The plan focuses on eight sectors including advanced manufacturing, clean energy, creative industries, defence, digital and tech, financial services and professional and business services.
Each sector has its own 10 year plan to bring in investment, grow businesses and create jobs.
Over 5,500 small and medium-sized businesses will be supported in adopting new technology through the Made Smarter programme, with help brought together under the Business Growth Service.
Research and development (R&D) funding will rise to £22.6 billion a year by 2029–30 to boost innovation, including over £2 billion for AI and £2.8 billion for advanced manufacturing over the next decade.
As a result of the strategy, electricity costs for energy-heavy manufacturers in these sectors could drop by up to 25% from 2027, helping more than 7,000 businesses.
Prime Minister Keir Starmer, said: “This Industrial Strategy marks a turning point for Britain’s economy and a clear break from the short-termism and sticking plasters of the past.
“In an era of global economic instability, it delivers the long term certainty and direction British businesses need to invest, innovate and create good jobs that put more money in people’s pockets as part of the plan for change.
“This is how we power Britain’s future - by backing the sectors where we lead, removing the barriers that hold us back, and setting out a clear path to build a stronger economy that works for working people. Our message is clear - Britain is back and open for business.”
Commenting on the strategy, Cisco UK&I CEO, Sarah Walker, welcomed the launch. She said: “Having collaborated closely with the Government on its development, the urgency now lies in expediting its deployment. Technology will play a pivotal role in its success.
“As well as being one of the eight growth driving sectors, the role of technology will be key across the board, and also offers an opportunity to scale the Government’s AI Action Plan both across industry and regionally in the UK.”
This comes as, according to Cisco’s latest UK AI Readiness Index, only 10% of UK organisations are fully prepared to harness AI’s potential. Meanwhile, 86% believe they have 18 months or less to implement an AI strategy before suffering significant negative business impacts.
“AI adoption and implementation is primarily a people challenge,” Walker added. “From traditional IT roles to marketing and supply chain management, almost every job will require AI literacy in the very near future. We need to ensure up-skilling is addressed with equality, to avoid exacerbating economic gaps that already exist across demographics and regions.”
Mark Boost, CEO of Civo added: “The ambition in this Industrial Strategy is exactly what the UK tech industry has been asking for: long-term thinking, real investment in AI, and a clear commitment to economic leadership through innovation. But we’ve been here before. Promises on sovereignty ring hollow when billions still go to overseas cloud giants while British providers are overlooked.
“The Sovereign AI Programme is a clear signal of intent, but sovereignty can’t stop at the application layer. We also need to control the hardware on which the software is running.
“The Strategy rightly reinforces the UK’s goal of owning and scaling domestic AI capabilities, but that goal is undermined if the platforms supporting them remain in the hands of hyperscalers governed by foreign laws, including the US CLOUD Act. True digital sovereignty means building and scaling on UK-owned infrastructure, not just developing models locally.”
Phillip Kaye, co-founder and director at Manchester-based data centre specialist Vespertec, continued: “Semiconductors get a passing mention in this morning’s soft-launch of the Industrial Strategy, but they might be the key to its success.
“If the next industrial revolution is going to come in the form of AI factories, then UK businesses need access to the most advanced hardware possible to ensure they’re not left behind. Semiconductor materials are the bedrock of all modern computing, from GPUs to CPUs, and the UK’s universities and research institutions have long led the charge in their development.
“Boosting funding for this research in universities across the UK, starting with Wales, might well be the secret ingredient that keeps the UK running shoulder to shoulder with tech giants in the US, Taiwan and China. Here’s hoping the Industrial Strategy, when published in full, reflects that.”
Meanwhile, Chris Knight, VP of automotive at NTT DATA UK&I continued: "Initiatives like AI Growth Zones and advanced manufacturing clusters will help make next generation supply chains a reality. They give us the tools to address chronic weak points in UK supply chains. UK firms often have digital islands inside plants that don’t link to procurement, logistics, or suppliers.
"From delayed components to unreliable forecasting, manufacturers have operated with limited visibility for too long. By embedding digital infrastructure where it's most needed, these initiatives lay the groundwork for a faster, more adaptive, and data-led supply chain system."
Pulsant CEO Rob Coupland stated: " These efforts are promising, reflecting an awareness that energy constraints could severely hinder the growth of the UK’s AI industry. However, there are signs that the current approach lacks a nationwide perspective.
"We are witnessing significant hype around AI, much like what we saw with cloud computing a decade ago. While it's encouraging to see policymakers engaging with the topic, there's a risk that rushed regulation could inadvertently hinder genuine economic growth by creating unnecessary barriers—especially when other, potentially more impactful actions might be available.
"And a key question remains: will the recommendations of the AI Energy Council be effectively integrated with the proposed AI growth zones? If not, there’s a danger of fragmentation—and of perpetuating a London-centric strategy that fails to reflect the diversity of the UK’s AI ecosystem."
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