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Paving the way for digital innovation
The UK government’s industrial strategy on digital and tech.
Read time: 5 mins Added: 17/12/25
Speakers from the recent digital and tech roundtable as part of the CBI Industrial Strategy Roadshow discuss the digital and technology sector landscape in the UK.
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0:07
At Lloyd's, we're more than halfway through our transformation.
0:11
It's a transformation that is defined by technology and AI.
0:15
We are putting AI at the heart of everything that we do to make better products for our customers, to be more productive and to grow our businesses.
0:24
And what does it mean for the wider economy?
0:27
It's a fantastic opportunity for our businesses across the board to be better and to bolster the UK economy.
0:38
Universities like the University of Sussex that I work for, we are really keen to work with businesses and there are so many different ways that we can come together to support businesses in developing their operations, in putting new expertise into their businesses and making sure that they are becoming more productive and they support the government's economic growth agenda.
1:06
Businesses across every sector and every size are much more aware than they have been in the past of the importance of digital technologies and technologies more broadly for the future of their businesses.
1:19
And it isn't just about the future, it really is about now.
1:22
And so businesses are grappling with these questions and CBI is in a great position in partnership with Lloyd's through this roadshow.
1:29
But to provide a real opportunity for businesses to learn from one another, that's really important, as well as to hear from and think about ways we can partner with government as business to make sure that together we can take advantage of these opportunities and really see growth in the UK.
1:47
Working in partnership is absolutely the key message for me today.
1:51
It is clear that in the UK we have all the ingredients of success in this sector.
1:56
We have the best universities, we have the best businesses with the right priorities and the regulators are working together with our businesses to make it real and to be able to scale it for the entire economy.
The CBI and Lloyds Industrial Strategy Roadshow on digital and tech, welcomed policymakers and businesses to discuss how to support government to deliver against its sector plan.
Representatives from Lloyds, CBI, the Department for Science, Innovation & Technology, Fujitsu, Salesforce, Capita, Accenture, the Universities of Sussex and Reading and others met to discuss how businesses can collaborate to drive economic growth in the sector.
Despite global competition, the UK government is committed to becoming the world’s third-largest destination for tech investment and to nurturing at least one UK tech company valued at £1 trillion by 2035. Alongside this, the creation of two AI growth zones, a tech skills programme and a Prosperity Deal with the US supports innovation in the sector.
The government is still at the beginning of a 10-year sector growth plan and will continue close collaboration with industry. By 2035, the aim is for Britain to be one of the top three countries in the world to create, invest in and scale-up a fast-growing technology business.
Regulation and innovation: a balancing act
A central theme is the government’s role in shaping a regulatory environment that delivers clarity while still enabling innovation to thrive.
The UK’s regulatory approach is widely viewed as world-leading, but this needs to be carefully calibrated to keep pace with emerging technologies to support rather than hinder growth. The UK’s pro-innovation approach to AI regulation offers a genuine opportunity to experiment, test, learn, and innovate at scale. Coupled with the UK’s research excellence and university-led expertise, this gives us a strong platform to lead in AI.
Several effective tools are already in use, including regulatory sandboxes, open channels for technical engagement with regulators, and procurement practices that help create early demand for domestic innovation – supporting both start-ups and scale-ups.
Across the discussion, there was consistent emphasis on the importance of international agreement on standards, proportionate action against bad actors, and targeted public investment in skills and cyber capabilities.
Establishing a skills strategy for a future workforce
Participants stressed that the UK needs a skills strategy that simultaneously fuels the growth of the digital and tech sector and helps the wider public confidently adopt new technologies.
They argued for long-term investment in both higher education and vocational training, supported by incentives that make it easier for SMEs to access learning opportunities.
They also highlighted the value of curricula shaped in partnership with education providers, such as university-led AI and leadership programmes, as well as comprehensive upskilling efforts within individual firms.
But the speakers noted developing the right culture and strengthening change-management capabilities are just as important as training in technical skills.
However, several attendees cautioned that skills investment alone is not enough; real progress depends on strong market demand to pull these capabilities through.
AI: securing the benefits for all
Businesses said that AI offers huge commercial opportunities but also brings complex regulatory challenges.
Recognition of the benefits of AI are growing. Lloyds Business Barometer research found four in five (82%) of UK businesses using AI report increased productivity, and more than three quarters (76%) say it has boosted profitability. For SMEs, these gains can mean more jobs, better margins, and new opportunities to grow.
Despite this, the speed of change is faster than current institutions can handle, and many are still trying to turn high-level principles into practical rules and processes.
Responsible development and use of AI are seen as essential for customer trust and business reputation. Participants stressed that this responsibility starts within companies themselves – through clear internal rules and transparency – alongside external regulation.
Speakers also highlighted wider challenges: building responsible AI and cyber practices into everyday work, finding, training, and keeping the skilled people needed, upskilling staff at all levels and dealing with international issues such as global standards, sovereign AI models, and the limits of regulation done by one country alone.
A recurring theme is the need to strengthen AI skills and confidence across the workforce. Building wider AI literacy will be essential to help businesses adopt technology responsibly and unlock productivity.
They also pointed to several areas where government and industry could work together more effectively:
- Providing support to help SMEs use AI safely and securely
- Giving businesses access to safe testing environments, like sandboxes
- Creating frameworks that model positive examples of AI from risky ones
- Using procurement and early-adopter programmes to boost demand
The opportunity for AI is substantial. The Office for Budget Responsibility’s latest scenario suggests that, if AI-driven productivity gains are realised, UK GDP could be around 6% higher by 20401.
Digital transformation is in reach for every sector. With the right tools, SMEs across manufacturing, retail and services can use automation and data to streamline operations and grow.
At Lloyds, we're more than halfway through the largest transformation in UK financial services having invested more than £4 billion in our digital transformation. Drawing on insights from 28 million customers, we’re using generative AI to make banking safer, more intuitive, and more personalised. From early next year, we’ll launch the UK’s first agentic AI financial assistant to help customers manage spending, saving and investments in a smarter, more proactive way.
We’re also proud to champion British innovation by supporting thousands of technology businesses at every stage of their growth. Our team of sector specialists across the UK delivers tailored, relationship-driven solutions to help them succeed.
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Any views, opinions or forecasts expressed in this document represent views or opinions of forum participants and are not intended to be, and should not be viewed as advice or a recommendation from Lloyds Bank or any other party.