The UK needs many industrial strategies

This post first appeared in Research Fortnight on 2nd July 2025

Smarter growth begins with understanding value chains in innovation, say Daniel Rathbone and Eleanor Hopkins

Research and innovation drive UK productivity and economic growth, generating new products, services and processes. They open up markets, boost productivity, enhance global competitiveness, create skilled jobs across the country and bring spillover benefits across all sectors. They deliver clear societal and economic value—something governments have long recognised.

On 23 June, the UK government launched an industrial strategy to unlock opportunities for growth across eight priority sectors and position the UK as a leading destination for people, firms and industries. Research and innovation are central to that ambition.

But how will this happen? Will one approach work for all priority sectors? Do different innovations deliver benefits in the same ways, through the same routes?

A report published today by the British Academy and the Campaign for Science and Engineering helps to answer these questions. One thing is clear: we must not treat all sectors, technologies and innovation pathways as the same. There needs to be a focus on dissecting the value chains of innovation—the journey of ideas into impact—to understand where economic growth and societal value are created and which policy levers matter most.

Strong, weak, strong

The UK has core technological strengths, but they’re found at different points in the innovation process for different technologies. Often, these processes follow feedback loops across research, commercialisation and adoption that aren’t linear or intuitive.

Identifying the UK’s strengths and weaknesses for specific technologies will help in designing interventions tailored to innovation pathways across different sectors. The good news for the public purse is that for many priority areas this may not require significant new public investment.

Every nation is competitive to differing extents at capturing economic and societal value at different innovation stages and in different technologies and industries. Strengths or weaknesses in one area do not necessarily influence other areas—for any given technology or service, the UK might be, say, strong in research, weak in commercialisation and strong in the adoption of technologies and services.

Take artificial intelligence. The UK has an undeniably strong AI research base and strong venture capital backing for commercialisation, amounting to over £8.42 billion between 2019 and 2023. Adoption, however, has stuttered, with even well-funded firms facing fierce global competition.

To stand out in the crowd, the UK could incentivise parallel adoption of AI knowledge in complementary areas: AI with industrial robotics, for instance, or with immersive gallery technologies, playing to national strengths in the cultural and creative industries.

Many ways to benefit

Looking at another example, vaccine technologies show that the UK can generate immense value even if commercialisation happens elsewhere.

The UK carries out world-leading fundamental research into the biomechanics of vaccine technology. Some of these scientific breakthroughs are commercialised on home soil, but they can also be developed overseas. Even if the finished vaccine is not sold by a UK-based company, we can still reap economic and societal benefit by adopting the vaccines within the NHS.

The UK can also generate value at the adoption phase by bringing together research strengths across disciplines. Combining technological advancements with input from the social sciences and humanities brings economic and societal benefit by improving understanding of the best ways to adopt innovations in society.

What’s more, continuing to maintain strength in fundamental research will enable value capture to happen at the adoption and diffusion stage of innovations. A strong research base for a specific innovation produces value not only from the innovative product itself but also indirectly through generating skilled researchers and graduates who can support adoption in the workplace, regardless of where commercialisation happens.

Tailored approach

A one-size-fits-all approach will not remove barriers to innovation, diffusion or adoption. The government needs targeted, responsive strategies for capturing economic and societal value from all types of R&D and innovation.

While the current focus on driving commercialisation and adoption through the industrial strategy and the Science and Technology Framework is welcome, its interventions must be tailored to market realities to secure the best returns on public investment.

Research and innovation investment is necessary but not sufficient. It must be integrated with policy that targets value capture smartly and specifically across the value chain, which in turn should be tailored to sector, stage and technology. This includes interdisciplinary collaboration, something we hope the partnership between the British Academy and the Campaign for Science and Engineering highlights.

R&D and innovation are a complex and intertwined part of the UK economy, but complexity is not a barrier—it’s a blueprint for smarter growth. Let’s not miss the opportunity to deliver real value for the UK.

Daniel Rathbone is deputy executive director of the Campaign for Science and Engineering. Eleanor Hopkins is deputy head of research policy at the British Academy.