techUK report: Digital Infrastructure 2035 – The backbone of Britain's future economy

Digital technologies can help unlock productivity, boost economic growth and raise living standards across the UK. But every AI agent deployed, every smart factory built and every digital public service delivered depends entirely on the connectivity, compute and data infrastructure beneath it. That foundation rarely makes headlines, and it is rarely treated as a strategic priority in its own right.

techUK's new report argues that this has to change. Digital infrastructure is not an input to the technology sector – it is the layer on which all future economic activity will be built, and the UK's position is one of genuine strength but mounting risk.

The report sets out where the UK leads, where it is falling behind, and what it will take to close the gap over the next decade. It calls for an economy that is connected and digital by design, and sets out how Government, working in partnership with industry, can lay the foundations for economic success by 2035.

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Where the UK stands

£286bn

Annual GVA from digitally enabled activity – 13% of the UK total

44th/59th

Global ranking for fixed and mobile connection speeds

63%

How far UK industrial electricity prices sit above the IEA median

8 years

Grid connection waits facing digital infrastructure projects

The UK has the largest data centre market in Europe, a research base at the frontier of quantum computing, photonics and neuromorphic computing, and strong momentum in both full-fibre rollout and 5G Standalone.

Against that, industrial electricity prices are roughly four times those in the United States, grid connection delays are deterring investment at the pace the economy requires, and a planning system never designed for digital infrastructure creates friction at every level. The UK is broadly connected, but not yet consistently high-performance.

Five tests for 2035

The report sets out what success should be measured against:

A fully connected and resilient nation – universal, reliable full-fibre and 5G Standalone coverage, commercial 6G underway, and the post-quantum security transition complete across critical systems.

A leading position in next-generation compute – the UK's research base in quantum, neuromorphic and photonic technologies translated into a stronger commercial ecosystem and global supply chain position.

Electricity costs that attract rather than deter investment – non-domestic prices below the IEA median.

Governance built for the pace of digital innovation – connected and digital by design embedded across policymaking and planning, with a dedicated minister to deliver it.

Digital adoption across the whole economy – near-universal adoption across every sector and region, particularly among SMEs.

Headline recommendations

Publish a 10 Year Digital Infrastructure Strategy by 2027, updated on a two-year cycle, treating connectivity, compute and data infrastructure as one interdependent system. Embed a connected and digital by design principle in Treasury, DCMS and DBIST guidance.

Designate a Minister of State in the Cabinet Office responsible for delivering the strategy, spanning the departments that now hold the relevant levers, attending Cabinet and supported by a cross-departmental delivery board.

Build networks for performance, not just coverage – with a particular focus on mobile. Building on the August 2026 NPPF, widen permitted development rights for new and upgraded mast, rooftop and small cell sites, and protect the existing sites networks depend on.

Establish a digital infrastructure unit in the Regulatory Innovation Office to identify and resolve the regulatory barriers constraining investment.

Publish an interim update to the UK Compute Roadmap by 2027, adding dedicated sections on neuromorphic computing, photonics and quantum, with milestones for commercialisation and supply-chain resilience.

Deliver cheaper, more resilient electricity – move all levies from electricity bills to general taxation by 2029, accelerate grid connection reform, and publish a roadmap to bring non-domestic prices below the IEA median by 2035.

Digital infrastructure is not one sector among many. It is the foundation every other part of the economy now builds on, and the UK cannot afford to treat it as an afterthought for another decade.

TBC

techUK

Meet the team

Sophie Greaves

Associate Director, Digital Infrastructure, techUK

Chris Hazell

Programme Manager - Cloud, Tech and Innovation, techUK

Josh Turpin

Senior Programme Manager, Telecoms and Net Zero, techUK

Cloud Computing Programme activities

The techUK Cloud Programme ensures the UK stays at the forefront of cloud adoption and is a single point of contact for UK government and key stakeholders on issues impacting the development of the UK cloud market and industry. Visit the programme page here.