The mood in the tech sector right now is one of cautious optimism. Investment is flowing, particularly in from the US, and there’s a growing sense that technology could finally be what helps drive the next phase of UK growth.
But there’s also frustration; a feeling that the politics of technology still hasn’t caught up with its economic and social importance.
After this year’s party conferences, there’s still no single story about where UK tech is heading. But there are clear signals emerging about the relationship between government, industry and big tech, and the political balancing act that will define the next few years.
The transatlantic tightrope
The UK’s tech economy is still heavily shaped by the US, and the tone of President Trump’s recent visit made that clear. The government knows that its growth plans rely on maintaining strong ties with American tech and investment, with little attempt to disguise that dependency. And for now, it’s working: US capital is set to fuel AI and infrastructure projects across the country.
But it leaves an uncomfortable question hanging over the sector: where does the UK’s own tech power actually sit?
Beyond a few standout players, we still don’t have domestic equivalents to the giants driving global innovation. That’s starting to fuel a more serious debate around digital sovereignty – whether Britain should have more control over its own data, infrastructure, and platforms, and what that would take in practice.
Digital ID: the new culture war
The surprise announcement on digital ID was the headline policy moment of the season – and the one that’s already dividing opinion. It wasn’t in Labour’s manifesto and Keir Starmer avoided the issue from the main stage, but it quickly became the lightning rod for debate across tech, politics, and the media.
Supporters see it as long overdue: a practical step to modernise public services, streamline data sharing and give citizens more control over their information, and ultimately about delivering better outcomes in services like improving NHS waiting lists. Critics – particularly but not exclusively on the right – frame it as overreach, recalling the failure of Tony Blair’s ID card scheme and warning about privacy, costs and state control, with concerns about where data will be stored and whether the scheme would actually be able to tackle the problems it claims to – like illegal immigration.
What’s interesting is how fast it’s become a cultural flashpoint. For some, it represents a new era of digital governance. For others, it’s a symbol of creeping bureaucracy. But within the tech sector itself, the reaction has been relatively calm. With digital IDs already widely used and accepted across Europe, there’s broad acceptance that a UK digital ID is inevitable – the question is whether the government can deliver it in a way that earns public trust and avoids a backlash.
AI regulation: coming soon?
If digital ID dominated the conversation, AI regulation was notable for its absence. Many expected more clarity by now. Instead, we’re still in a holding pattern.
The UK risks being caught between two models: the EU’s heavily codified AI Act, and the US approach of letting innovation run ahead of regulation. The government wants to attract investment but also to show control – a difficult balance that’s left businesses unsure what the rules will be.
That tension defines much of the current mood. AI is the growth story that every politician wants to talk about, but few are willing to set hard policy around. Industry leaders are responding by investing anyway, but with one eye constantly on what government does next.
The quiet return of tech for public good
Away from the headline-grabbing debates, there’s a quieter story emerging – and arguably a more important one. Across both major parties, there’s a growing alignment around using tech to improve public services. Whether it’s data-driven healthcare, smarter procurement, or automating basic systems, digital transformation is being recast as the way to make the state more efficient, not just more digital.
It’s less glamorous than AI ethics or Silicon Valley visits, but this is where real delivery will happen. The most forward-looking parts of the sector are already pivoting towards partnership with government, positioning themselves as enablers of modernisation rather than just private innovation.
What’s next
Looking ahead, there are still big blind spots – the future of critical national infrastructure, a rising tide of cyber threats and concerns about how well the UK is protected, concerns over data access, and online safety barely featured in the conference debates. But those absences say as much as the speeches. The politics of tech are increasingly shaped by what government doesn’t say as much as what it does.
In the short term, expect to see more movement around digital identity, AI deployment in public services, and regional tech investment. Longer term, the UK will need to decide whether it wants to be a global rule-setter or a policy taker in a US-led system.
For now, the sector is upbeat but watchful. There’s real momentum but also a risk that opportunity turns into drift if policy doesn’t catch up with reality.
Our teams were at every party conference, understanding what the parties were saying about the tech sector.