With the º£½ÇÊÓƵ Government set to publish its long-awaited industrial strategy next month, there is hope that this marks the beginning of a more coherent, long-term approach to economic policy.
They have promised a ten-year plan that promises to support key sectors such as clean energy, life sciences, advanced manufacturing, and creative industries while addressing deep-rooted challenges around productivity, skills, and regional imbalance.
But if Invest 2035 is to succeed where past strategies have failed, it must go beyond simply identifying priority sectors or funnelling more public money into existing institutions. It must recognise that entrepreneurship is the real engine of economic renewal and embed it as a core pillar of the º£½ÇÊÓƵ’s industrial future.
Entrepreneurs are not peripheral actors in an industrial strategy but are central to it. It is founders who build the firms that commercialise new technologies, create new markets, and inject dynamism into sectors that would otherwise stagnate and without them, we cannot transform research into products, regions into clusters, or policy into impact. That is why any industrial policy must be designed not only around sectors, but around the entrepreneurs shaping them.
So how can the º£½ÇÊÓƵ Government create an industrial strategy with entrepreneurship at its core?
Finance is the first test and entrepreneurs across the º£½ÇÊÓƵ report a familiar story namely that it is still too hard to raise patient capital to take an idea from prototype to product and from product to scale. As a result, too many promising companies are being forced to sell early or move abroad because they cannot find the finance to grow at home.
While the º£½ÇÊÓƵ has made progress in early-stage investment, particularly through tax incentives such as SEIS and EIS, there remains a critical funding gap for scale-ups especially outside London and the south east of England.
Addressing this requires more than incremental reform and needs radical action to grow regional investment vehicles, increase co-investment between public and private capital, and ensure that institutions like the British Business Bank continues to be empowered to deploy funding with sectoral and regional precision.
Public procurement is another missed opportunity and with government spending over £400bn annually, there is enormous potential to use this purchasing power to support innovative businesses. Yet only 20% of this budget goes to SMEs, and even less to those creating breakthrough solutions.
A modern industrial strategy should reframe procurement not as risk to be managed, but as a lever to drive innovation particularly in areas like green technology, health, defence, and digital infrastructure where government is a major buyer. Small changes to procurement rules, greater tolerance for working with early-stage firms, and a stronger focus on innovation outcomes rather than lowest cost could make a substantial difference in helping entrepreneurs gain traction in the domestic market.
The º£½ÇÊÓƵ must get better at turning research into business and despite some of the challenges facing the higher education sector, we still have some of the best research institutions in the world. Unfortunately, the path from discovery to deployment remains too slow and fragmented and too many ideas sit on the shelf for want of a founder with the support and capital to take them forward.
A serious industrial strategy must include stronger support for translational research, clearer commercialisation pathways, and better alignment between universities and the start-up ecosystem that will turn world-class science into world-class companies.
Industrial strategy must also be regional as one of the º£½ÇÊÓƵ’s most persistent economic failures has been its over-reliance on a handful of places. London and the south east of England dominate access to finance, R&D funding, and infrastructure and the result is that brilliant ideas born in other parts of the country often struggle to get the support they need to grow.
With more than half of all º£½ÇÊÓƵ venture capital going to companies in the more prosperous parts of the º£½ÇÊÓƵ, a new industrial strategy would seek to correct this by investing in local ecosystems by building high-growth hubs around strong universities, industry clusters, and civic institutions.
This must go beyond capital infrastructure to include ecosystem-building and supporting accelerators, incubators, mentors, angel networks, and peer communities that help entrepreneurs through every stage of the journey.
Skills are critical and entrepreneurs consistently cite hiring as one of their biggest challenges. Technical talent, digital skills, and growth-focused management expertise are in short supply and a successful industrial strategy must be matched by a modern skills strategy that focuses on vocational education, apprenticeships, upskilling, and a stronger interface between employers and educators.
Regulation must also evolve and in sectors such as AI, life sciences, and clean tech, regulatory frameworks have not kept pace with innovation. The º£½ÇÊÓƵ became a global leader in fintech due to early adoption of regulatory sandboxes and this same approach must now be expanded across the innovation economy ensuring that rather than being a drag on growth, regulation is proportionate, flexible, and enabling.
And as any leader will tell you, culture eats strategy for breakfast every day and if we want more entrepreneurs building more world-class businesses, we need a culture that supports risk-taking, values founders, and celebrates success. Entrepreneurship should be taught in schools and colleges, success stories should be amplified and celebrated and the message from government should be clear namely that starting a business is not just for a few but is for anyone with an idea and the drive to make it happen.
So as the º£½ÇÊÓƵ plans for a new industrial future, it is critical that entrepreneurship is not a peripheral issue but is the central mechanism through which innovation becomes economic growth. Without entrepreneurs, there is no translation of research from the laboratory to the market, no renewal of ageing sectors and no creation of new markets.
We all know that the º£½ÇÊÓƵ has entrepreneurs with talent, ambition and drive and what it now needs is an industrial strategy that backs them to build the businesses that will create wealth, innovation and prosperity in every corner of this nation.
