UK: Pivoting toward new technologies

Ramping up innovation

The services sector – including financial institutions, professional services, and healthcare – has long been a stalwart area for the UK, accounting for about 80% of the UK’s total gross value added (GVA) in 2023. 

But the UK has also been positioning itself as a key hub for innovation and invention in next-generation technologies. Some of the industries where the UK is already setting itself apart include:

Biotech: The country is Europe’s leading biotech hub in life-sciences start-ups. A large proportion of medical breakthroughs in recent times have come from these small and nimble companies. Top universities, including Cambridge and Oxford, have become fertile breeding grounds for start-ups, many of which have set up their operations within close proximity of universities.

AI: The UK ranks third in the world for AI readiness, but it trails the leaders (US and China) by some margin. The government has committed to supporting the sector, and in January 2025 launched a blueprint to “turbocharge” AI innovation and investment in the UK over the next 10 years. The plan outlines the steps needed to ramp up the adoption of AI across the UK with a view to boosting economic growth and increasing jobs, including establishing AI growth zones to speed up planning for AI infrastructure.  

Datacenters:  Datacenters play a crucial rule in the UK’s digital economy and are predicted to contribute £44 billion to the economy by 2035. Growth has been driven exponentially by the explosion in computing needs for AI applications. Energy consumption and sustainability concerns persist, which the industry is starting to address. 

Semiconductors: The UK has a small semiconductor industry compared to the US and some Asian countries, but it has global reach through strength in research, design, intellectual property, and compound and advanced material semiconductors. In May 2024, the government founded the UK Semiconductor Institute, with the aim of implementing a £1 billion strategy to grow the semiconductor sector, but it is unclear whether the current government will continue this commitment.

The UK also consistently features among the top five countries in the Global Innovation Index, which measures innovation based on criteria that include institutions, human capital and research infrastructure, credit, investment, linkages, the creation, absorption and diffusion of knowledge and creative outputs. 

Government commitment

The UK’s political leadership has traditionally had a pro-business focus, and this is set to continue. With a vibrant and diverse culture, the country remains an attractive destination for a global talent pool. While Brexit has slowed freedom of movement and the ability of foreign talent to find work in the UK, the country remains attractive to a mobile global workforce and the government has proven itself to be largely amenable to welcoming qualified talent.

Apart from its AI commitment, in late-2024 the government transformed the UK Infrastructure Bank into a sovereign wealth fund (SWF) – known as the UK’s National Wealth Fund. The fund aims to mobilize private investment in new technologies such as green hydrogen, carbon capture, ports, gigafactories, and green steel. The government injected an initial £5.8bn ($7.1bn) into the fund, opening opportunities for business participation and job creation.

Stability and certainty

The UK’s industrial strategy aims to give businesses long-term certainty for investment decisions. This is underpinned by a fair, transparent and stable legal, taxation, and regulatory system. The country’s laws are geared to protect intellectual property, enforce contracts and provide a fair environment for dispute resolution. While the country provides a package of incentives, such as tax breaks and subsidies, to encourage new businesses to the UK, it is likely to increase its efforts as competition from elsewhere increases.

More than a century of local knowledge

Citi has a long history of operating in the UK, and the country has traditionally been seen as its regional hub in Europe. The heart of the bank’s operations is in London, and it has a Scottish hub in Edinburgh, as well as a large back-office operation in Northern Ireland, underlying Citi’s deep roots and commitment to the region. As companies around the world explore opportunities, Citi has the breadth and width of expertise and experience to give businesses the support they need in the UK.