Industrial strategy in the UK

Industrial strategies provide an overarching plan for the economy (or key parts of it) that aims to help the government achieve economic, social and/or environmental goals. However, there are many definitions and a spectrum of approaches to the degree and types of government interventions used.

This briefing summarises the government’s 2025 industrial strategy and explains key concepts in industrial strategy theory. It also sketches the international context and includes a brief overview of industrial policy in the UK over the last few decades.

The UK’s Modern Industrial Strategy

In June 2025, the government published The UK’s Modern Industrial Strategy, a strategy setting out a 10-year plan to boost investment, productivity and resilience across the economy. The strategy builds on the Invest 2035 green paper and forms part of the government’s mission to achieve the highest rate of sustainable economic growth in the G7.

The government describes the strategy as a “whole-of-government effort”, with the state taking a more active role in supporting businesses. It aims to boost business investment in eight sectors it has identified as having the highest potential, which the government refers to as the IS-8.

The strategy includes commitments to:

• Target support at the IS-8.
• Improve the business environment by aiming to attempting to reduce electricity costs, planning delays and regulatory burdens and by expanding access to finance and skills.
• Support regional growth through local growth plans, new investment funds for city regions and closer partnerships with devolved administrations.
• Strengthen economic resilience by backing so-called foundational industries (such as steel, chemicals and ports), investing in critical supply chains and increasing defence spending.
• Establish a permanent Industrial Strategy Council, supported by an Industrial Strategy Unit in the Department for Business and Trade, to monitor delivery and track progress against core metrics (such as business investment, productivity and exports).

What is an industrial strategy?

Industrial strategies provide an overarching framework, or plan, for the economy (or key parts of it).

There are multiple definitions of industrial strategy. The term has traditionally been used to describe government interventions that support the development of particular industries, especially manufacturing and other heavy industries (hence the name ‘industrial’ strategy).

However, the term is increasingly used more generally to refer to state interventions that seek to alter the structure of economic activity in a certain direction.

Industrial strategy goals might be economic, environmental or social. Policies that form part of the strategy may apply to specific sectors (called vertical or sectoral policies), across the economy (horizontal policies) or towards specific places (place-based policies).

Increasingly, governments have adopted mission-orientated industrial strategies aimed at bringing together bodies, both public and private, to help solve specific societal challenges.

Industrial strategy in the UK: A brief history

There have been frequent shifts in the UK’s approach to industrial policy, where active state intervention in the economy has fallen in and out of favour. These shifts have reflected ideological differences not only between political parties, but also within them. Since the financial crisis in 2008, enthusiasm for industrial strategy was revived first by Lord Mandelson in the then Labour government, then by the coalition government and later by Conservative government under Prime Minister Theresa May.