Reflections on the long-awaited UK Industrial Strategy 2025

The UK Government finally published its “Modern Industrial Strategy” yesterday (23 June 2025). Clearly a lot of effort has gone into this strategy. The document is well written, clearly structured, and offers commendable clarity and detail on the ‘interventions’ the government is proposing. In addition, the government appears to have taken its consultation exercise seriously and listened in particular to the voice of business, but also other stakeholders1.

The strategy has been long heralded, much anticipated, and since the General Election of a year ago, many a commentator has argued that an Industrial Strategy for the UK is much needed. Curiously, however, so far there has been very little initial discussion of the IS in the news / media. In part this is no doubt because of major events such as the conflict with Iran dominating the headlines, but in part probably because the strategy is long at just short of 160 pages and it takes a while to digest.

The Industrial Strategy is ambitious which is laudable. There is also much in this strategy that, on the face of it, we have seen before, and this applies to objectives as well as to the tools to achieve them and the sectors which are being focussed on.

Objectives: The main goal of the Industrial Strategy is clearly economic growth, through trade, investment, and improving skills and infrastructure, while at the same time recognising the importance of issues such as net zero, sustainability, supply chain resilience / security and the regional distribution of economic activity.

Tools: These encompass inter alia finance, business information and support, trade agreements, UK Export Finance and export promotion, public procurement, investment screening, regulatory reform, planning reform, support for collaboration between industry and researchers, coordination with regard to technology adoption and AI, improved use and provision of data, support for skill based education and training.

Sectors: There are eight core sectors (the IS-8) which are: advanced manufacturing, clean energy, creative industries, digital and technologies, financial services, defence, life sciences and professional business services. In addition, there is explicit mention of what are termed ‘foundational’ industries which are considered as important back bone and suppliers to the UK economy. These are: electricity, ports, composites, materials, construction, steel, critical minerals, and chemicals. Most of these have been identified in previous government documents and strategies such as the Catapult Network, the Industrial Strategy (2017), or the Advanced Manufacturing Plan (2023).

While much of this we have seen before, there are five aspects that are arguably ‘different’ and are to be welcomed in this document.

1. There is a clear tone and message across the document that is captured by the aim to achieve “strong, secure and sustainable economic growth to boost living standards for working people in every part of the UK”. Hence, growth is ultimately the objective, but this is grounded in notions of security, sustainability, stability, and equity. The focus on stability can also be seen across a range of statements and speeches by ministers since the General Election. The strong message from the government is that they aim to provide more certainty, longer-term planning, and stability while recognising the challenge of economic security.

2. There is a clear recognition of the context in which the strategy is written: this includes stubborn domestic growth context and the rapidly evolving international context. Hence, domestically this challenge is to address low growth and investment. Internationally this is an explicit recognition of the much more difficult geo-political, and economically interventionist environment, as well as the recognition of the fast pace of technological change.

3. The Industrial Strategy is clear on identifying the existing obstacles or constraints to achieving its objectives, and by and large the government has got these right: energy costs, access to finance and investment, the lack of long-term planning and support, skills, infrastructure, planning regulations and broader regulatory costs and burdens. There is also recognition of the importance of data and evidence both for good policy making but also for businesses.

4. The government has been up-front regarding the principles and means of achieving its objectives. This explicitly involves a more interventionist approach and a readiness to intervene where it is needed (“a more muscular approach to government”; “industries… need the state to be an active partner”). The approach is also explicitly more long term, in particular, with regarding to funding designed to give firms greater incentives and greater stability. There is also recognition of the role of international trade as “the best route to prosperity”, and the importance of the rules based international trading system.

5. There is a clear attempt at considerably more joined up thinking with regard to the objectives (investment, skills, trade) and the implementation across the sectors of the economy. That joined up thinking applies both across government departments, but also reflects a desire to work much more closely with businesses and stakeholders and with more of a focus on institution building . Previously, there were various government strategies ranging from batteries, digital, advance manufacturing, critical imports etc, all written at different times, by different departments and different people. Bringing it together into one document and a focused strategy is more likely to achieve coherence and the desired positive outcomes.

Has the government got it all right with this Industrial Strategy? Almost certainly not, and surely and rightly there will be specialists and experts who will argue the toss over specific issues, policies or recommendations; or about how monitoring and evaluation of success will be undertaken; whether taking a sectorally-focused approach is the right way to go; and whether sufficient (new) money has been allocated. Such discussions are to be welcomed and are healthy. The presence of the Industrial Strategy gives a much clearer basis for such discussions.

It is a mistake to think that governments can get it all right and that such a document can be definitive. It is also a mistake to think that that governments should not make mistakes. There is naturally an in-built aversion to failure in government policymaking, and this is for both good and bad reasons. Governments should be prepared to make mistakes and to fail in some initiatives. On that note, the Foreword to the document states that the government’s approach is one that is ‘prepared to take punts in pursuit of growth and productivity’. This is a healthy approach. In taking a punt you are prepared to take risks.

At the end of the day, it is relatively easy to write ambitious statements and to promise to achieve growth, stability, sustainability, and inclusiveness. Only time will tell whether the government will be successful, and much will depend on how focused it can be on the Industrial Strategy and achieving the desired coherence in policy choices. The Industrial Strategy is an important step. We now await with equal anticipation the forthcoming Trade Strategy which is intended to complement the industrial strategy and outline the governments approach to its external economic relations.