future industrial success.

The role of digital technologies

Invest 2035 correctly identifies digital technologies as a critical growth sector and whilst manufacturing, energy, and infrastructure remain essential pillars, it is digital technologies that increasingly act as the thread weaving them together. Initiatives such as the AI Opportunities Action Plan, increased investment in data centres, and efforts to commercialise emerging technologies are all strong indicators of the Government’s commitment to improving the UK’s data and digital capabilities. However, delivering on these ambitions will require a sustained focus on the key policy areas identified.

Realising the Industrial Strategy through the lens of digital technologies

People and skills: Realising the Industrial Strategy will heavily depend on ensuring that the workforce is equipped with necessary digital skills. The Government estimates that the current digital skills gap costs the UK economy £63 billion annually. As businesses adapt to technological transformation, it is critical that the workforce – present and future – understands and can leverage digital technologies to enhance the global competitiveness of Britain’s key growth-driving sectors.

Innovation: The AI Opportunities Action Plan outlines important steps to harness the potential of artificial intelligence, but further action is needed. The UK benefits from world-leading universities, a tech ecosystem valued at over $1 trillion, and pioneering research institutions. The Industrial Strategy must foster an ecosystem that rewards risk-taking, supports scale-ups, and strengthens collaboration between academia, industry, and government. Investment in research and development, along with policies that make innovation easier to pursue within the UK, will be crucial.

Data: The transformative potential of data is widely recognised. The Government understands that data fuels modern business, and there is an immense opportunity to leverage it more effectively. Both businesses and individuals stand to benefit — from enhancing public-private partnerships to driving innovation that tackles major societal challenges. Building a data-driven economy must be a central part of the Industrial Strategy.

Digital technologies and innovation have long been recognised as key drivers of the UK’s economic growth. Embedding them into the Industrial Strategy is not optional but essential. Policy Connect will continue to work with the Government to ensure that digital innovation helps realise the full ambition of the Strategy — securing a resilient, prosperous future for the UK.