Industrial Strategy Sectors expand despite overall UK company population decline and fall in equity investment
The Barclays Regional Investment Map, which provides insights into UK company funding and growth, reveals a continued surge in activity across the UK’s Industrial Strategy (IS8) sectors, which now account for 1.35 million active UK companies.
According to new analysis from Barclays Eagle Labs and Beauhurst, the UK’s IS8 sectors; Advanced Manufacturing, Clean Energy, Creative Industries, Digital & Technologies, Financial Services, Life Sciences, Professional & Business Services, and Defence are powering ahead.
The total number of companies operating in IS8 sectors expanded by 4.10%, underlining their increasing importance as a driver of national economic growth and innovation, yet overall, new incorporations fell by 14.4% since Q3*– a pattern consistent with the typical slowdown in incorporations seen in Q4.
Equity investment into IS8 businesses also rose sharply, reaching £4.94bn in Q4. This was a 27% increase from Q3 despite a challenging national backdrop, in which total UK equity investment fell by 5.28% to £5.58bn.
Digital & Technologies remained the strongest IS8 performer, securing £3.06bn in equity investment in Q4, followed by Professional & Business Services (£1.67bn) and Advanced Manufacturing (£1.15bn).
Equity investment into Digital & Technologies was highest in London (£2.15bn), followed by the North West (£353m), where a number of high-growth digital companies drove regional performance.
Top three IS8 sectors – equity investment by region, Q4 2025 | |||
Region | Digital & Technologies | Professional & Business Services | Advanced Manufacturing |
London | £2.15bn | £1.32bn | £174m |
South East | £208m | £85.7m | £909m |
North West | £353m | £25.3m | – |
West Midlands | £26.4m | £1.78m | £17.3m |
East of England | £129m | £152m | £30.9m |
Yorkshire & Humber | £35.5m | £13.2m | £4.40m |
East Midlands | £4.61m | £5.95m | £2.00m |
South West | £75.2m | £44.1m | £3.50m |
Scotland | £41.0m | £6.69m | £2.43m |
Wales | £11.7m | £2.63m | £6.05m |
North East | £10.2m | £6.35m | £1.28m |
Northern Ireland | £12.3m | £3.65m | £53.7k |
UK Total | £3.06bn | £1.67bn | £1.15bn |
Although Defence attracted £215m of equity investment in Q4 – the lowest among IS8 sectors – the quarter marked a strong rebound, with investment rising by 195% compared to Q3. While activity remained concentrated, with seven regions securing Defence investment, the overall uplift signals growing confidence in the sector. As the UK accelerates its efforts to scale defence innovation, this increase highlights Defence’s strengthening strategic relevance and its potential for broader regional expansion.
Wales emerges as the UK’s strongest performing growth region
Wales was the only UK region to record growth in active company population in Q4, rising by 0.13% to 178k companies.
The country also posted one of the largest increases in equity investment, with funding rising by 396%. This increase was driven by a few larger fundraisings, meaning the percentage rise reflects growth from a low base. This growth was supported by strong activity in Digital & Technologies, where Welsh companies raised £11.7m, and in Creative Industries, a key contributor to Wales’ innovation ecosystem.
This strengthening pipeline of investment set the stage for an uplift in grant funding, driven by major public‑sector awards to organisations including Wrexham AFC – whose grants were directed specifically toward infrastructure and regeneration initiatives – and Cardiff‑based production company, Bad Wolf.
Abdul Qureshi, head of Business Banking at Barclays said: “What we’re seeing is a clear divergence in the UK economy. Many businesses remain cautious, but high growth, innovation led sectors continue to attract investment and expand at pace.
“That tells us two things: the UK remains a highly attractive place to build and scale ambitious businesses, and confidence follows opportunity. Supporting these sectors, alongside building broader SME confidence, with the right mix of finance, skills and long‑term policy certainty will be critical to unlocking broader growth across the economy.”
To support businesses to invest for growth, the Barclays Business Prosperity Fund is available for new and existing Business Banking customers and UK Corporate Banking clients across the UK to apply for lending and refinancing on existing projects. Businesses can find out more at: home.barclays/businessprosperity, and view the full Regional Investment Map at home.barclays/insights/2026/03/Regional-Investment-Map-Q4.
£22bn is the total amount of lending Barclays has available to lend and support business growth among Business Banking and UK Corporate Banking clients in 2026. Subject to normal lending assessment, status and application. Terms and conditions apply.