In an era shaped by climate imperatives, rapid technological evolution and global uncertainty, the role of the UK’s engineering sector is critical to economic growth.
Leaders see three areas of focus that should be built into forward thinking strategies to catalyse innovation and develop competitive advantage: energy security and net zero, supply chain resilience, and technology adoption.
1. Energy security and net zero: aligning strategy with reality
Grid reliability and electricity prices are exerting pressure on industry, especially for energy-intensive sectors. More could be done to boost existing measures including a review of solutions that are within reach.
- Adopt private energy storage: this can help stabilise operations and unlock productivity. Predictable, long-term energy strategies that reduce volatility and improve cost certainty can help bring investment back to the UK.
- Build domestic capability: the UK’s reliance on imported inputs such as critical minerals is a vulnerability for energy sovereignty, and points to the opportunity to build capability, diversify supply and strengthen strategic partnerships.
- Diversify energy resources: on the net zero pathway, a diversified mix of renewables provides the backbone for decarbonisation, with energy storage and nuclear playing complementary roles.
Panellists (left to right): Dr Liz Rowsell, Chief Technology Officer at Johnson Matthey; Alan Newby FREng, Director of Research and Technology at Rolls Royce; and Professor Julia Sutcliffe FREng, Chief Scientific Advisor at the Department for Business and Trade.
Net zero targets
Companies are pushing ahead on their own net zero targets and are increasingly ready to treat decarbonisation as a driver of innovation. However, inconsistent carbon measurement standards across supply chains and uneven progress among suppliers make it harder to compare and prioritise interventions.
SMEs in our sector are making great progress towards net zero. But the final 10% of decarbonisation is disproportionately difficult and costly across the supply chain, especially in the UK where gas remains the cheapest option.
– ETBL Forum Member
Establishing consistent, practical measurement will improve transparency and direct investment towards the most impactful reductions. Immediate collective efforts should focus on standards alignment, technology deployment at scale, and supportive regulation, so that future steps become feasible rather than prohibitive.
2. Supply chain resilience: building for the long term
Against a backdrop of global disruption and shifting geopolitics, constructive, long-term strategies should address strategic vulnerabilities in semiconductors, battery production, renewables and cybersecurity were explored in depth.
- Achieve global scale: the UK’s dependence on a small number of global suppliers for semiconductors is well known. While our domestic strengths are distinctive, they are not yet competitive at global scale, and we must focus on high value nodes that others rely on in order to build a resilient position in the international value chain.
- Secure supply: SMEs can find it hard to navigate existing cybersecurity tools and support. Improving access, guidance and practical, proportionate standards will pay dividends in resilience.
- Ensure regulation does not create barriers: regulatory misalignment with innovation is an ongoing challenge, particularly in some sectors like medical devices. Early engagement between regulators and innovators, greater transparency and appropriate government oversight are essential to ensure fair treatment, reduce delays and maintain quality and safety.
- Future-proof strategies: futures methodologies and effective horizon scanning can inform strategic planning, making it easier to anticipate shocks and capitalise on emerging niches. Businesses see real value in sharing intelligence and practical realities with government, helping shape solutions so strategies reflect what works in practice.
Rather than attempting to dominate entire sectors, the UK should identify and invest in niche roles within global supply chains. We could also see sovereign capabilities in defence and critical technologies having spill over impacts that benefit other industries and local supply chains.
- ETBL Forum Member
3. Technology adoption: overcoming barriers
Where vision meets delivery
Access to capital remains a pressing issue, especially for SMEs seeking to adopt and scale new technologies. Several leaders noted that the decline of general purpose grants such as Smart Grants has left some businesses without the flexible support needed to experiment.
Even when grants are awarded, we find that funders are much more focused on compliance rather than commercialisation or impact. There is often little follow-up support too, which can lead to new implementations fizzling out. You see this in public sector organisations like the NHS too.
– ETBL Forum Member in the Manufacturing sector
The bureaucratic burden
Challenges caused by legacy systems and the effort involved in navigating grants, regulations and tax incentives are yet more costly when combined with inconsistent industry standards or companies waiting too long to engage with regulators. This makes it harder to establish clear and efficient pathways for new technologies. Sandbox environments and precompetitive partnerships create safe spaces to test, learn and derisk deployment.
The skills gap
Skills continue to be a key focus with many businesses, both small and large, wanting to use AI and digital tools but lacking the deep understanding of how to embed them in production and operations. Mass upskilling in digital skills can be achieved through training being anchored in real workflows and sector specific examples, with focus on areas like predictive maintenance, demand forecasting, and yield improvement.
Engineering leadership for a resilient future
Engineering leadership is central to the UK’s future competitiveness. From aligning energy strategies with the realities of industrial operations and building robust supply chains through strategic specialisation to making technology adoption straightforward, safe, and valuable, coordinated action should be both feasible and high impact.
Business leaders are willing to collaborate with government, to engage early with regulators, and to invest in the skills and systems that make change stick. Insight sessions by the ETBL Forum aim to amplify successful models, advocate for proportionate and predictable regulation, and foster cross sector innovation that converts good ideas into deployed solutions. By doing so, we can ensure the UK remains a trusted leader in the niches that matter, while building resilience that translates into sustainable, inclusive growth.
We will be sharing more on upcoming ETBL Forum events in Spring 2026.
If you have any questions or are interested in hearing more about the ETBL Forum, please contact Alex Ramsay – [email protected].