The UK’s Modern Industrial Strategy, launched on 23 June 2025, has reached its one-year assessment point. While the government highlights private-sector commitments and investment in key areas, industry leaders and manufacturers report gaps between the strategy’s commitments and their implementation on the ground.
Stephen Phipson CBE, CEO of Make UK, and Paraic O’Lochlainn, vice-president of eMaint, a Fluke Corporation brand, have both expressed concerns that many businesses have yet to see the expected benefits, calling into question the strategy’s effectiveness despite its ambitious vision.
Outcomes of the industrial strategy review after one year
Government figures indicate a period of considerable activity under the strategy. More than £380 billion in private-sector commitments have been secured for high-growth areas, reportedly supporting over 155,000 new jobs.
In addition, the government reports progress on key structural issues for manufacturers. Electricity bills have seen reductions through lower network charges, and efforts are underway to support faster electricity grid connections. Furthermore, £9 billion has been allocated to research and the commercialisation of new technologies.
A nationwide initiative aims to upskill 10 million workers in artificial intelligence by 2030 as part of efforts to address future workforce needs. These figures indicate the scale of government and private-sector activity under the strategy.
However, industry feedback presents a different picture of the strategy’s implementation. The strategy, which initially faced some scepticism among SMEs, has also attracted criticism over its implementation. Manufacturing investment is intended to support growth, but its effects depend on how effectively policy reaches individual businesses.
Industry’s call for tangible support
Stephen Phipson CBE of Make UK gave a direct assessment: “One year on from its launch, the Industrial Strategy is falling short on delivery.” He said that while manufacturers largely support the strategy’s vision and direction, a clear gap persists between policy announcements and their actual business impact. However, 55% of manufacturers report seeing no benefit from the strategy so far.
Phipson stresses that the core issue isn’t the strategy’s ambition but the pace and scale of its execution. Manufacturers are operating in a more challenging environment than a year ago, facing persistent high costs and global uncertainty. These pressures can limit the capital available to businesses for investment and growth.
Paraic O’Lochlainn of eMaint similarly highlighted these concerns, highlighting how recent geopolitical tensions and supply chain disruptions reinforce the urgency of strengthening domestic manufacturing. He acknowledges the encouraging signs from government reports, such as bill cuts and research funding, but said that many manufacturers are still waiting for direct support.
New Censuswide research, commissioned by Fluke, supports these industry observations. While 61% of UK manufacturers reported benefiting from the strategy in some capacity, less than a third, just 28%, have actually received direct grant funding. This difference indicates that direct grant funding has reached a smaller proportion of manufacturers than the broader group reporting some form of benefit.
Persistent challenges in skills and technology adoption
One of the most pressing issues identified by industry leaders is the pervasive skills gap. Despite government commitments of more than £1 billion to workforce training in key sectors such as manufacturing, implementation has so far been limited, according to the research cited. Fluke’s research found that 32% of manufacturers had hired or trained staff through government-backed programmes.
This is notable given that 90% of manufacturers report that skills shortages are affecting their operations. The gap between funding and reported outcomes may be limiting the pace of workforce upskilling the existing workforce and the development of future talent pipelines. Addressing this requires a comprehensive approach, integrating education, industry, and government efforts.
Technology adoption presents another challenge for UK manufacturers seeking to remain internationally competitive. Despite considerable public investment in industrial policy, direct grant funding for manufacturers remains low. The UK appears to offer fewer incentives for research and development than some competing markets.
This may limit manufacturers’ ability to invest in new technologies and other measures that support productivity and growth. If the UK is seeking to reshore production and support reindustrialisation, greater support for technological upgrades and innovation could help manufacturers invest in these areas.
The issues identified may also be relevant to other economies. Many developing economies, particularly across Africa, face similar challenges in fostering robust industrial sectors. Strategic UK job creation relies on targeted investment and effective program delivery.
The strategy’s foundation and future direction
The 2025 Modern Industrial Strategy was conceived as a 10-year plan to provide long-term certainty for businesses and investors. It aims to give the state a more active role in supporting economic growth, tackling obstacles such as high energy costs, limited access to finance, insufficient long-term planning, and regulatory burdens.
The strategy targets eight specific high-growth sectors, known as IS-8, including advanced manufacturing and clean energy industries.
Key commitments include plans to reduce electricity costs for electricity-intensive businesses by up to 25% from 2027 through a new British Industrial Competitiveness Scheme (BICS). Initiatives also focus on reducing grid connection times, which could support new industrial developments and energy transition projects.
Make UK’s Stephen Phipson has identified the priorities for the strategy’s second year. The focus must shift from policy design to concrete delivery. He said the government needs to reduce business costs, accelerate investment and ensure that reforms translate into practical changes for manufacturers. Industry supports the strategy’s goals, but Phipson said continued support will depend on progress in implementation.
Implications for engineering and industrial growth
For the engineering sector, these findings highlight the need for clear pathways to government support. Engineers and operations professionals can benefit from stable policy frameworks and access to funding for innovation and productivity improvements. The perceived gap between policy commitments and practical delivery may create uncertainty and affect investment in critical infrastructure and advanced manufacturing processes.
The emphasis on skills development, particularly in AI, has been highlighted as an important area, but it requires faster, more effective implementation to close existing gaps. Engineers need continuous upskilling to adapt to new technologies and processes. Without continued skills development, UK manufacturers may face challenges in adopting digital technologies and advanced production techniques.
Moreover, the call for greater incentives for R&D investment directly impacts the ability of engineering firms to develop and implement next-generation solutions. Industrial competitiveness also depends on a supportive environment that encourages continuous technological advancement and supports the commercialisation of new technologies and ideas.
The UK’s capacity for innovation in engineering will largely depend on how effectively these issues are addressed in the coming year.
Lessons for emerging industrial economies
The UK’s experience with its Industrial Strategy may provide relevant examples for economies across Africa and other developing regions currently working to build their own industrial capacity. The experience illustrates that establishing a policy framework is only one part of implementing an industrial strategy; effective delivery mechanisms and tangible support for businesses are paramount.
Governments in these regions have introduced industrialisation plans with varying objectives and levels of implementation. However, without addressing fundamental issues such as high energy costs, access to finance, and critical skills shortages, these strategies risk remaining aspirational. Direct grant funding, targeted workforce development programmes and incentives for local R&D can support industrial growth and resilience.
The experience highlights the need for constant feedback loops between government and industry. Understanding the challenges faced by manufacturers and adapting policy delivery accordingly can help translate strategic plans into practical economic outcomes and build competitive industrial bases.
