On June 23rd, the Department for Science, Innovation and Technology revealed the Digital and Technologies Sector Strategy, outlining the government’s industrial strategy for high-growth tech, digital infrastructure, and advanced innovation over the next decade.
As part of the broader Industrial Strategy portfolio, the sector strategy focuses on the UK’s ambition to become one of the world’s top three leading locations for digital growth and technological development.
D&T Sector Strategy: Goals and economic significance
The Digital and Technologies Sector Strategy revolves around the strategic goal for the UK to become the third-largest destination for tech investment globally after the US and China by 2035, effectively transforming Britain into a digital superpower.
Currently, the British digital and tech sector contribute approximately £207 billion in gross value added (GVA) to the economy, whilst supporting over 2.6 million jobs, and maintaining productivity levels 19 per cent higher than the national average.
As a result of the D&TSP, sector GVA contributions are forecast to increase by £90 billion, creating 500,000 jobs by 2035, to enhance regional development and international competitiveness.
The six policy pillars of the sector strategy
The sector strategy is structured around six key areas of intervention: Research and development, access to finance, skills and workforce, infrastructure, regulation, and international engagement.
1. Public research and development investment
Public R&D investment is primed to increase to £22.6 billion annually by 2029/30. In addition, the government aims to leverage £3 of private investment for every £1 of public funding, although the means by which this will be achieved haven’t been explicitly revealed.
Agencies such as UKRI and ARIA are expected to play central roles in funding early-stage and breakthrough technologies, with ARIA, the Advanced Research and Invention Agency, leading projects in fields such as AI computers and hardware.
2. Finance and investment access
The British Business Bank will expand its support for tech-focused companies, increasing overall investment capacity to £25.6 billion.
A new £4 billion Industrial Strategy Growth Capital fund will be launched, aiming to generate an additional £12 billion of private investment.
Pension market reforms and targeted co-investment initiatives are hoped to provide longer-term capital to emerging tech companies.
3. Skills and workforce development
A new national programme, TechFirst, will be introduced with £187 million in funding, focusing around bursaries, outreach, apprenticeships, and fellowships to develop a skilled workforce in AI, data science, and other high-growth areas.
Additionally, visa pathways for international talent will be expanded, including the Global Talent and High Potential Individual visas.
4. Infrastructure expansion
In regards to infrastructure expansion, the D&TSP also pledges £1 billion in investment to exponentially expand AI computer capacites.
Culham in Oxfordshire will serve as the UK’s first AI Growth Zone, whilst planning reforms and a Connections Accelerator Service have been announced to facilitate faster development of essential infrastructure, including data centres and gigabit broadband networks.
5. Regulatory innovation
A new Regulatory Innovation Office will be launched to coordinate pro-innovation regulatory approaches. The government will expand regulatory sandboxes to support AI, engineering biology, and digital markets. A digital standards strategy will also be developed to facilitate safe data interoperability.
6. Global partnerships and strategic cooperation
International engagement includes renewed participation in Horizon Europe, strategic alignment through AUKUS, and technology-focused trade partnerships with countries such as Japan and Singapore.
The Ministry of Defence has committed to allocating 10 per cent of its equipment budget to advanced technologies, including dual-use systems.
Priority technologies
In addition, the plan identifies six frontier technologies for focused investment:
- Artificial intelligence: AI Growth Zones, data access reform, and large-scale computer infrastructure.
- Advanced connectivity: 6G, satellite communications, and secure networks.
- Cyber security: Focus on post-quantum cryptography and national cyber defence.
- Engineering biology: Development of bio-manufacturing infrastructure and regulatory frameworks.
- Quantum technologies: Support for commercialisation in sectors such as healthcare and finance.
- Semiconductors: Strengthening of domestic R&D, supply chain resilience, and IP protection.
Final thought
Whilst the sector strategy certainly does articulate clear targets and investment plans, delivery remains contingent on effective implementation. Arguably, the D&TS Plan lacks enhanced regional funding mechanisms, stronger educational pipelines in secondary and further education and clearer ethical guidelines for AI and biotechnology use.
Overall, however, the government has committed to working with devolved administrations, industry stakeholders, and international partners to ensure that the sector strategy delivers long-term economic, technological, and societal benefits.
