The UK’s future economic growth, productivity and national resilience depend on urgent action to strengthen the country’s digital infrastructure foundations and keep the UK competitive as global rivals race ahead on artificial intelligence (AI), quantum and next-generation compute, a report from TechUK warns.
In its Digital infrastructure 2035: The backbone of Britain’s future economy report, the UK technology trade association also called for a 10-year digital infrastructure strategy to secure growth, investment and national resilience, and set out five objectives for building a “world-class digital economy” by 2035, along with six recommendations for government, including a Cabinet-level minister for digital infrastructure.
While the UK remains a global leader in several areas of digital infrastructure, TechUK warns that mounting challenges threaten to undermine its competitive advantage. Digital technologies already contribute an estimated £286bn in annual gross value added to the UK economy – around 13% of national output – and have been a major driver of productivity growth since the pandemic.
Furthermore, TechUK highlighted that the UK is home to Europe’s largest datacentre market, world-leading research in quantum, photonic and neuromorphic computing, and growing momentum in full-fibre broadband and 5G standalone deployment.
The report argued that connectivity, compute and data infrastructure are now as fundamental to economic success as transport, energy and housing. From AI and smart manufacturing to digital public services and next-generation research, TechUK emphasised how every aspect of the UK’s digital future relies on robust underlying infrastructure.
However, the report revealed that significant barriers to investment and expansion remain. Industrial electricity prices are among the highest in the developed world, grid connection delays can extend for years, planning processes remain poorly adapted to digital infrastructure, and the UK continues to lag international competitors on network performance.
TechUK stressed that the UK’s challenge is not a lack of technological capability, but the absence of a coordinated national strategy capable of matching the scale and pace of global competition.
Five objectives
The organisation’s five objectives to build a world-class digital economy by 2035 comprise:
- A fully connected and resilient nation with universal full-fibre and 5G standalone coverage, commercial 6G deployment underway, and strengthened cyber resilience;
- A globally competitive position in next-generation compute technologies, including quantum, neuromorphic and photonic computing;
- Electricity prices below the IEA median to attract investment in the UK rather than deter it;
- Governance structures capable of keeping pace with technological change, supported by streamlined planning and regulatory frameworks;
- Widespread digital adoption across every sector and region of the UK, enabling productivity growth and economic opportunity nationwide.
To meet these targets, TechUK’s report calls on government to work with industry to deliver a comprehensive programme of reform.
As part of the suggested 10-year digital infrastructure strategy, to be completed by 2027, is a long-term, cross-government strategy that sets out a clear vision, and treats connectivity, compute and data infrastructure as a set of interdependent digital capabilities rather than separate policy domains.
This, it says, should be updated on a two-year cycle to keep pace with technological change and evolving market conditions. It also includes a connected and digital-by-design principle as a requirement for all major public sector investment and policymaking decisions, embedded in appropriate guidance from the Treasury, the Department for Culture, Media and Sport, and the Department for Business, Innovation, Science and Trade.
Another key demand was that UK government should designate a minister of state with cross-government responsibility for delivering the digital infrastructure strategy, based in the Cabinet Office so that the post spans the departments now holding the relevant levers. The post should complement rather than duplicate the AI brief, focusing on the physical layer of connectivity, compute capacity, power and planning on which AI adoption depends.
It added that government should urgently review and mitigate the policy and regulatory barriers that constrain investment in network performance, and that it should establish a dedicated digital infrastructure unit in the Regulatory Innovation Office.
The report concluded that strengthening digital infrastructure is not simply a technology policy objective, but a national economic priority. Failure to act risks slower growth, weaker productivity, reduced investment and increasing dependence on infrastructure and technologies developed elsewhere.
“Digital infrastructure is no longer simply an enabler of economic activity, it is the foundation on which future economic growth, innovation and national resilience will be built,” said TechUK associate director for digital infrastructure Sophie Greaves. “The countries that invest now in connectivity, compute and data infrastructure will be best placed to capture the economic opportunities of the next decade.
“By following the roadmap we have set out for a resilient digital infrastructure by 2035, the UK can secure its position as a leader in compute, bringing significant benefits to the economy.”
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