The UK Government has revealed its Modern Industrial Strategy, which includes a raft of sweeping reforms that seek to make the UK a global powerhouse for creating, investing in, and scaling fast-growing technology businesses – all within the next decade, no less.

The plan, targeting 2035, includes the bold ambition of securing the UK’s first trillion-dollar technology business and significantly boosting the sector’s contribution to the economy, security, and opportunity nationwide.

The Strategy is broken down into five ‘sector plans’ (Advanced Manufacturing, Clean Energy Industries, Creative Industries, Professional and Business Services, as well as Digital and Technologies.)

In a two-part feature we’re going to take a deep dive into the Digital and Technology sector plan and break down the strategy through the lens’ of business and technology.

So, what does the strategy mean for businesses?

Harnessing the Tech Revolution

The strategy underscores the Digital and Technologies sector’s critical current and future role. Valued at nearly £1 trillion, the UK boasts the third most valuable tech ecosystem globally and the most valuable in Europe – a ninefold increase over the past decade.

Beyond this, the sector has created over 185 unicorns (startups valued over $1 billion) and ranks third globally for VC investment.

The plan commits to a coordinated, cross-government effort aligned with the Science and Technology Framework, focusing on six interdependent pillars:

1 – Boosting R&D Investment

The UK is aiming to unlock a surge in private sector R&D through record-breaking public investment, targeting £3 of private R&D for every £1 of public funding by 2035. Annual public R&D investment will rise to £22.6 billion by 2029/30.

To enable this, the Government will establish 10-year budgets for major institutions such as the National Quantum Computing Centre, and channel Spending Review resources into priority frontier technologies (more on those in the second part). Infrastructure investment and UKRI funding route reforms will make it easier for businesses to scale and access support.

Alongside this, continued R&D tax relief will support an anticipated £56 billion of business-led R&D by 2029/30, with improvements to streamline delivery.

2 – Increasing Access to Finance

To tackle investment barriers in the UK tech and innovation sectors, a range of financing reforms are being introduced.

The British Business Bank will commit an additional £4 billion in Industrial Strategy Growth Capital, aiming to leverage £12 billion in private funding across eight growth-driving sectors. Overall, the BBB’s yearly investments will rise by two-thirds, reaching a total capacity of £25.6 billion.

Investment in new fund managers will double, with direct investments of up to £60 million for strategically important firms. The National Security Strategic Investment Fund will provide up to £330 million for dual-use tech businesses.

Complementary reforms include public markets and pensions reform — with the Mansion House Accord aiming for £25 billion in additional private market investment by 2030 — and strengthened export and SME support via UK Export Finance, targeting 1,000+ SMEs annually by 2029. A new working group will also tackle lending challenges faced by IP-rich SMEs.

3 – Creating a Skilled Workforce

To address critical skills shortages, the Government will overhaul the UK’s talent pipeline. Reforms to the skills system will include enhancements to the High Value Courses Premium, Strategic Priorities Grant, and Adult Skills Fund, alongside Growth and Skills Levy-funded short courses in digital, AI and engineering.

New initiatives include TechFirst and Spärck AI scholarships, and the expansion of the Turing AI Fellowships, covering both Pioneer and Global tracks.

Beyond this, an industry partnership with BT, Google, and Amazon aims to equip 7.5 million UK workers with AI skills by 2030. To attract global talent, the Government will explore High Potential Individual visa expansion, improve access under the Global Talent visa, review the Innovator Founder route, and launch a Global Talent Taskforce and Fund. Skills England will provide in-depth sectoral analyses and co-develop solutions with employers.

4 – Enhancing Infrastructure

The Government is investing heavily in digital and physical infrastructure to power future growth in fields like AI and quantum. This includes £1 billion to expand national AI compute capacity by at least 20x, with a long-term strategy due in 2025, and the establishment of AI Growth Zones, starting with Culham, Oxfordshire.

Connectivity will be boosted through £1.8 billion invested in gigabit broadband and expanded 5G coverage. Electricity grid delays are being addressed by launching the Connections Accelerator Service by end-2025 and deprioritising 500GW of stalled capacity, supported by Ofgem reforms.

Planning reforms will further streamline delivery, including a new Planning and Infrastructure Bill that will fast-track decisions on 150 key infrastructure projects. Legislative changes will also enable data centres to qualify under the Nationally Significant Infrastructure Projects regime.

5 – Delivering Pro-Innovation Regulation

The new UK innovation strategy aims to make regulation a driver, not a drag, on technological progress. A headline commitment is to cut the administrative cost of regulation by 25% before the end of this Parliament.

The Regulatory Innovation Office will lead on streamlining approvals and supporting innovation sandboxes, including a new AI Airlock for medical devices and an Engineering Biology Sandbox. The Regulatory Horizons Council will advise on proportionate risk-taking across sectors.

The AI Opportunities Action Plan’s regulatory recommendations are being implemented, and up to £12 million will be invested in UK data-sharing infrastructure from April 2026. A Digital Standards Strategy is also in development to underpin the regulatory transformation.

6 – Securing International Partnerships for Digital and Technology Growth

The UK is placing digital and technology at the centre of its international trade strategy, unlocking global opportunities through landmark agreements and focused collaborations. Free trade deals with Japan and Australia — including a precedent-setting innovation chapter — will expand market access, while partnerships with Singapore, India, and South Korea lay foundations for joint technological progress.

Strengthening academic alliances also remains a priority. Through its renewed association with Horizon Europe — the world’s largest research programme, valued at over £82 billion — UK researchers and businesses now have access to more than 95% of key funding opportunities in AI, quantum, and advanced technologies.

To support this global ambition, the UK has relaunched its diplomatic Science & Technology Network with refreshed objectives and a stronger focus on international tech partnerships. A new emphasis will be placed on dual-use technologies, national resilience, and secure supply chains, recognising that strategic cooperation is essential in an era of global tech competition.

A key milestone includes the 2024 trilateral agreement between the UK, US, and Australia under AUKUS, designed to strengthen shared security and supply chain stability.

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Looking ahead, the UK will launch the next phase of its International Science Partnerships Fund and deepen its tech engagement through a potential UK-US transatlantic technology partnership. Domestically, investment in critical supply chains will rise — with the Ministry of Defence pledging to spend at least 10% of its equipment budget on novel technologies from next year.

Speaking in the Digital & Technologies sector plan foreword, secretary of state for science, innovation & technolgy, Peter Kyle, said: “Our Digital and Technologies Sector Plan, a central part of the modern Industrial Strategy, sets out a role for the State as an active partner, boosting British businesses instead of holding them back.

“Our plan is anchored in exploiting the ideas and talent of Britain’s scientists, technologists, innovators and entrepreneurs – and strengthening our country as an investment destination for domestic and international enterprise.

“Our objective is to ensure that Britain’s economy grows significantly so that working people can enjoy the economic security they crave.”