Government's Industrial Strategy: What small businesses need to know

The government long-awaited Industrial Strategy, aimed at delivering long-term economic growth over the next decade, has been published. Read below for the key measures of interest to small businesses.

More measures are expected in a separate Small Business Strategy which is due to published in July.

Access to finance

At the Spending Review, the government announced the British Business Bank's total financial capacity will increase to £25.6 billion, enabling a two-thirds increase in support for smaller businesses. As a result, the Bank will take steps including:

• Commit an additional £4 billion of capital through the new Industrial Strategy Growth Capital scheme to support businesses in the Industrial Strategy's eight priority sectors. These are advanced manufacturing, clean energy industries, creative industries, defence, digital and technologies, financial services, life sciences, and professional and business services. They are known as the the IS-8.

• Commit an extra £2.6 billion of funding, with increased investment into city regions and clusters and support for underrepresented entrepreneurs.

• Tackle specific barriers for IP-rich sectors, working with the Intellectual Property Office to explore how to help businesses raise debt finance secured on intangible assets.

The British Business Bank will also:

• Introduce a new "Cluster Champions programme" in 10 places. The champions will "coordinate investment-readiness programmes, strengthen financial networks, and connect high-potential firms in the IS-8 to investors in 10 city regions: Greater Manchester, West Yorkshire, the West Midlands, Liverpool City Region, South Yorkshire, North East, West of England, Glasgow City Region and Cardiff City Region.

• The Bank's Nations and Regions Investment Funds (NRIF), which provides regional funding through specific local funds, will be expanded by £100 million to provide additional funding to businesses in the above areas.

• NRIF will also be expanded by £350 million to cover the South East and East of England.

Other small business finance initiatives will be announced in July when the government's Small Business Strategy is released.

Government business support

The government said it intends to make essential business support information on the official GOV.UK website more accessible with "a simplified and improved digital interface". Actions include:

• Introducing a new Business Growth Service in summer 2025, which will provide "a single online platform through which businesses can find everything they need in one place to help them start up, scale up, sustain growth, export, invest, and access recruitment support from DWP".

• Exploring extending the GOV.UK One Login to businesses. This is a single sign-in service which is currently primarily focused on citizens.

• Improving the GOV.UK AI chatbot.

Late payment

The government said it will continue to take actions to tackle the issue of late payment for SMEs by "undertaking significant reforms". That includes upcoming legislation to require large companies to include their payment performance reporting within annual reports, and an upcoming new consultation on potential legislative measures to go further.

The Industrial Strategy also references the appointment of Enterprise Nation founder Emma Jones CBE as the new small business commissioner, a role focused on helping small businesses tackle late payment.

Adopting digital technologies

The SME Digital Adoption Taskforce, which advises the government on improving small business adoption of digital technologies, will publish its final report of recommendations this summer, following its interim report earlier this year. Enterprise Nation founder Emma Jones was a founding member of the taskforce.

The government will expand the Made Smarter technology adoption programme to support a further 5,500 small and medium-sized manufacturing businesses to take up new technologies. A similar scheme will also be created for the professional and business services sector.

Skills and talent

There are several measures focused on skills and talent including:

• New Growth and Skills Levy short courses in areas such as digital, AI and engineering.

• Continued roll out of shorter duration and foundation apprenticeships.

• Funding uplifts for Industrial Strategy-related priority courses for 16-19-year-olds.

• Funding for technology, engineering and defence skills.

• A £187 million national digital skills programme, including £18 million for small businesses.

• A new £54 million Global Talent Fund to attract around 10 "world-class" researchers and their teams to the UK.

Energy

The government said more than 7,000 businesses in energy intensive sectors will have electricity bills cut by up to 25% from 2027. It said that the new British Industrial Competitiveness Scheme will reduce electricity costs by up to £40 per megawatt hour for electricity-intensive businesses in manufacturing sectors like automotive, aerospace and chemicals.

The firms will be exempt from paying levies such as the Renewables Obligation, Feed-in Tariffs and the Capacity Market.

Research and development (R&D)

As announced in the Spending Review, the government will provide £22.6 billion per year for research and development by 2029‑30.

