by Michael Mainelli

The UK’s Modern Industrial Strategy (Invest 2035) names eight high-growth priority sectors – advanced manufacturing, clean energy, creative industries, defence, digital/technologies, financial services, life sciences, and professional/business services (the ‘IS-8’)– to power prosperity, security, and net-zero transition. It’s a coherent list – but it misses some key London elements. By focusing on sectors rather than places, the strategy risks underplaying the strategic role of London – not merely as one contributor among many but as a national platform where multiple sectors converge, scale, and export influence.

National engine
London is the rare economic ecosystem where finance funds innovation at speed, creative talent markets it globally, and professional services package it for export. The city’s density of capital, skills, infrastructure, and global connectivity gives it an outsized multiplier effect. If Invest 2035 is about national growth, the place that most consistently converts ideas into investment and exports deserves explicit treatment – not as a special case, but as a national engine.

World-class
To be fair, the eight sectors do suit London. Financial services cluster around the historic core of the City of London and the modern skyline of Canary Wharf, where capital formation is as routine as morning coffee. Digital and life sciences draw from world-class universities and venture ecosystems. Creative industries thrive from studios to stages. Clean energy innovation finds partners and investors quickly. Professional services – legal, consulting, design – bind everything together.

National levers
In London, even your sandwich comes with a business model and a seed round. Yet if London is the place where the IS-8 sectors interlock, three additional sectors deserve recognition in a London supplement: property and construction, hospitality and tourism, and education. These are not mere local conveniences; they are national levers.

Property & Construction
London’s built environment is the staging ground for productivity. Housing availability affects labour mobility; commercial space shapes firm formation; infrastructure underpins decarbonisation. Construction in London is also a testing bed for modern methods – low-carbon materials, retrofit at scale, and digital twins. What happens in London’s planning, financing, and delivery models cascades across the country. If the UK wants to master green retrofit and urban densification, London is the laboratory and showroom.

Hospitality & Tourism
London’s cultural magnetism is a foreign-earnings machine. Visitors come for heritage, theatre, sport, cuisine, and retail – and venture onward to the regions later, as is happening at scale with return Asian visitors. The city’s global brand amplifies national soft power and export demand. From the galleries of the British Museum to the stages of the West End, tourism is an industry of ideas and impressions that converts into trade and investment. Airport connectivity makes London the UK’s front door.

Education
London’s universities and colleges attract global talent, generate research, and supply the skilled workforce that feeds every IS-8 sector. International students are a major export; graduates power start-ups and public services alike. Education in London is also a policy testbed for lifelong learning, reskilling, and industry partnerships that the rest of the country can adapt.

Power strip
Think of London as the UK’s economic power strip: everything plugs in there, though we still argue about who trips the switch. What should London be doing – for the nation and for itself?

  • Scale green urban transformation. London can lead the UK’s net-zero transition by accelerating whole-district retrofits, electrified transport, and circular construction. Publishing open standards and procurement models would let other cities replicate what works. A capital that proves decarbonisation can coincide with growth gives the entire country a template.
  • Mobilise capital beyond the M25. London’s financial depth should more deliberately fund regional innovation – through co-investment platforms, place-based funds, and streamlined listing pathways for scale-ups nationwide. If London is the UK’s balance sheet, it should also be its balancing-up place.
  • Export services as systems. London excels at packaging complex offerings – legal frameworks, design, engineering, finance – into turnkey exports. Bundling expertise for infrastructure, health, and digital government abroad supports national trade objectives while sustaining high-value jobs at home.
  • Build and house the workforce. A credible growth strategy requires homes people can afford and transport that connects opportunity. Planning reform, reusing brownfield land, faster approvals for transit-oriented development, and modern construction pipelines would ease constraints that currently impede productivity.
  • Double down on skills and inclusion. London can expand technical education pathways aligned to the IS-8 and the three supplemental sectors – construction technology, hospitality management, and applied research. Inclusive growth is not just fair; it enlarges the talent pool that fuels national competitiveness.
  • Act as a national convenor. London should host mission-driven coalitions that bring together regions, investors, and universities to solve shared challenges – retrofit at scale, life-sciences translation, AI adoption in SMEs so breakthroughs diffuse quickly across the UK

 

The IS-8 provide a strong sectoral backbone. Recognising London’s integrative role – and explicitly adding property and construction, hospitality and tourism, and education in a London supplement – would turn a good strategy into a place-powered one.

When London thrives as a platform for the whole country, growth travels well beyond the capital, and might even arrive ahead of schedule.

Professor Michael Mainelli, president of LCCI, served as Lord Mayor of London 2023-24 and remains an international ambassador for the City. He is chair of Z/Yen, the City of London’s leading commercial think-tank, known for its work in economics and finance, and science and technology.