techUK calls for better regulation to drive investment in the UK’s digital economy
[London, UK] 21 May 2025 – Technology trade association techUK has today released a new report, urging government and regulators to adopt a ‘pro-growth’ mindset to drive investment and economic growth.
In the report, techUK outlines a clear vision for how regulation can serve as a strategic lever to unlock innovation, strengthen the UK's global competitive position in emerging technologies, and improve outcomes for consumers and businesses.
The report sets out 10 recommendations to improve the effectiveness of the UK’s regulatory regime, so that is more agile, pro-innovation and outcomes focused. To deliver on this ambition, techUK focuses on four areas: adopting a shared growth mindset between regulators and Government; supporting innovation and market dynamism; improving coordination and information flows with industry, and finally; unlocking opportunities in key sectors, such as AI, health and social care, and critical national infrastructure.
The report underscores the need for the UK’s regulatory environment to evolve and keep pace with rapid technological advancement. Rather than seeing regulation and innovation as opposing forces, techUK argues for a pro-innovation regulatory approach - one that embraces risk-based, flexible, and outcome-focused framework that removes regulatory uncertainty for business investment decisions.
Key opportunities highlighted
There is a suite of opportunities where better regulation can deliver tangible economic benefits:
Enabling innovation at speed: By embracing agile and anticipatory regulation, the UK can reduce time-to-market for innovative products and services.
Promoting responsible innovation: Regulation should enable innovation while safeguarding public trust, encouraging responsible data use, AI, and digital infrastructure.
Attracting global investment: A transparent, consistent, and pro-growth regulatory approach will strengthen the UK’s position as a global hub for tech investment.
Boosting productivity across sectors: Regulation can catalyse tech adoption across the eight sectors identified in the industrial strategy and beyond, including in healthcare, transport, finance, and manufacturing, driving cross-economy productivity gains.
Key recommendations
The report sets out ten recommendations for the UK Government, directly responding to the opportunities identified:
Clarify How Regulators Should Interpret Growth: Use the Industrial Strategy to embed a ‘growth mindset’ in regulation. Government should articulate what supporting growth means in different regulatory contexts and set out cross-cutting objectives.
Regulators Should Make their Growth Commitments Explicit: Regulators should clearly articulate and publish their commitments to supporting economic growth with tangible metrics.
Strengthen Mechanisms for Post-Implementation Review: Where there is merit, techUK recommends strengthening mechanisms for post-implementation reviews, including through expert analysis of regulatory outcomes, and assessments of the cumulative impact of regulation and its cost.
Utilise the Regulatory Innovation Office to Promote Innovation: To ensure the RIO successfully supports tech scale-ups, techUK proposes that their work is complemented by mapping the existing regulatory landscape to identify where additional sandboxes and test beds may be needed and strengthening coordination between existing initiatives. The RIO should also help improve accountability and promote innovation in regulation across all sectors of the UK.
Provide Targeted Support to help SMEs Navigate Regulation: Supporting SMEs to scale-up is essential for bolstering growth and innovation. Many SMEs currently experiment with new tools but lack the skills and regulatory confidence to use them effectively.
Adopt the Outcome Based Cooperative Regulation Model: The report suggests regulators should adopt the model of Outcome Based Cooperative Regulation (OBCR), focusing on how these methods can deliver better results for end-users and enhance regulatory efficiency. This model shifts the focus from prescriptive rulemaking to setting clear goals and working flexibly with industry to achieve them.
Ensure Regulators are Well-Resourced for Effective Industry Engagement: To ensure regulators possess the right resources and sufficient expertise to investigate across industry and to facilitate effective engagement, techUK recommends:
1) Promoting diversity in experience across regulator personnel, particularly on boards.
2) Ensuring the presence of well-resourced business engagement teams across all regulators.Establish a Regulatory Initiatives Grid for the Digital Sector: Considering the success of the Regulatory Initiatives Grid (RIG) for the financial services industry, techUK recommends establishing a RIG for the digital sector. The Grid would map out regulators’ key milestones over the next 24 months, identifying potential overlaps and their potential business impacts.
Improving Procedural Transparency: the report recommends that regulators explore ways to improve the procedural approach to their investigations, transparency, speed, predictability and timely access to evidence in this process.
Align on International Standards Where Appropriate: Where possible and appropriate, the report suggests that new regulation should be aligned with international standards in support of outcomes-based regulation.
Julian David, CEO of techUK, commented:
“The UK has the opportunity to be a world leader in tech innovation, but only if we get regulation right. Better, pro-growth regulation isn’t about deregulation; it’s about doing regulation differently. Our report shows how we can build a regulatory system that fuels innovation, protects the public, and drives economic growth.
“By working together across policy, regulation and industry, we can deliver a regulatory framework that empowers the UK’s digital economy for decades to come.”
Notes to Editors
The full report can be downloaded here.