The Local Innovation Partnerships Fund will provide up to £500 million to support high potential innovation clusters across the UK.

International trade

The government is due to published a separate international Trade Strategy this week, but measures announced in the Industrial Strategy include:

• Increasing the maximum size of UK Export Finance's financial portfolio.

• Improved digital export support, bringing relevant information together into one place on GOV.UK and adding richer content in

  response to industry feedback that the system is cumbersome to navigate.

• A set of pilots to accelerate the adoption of Electronic Trade Documents (ETDs).

• New support, set out in the Trade Strategy, for UK regulators, expert bodies and the government's overseas trade teams to open up and shape priority growth markets.

• Developing promotional campaigns to support the IS-8 in important markets.

• Putting the government's trade commissioners and ambassadors in major markets in charge of new strategic plans to support the IS-8, with an expectation that they will develop these in partnership with UK businesses and national, regional, and local leaders.

Speficic sector plans

Specific plans are being published for each of the eight Industrial Strategy sectors of focus. Five have been published today.

Creative Industries [read the full plan here]

Key measures include:

• £30 millon in funding for the music industry.

• £30 million in funding for video games start-ups.

• £75 million in funding for the screen sector.

• A new £150m Creative Places Growth Fund devolved to six mayoral strategic authorities (Greater Manchester, Liverpool City Region, West of England, North East, West Midlands, and West Yorkshire) to tackle barriers to growth.

• The governmnent will appoint a creative freelance champion, to advocate for the sector's creative freelancers within government.

• £10 million to expand the National Film and Television School, unlocking £11 million in investment from industry.

• Establishing a Creative Content Exchange, a marketplace for selling, buying, licensing and enabling permitted access to digitised cultural and creative assets.

Advanced manufacturing [read the full plan here]

Key measures include:

• £4.3 billion in funding, with up to £2.8 billion in R&D over the next five years, including for zero-emission vehicle manufacturing.

• £99 million expansion of Made Smarter from 2026 to help 5,500 more SMEs adopt technology.

• Targeted regulatory changes and implementation, e.g. to extend drone trial periods and trial autonomous taxis on UK roads by Spring 2026.

Clean Energy Industries [read the full plan here]

key measures include:

• £1 billion Clean Energy Supply Chains Fund, including £300m to invest in offshore wind supply chains.

• £544 million Clean Industry Bonus for offshore wind.

• £14.2 billion for Sizewell C, over £2.5bn for Small Modular Reactors,

• £9.4 billion for CCUS to 2029, over £2.5bn for fusion over 5 years.

• Heat Pump Investment Accelerator, providing grants to manufacturers to invest in new capacity.

Digital and technologies [read the full plan here]

Key measures include:

• Catalyse R&D in frontier industries, including £670m to drive the development and adoption of quantum computers in the UK.

• £187m for training a million young people in tech skills.

• Support from the new Regulatory Innovation Office to clear a path to market for innovative products.

• £2 billion for the implementation of the AI Opportunities Action Plan, including a 20-fold expansion of the national cluster of AI supercomputers by 2030 and a new Sovereign AI Unit.

Professional and business services (PBS) [read the full plan here]

Key measures include:

• Expand Made Smarter in England to the PBS sector to accelerate technology adoption, part of a £150m package.

• Focus on securing mutual recognition of professional qualifications agreements and pivot government overseas resource to support firms.

• New Smart Data programme, with an initial focus on the property sector.

• PBS hubs across the UK to grow PBS technology firms.

Enterprise Nation's reaction

Aaron Asadi, Enterprise Nation CEO, issued a joint statement with the leaders of other business groups:

"The Industrial Strategy launched today marks a significant step forward and a valuable opportunity for the business community to rally behind a new vision for the UK-boosting confidence, sentiment, and enthusiasm for investment.

"From start-ups and small businesses to large corporates, businesses need a more attractive, stable environment that enables faster, easier, and more certain investment decisions.

"We welcome the government's engagement with businesses across the UK. Much of what we've shared has been heard and reflected in this strategy. While there's more to do, we are ready to support the next steps.

"We encourage businesses nationwide to get behind this strategy and champion the UK as the best place to live, work, invest, and do business."