The UK government’s industrial strategy aims to strengthen economic growth by focusing on foundational sectors, supply chain resilience, clean energy and the skills needed for a modern workforce. The Institution of Chemical Engineers (IChemE) welcomes many of the commitments but has highlighted areas where more clarity and action will be required to ensure it delivers long-term benefits for industry and society. Here, Duncan Lugton, head of Policy & Impact, analyses the strategy.
IChemE
A significant aspect of the strategy is the government’s recognition of foundational industries, such as chemicals, which underpin progress in multiple priority growth areas including advanced manufacturing, clean energy and life sciences. Chemical engineering plays a pivotal role in these areas by providing essential processes, materials and expertise that enable innovation across the economy.
IChemE has long called for stronger recognition of these sectors which provide the building blocks for so many technologies and industries. This acknowledgment is a positive step towards embedding chemical engineering and related disciplines more firmly within the UK’s plans for sustainable and competitive industrial growth.
Energy costs and competitiveness
Energy costs, a longstanding challenge for UK manufacturers and industry, have been a major factor in reducing competitiveness compared to international counterparts. The government has announced plans to consult on measures to address this ahead of 2027. While this does not offer immediate relief, it is an important starting point for developing long-term solutions that can help UK industry compete globally while transitioning to low-carbon energy systems.
The strategy also emphasises strengthening supply chains to support both economic resilience and national security. This is particularly relevant to the chemicals sector which provides essential inputs to a range of industries including pharmaceuticals, electronics, food production and clean energy technologies. It is crucial to build resilience and ensure secure reliable supply chains that can adapt to future challenges such as geopolitical tensions and sustainability requirements.
Education and AI
Addressing skills shortages is another central theme of the industrial strategy. The government has reaffirmed its commitment to developing the workforce through use of the Growth and Skills Levy and the Lifelong Learning Entitlement which aims to make training and reskilling more accessible throughout people’s careers. New initiatives include additional investment in skills and a more targeted approach to the Strategic Priorities Grant for universities.
IChemE continues to advocate for greater emphasis on STEM education funding and lifelong skills development so future generations are well prepared to lead in these critical industries.
Stronger support for foundational skills is essential to avoid future bottlenecks in talent supply and to ensure that the UK can deliver on its industrial strategy.
AI and digital skills are highlighted through references to previously announced programmes such as the Tech First package and partnerships with major technology companies including NVIDIA, Google and Microsoft. Given the transformative potential of AI and digitalisation for improving efficiency, sustainability and innovation across industry, more targeted action will be needed to equip engineers and organisations with the tools and expertise required to fully exploit these technologies. While these initiatives are valuable, there is more to be done in relation to industrial sectors like chemicals manufacturing and process engineering.
Supporting delivery
IChemE is working closely with peer organisations such as the Royal Society of Chemistry, The Institute of Physics and IOM3 to help the government make effective use of funding such as the Strategic Priorities Grant to support foundational STEM disciplines.
We are closely monitoring sector-specific plans including the clean energy sector plan to ensure the unique contributions and requirements of chemical engineers are properly understood and reflected.
Some local growth plans were published before the national strategy leading to uncertainty about how well they will be coordinated and integrated. Plans for AI and digital transformation are relatively limited with little to indicate a major step forward in supporting industry adoption. Without stronger mechanisms to align national and local strategies and to ensure coherent delivery there is a risk that ambitions for industrial growth may not fully materialise.
IChemE will continue to collaborate with government, industry partners and academic institutions to help shape the next phase of the UK’s industrial strategy. Through advocacy analysis and expert guidance, it aims to ensure that chemical engineering is recognised and supported as a key enabler of innovation, competitiveness and sustainable growth.