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UK priority sector market overview

Priority sectors

Aerospace and space

The UK’s aerospace sector is one of the largest in the world and continues to make a significant contribution to the UK economy, maintaining an annual turnover of $40bn on average.  

Similar to Canada’s aerospace sector, the UK focuses on high value engineering, innovation as well as advanced manufacturing and services.

The industry is also seeing the benefits of a closer industry-government partnership with joint funding going towards technological innovation.

Specific opportunities for Canadian aerospace companies are in areas that can support production of:

The UK’s space sector continues to grow, accounting for 5.1% of the global space economy. The UK has recently launched their National Space Strategy, setting out their long-term plans to strengthen the UK’s position as a leading space nation. This approach plans to boost private investment and capitalise on UK strengths such as satellite manufacturing.

A renewed focus on space exploration presents opportunities for Canadian and UK companies to partner on innovation.   

Agriculture and agri-food

The UK food supply chain employs 4.2 million people & generates over £115 billion of added value for the economy each year. The UK imports around 40 percent of the total food it consumes and is reliant on both imports and its agricultural sector to feed itself and drive economic growth.

In 2021 the UK was Canada’s largest export destination within Europe for agri-food products. 

Top exports from Canada are:

The UK is a priority market for wine exports and there is interest in craft beer and spirits.

Key trends in the UK include plant-based foods, vegetarian/vegan, convenience/snacking. E-commerce and online grocery shopping is continuing to rise.

Arts and cultural industries

In 2020, the Creative Industries directly contributed CAD $172.1 billion to UK GDP. In 2021, creative industries employed 2.3 million people in the UK, representing 1 in 14 jobs. Over the past decade, creative industries have grown at a rate of 1.5 times that of the wider UK economy and contribute $181 billion in gross value added annually.  

In June 2023 the UK Government announced the Creative Industries Sector Vision backed by $129 million in new investment with the aim of growing the sector even further.

The UK was Canada’s fourth largest creative export partner in 2020 ($486.8M), as well as the second largest in Europe. Top subsectors for export to the UK are audiovisual (film/TV), music, and performing arts. Canada’s creative exports to the UK have grown 48% between 2010-19, with a 33.3% decline between 2019-20, during COVID. 

Defence and security

The UK’s defence sector generates $40bn in revenue. It is the second largest defence exporter in the world.

Defence and Security Equipment International (DSEI) is one of the largest defence tradeshows in the world and offers an excellent opportunity for Canadian companies to promote their defence products and services to the UK and other foreign militaries.  

The UK’s security and resilience sector generates over $30bn annually. It covers a wide spectrum of sub-sectors, ranging from cyber security to products and services that address terrorism threats and all other aspects of national security.

Education

The UK remains home to over 150 higher education institutions, and is well-regarded for the quality of its education-system at all levels.

The UK presents an increasing number of opportunities for Canadian institutions looking to develop international partnership and recruitment strategies. 

As the UK’s education sector has shifted post-Brexit, UK students continue to look abroad and Canada remains a top-ten destination for study, presenting low-cost, high quality study options with clear and desirable post-graduation visa pathways.

For UK higher education institutions seeking to diversify international partnerships, Canada provides unique mobility options and world-renowned R&D infrastructure. 

Approximately half of all EdTech investment in Europe is in the UK, making it the 4th largest EdTech space globally. 

Energy and clean technology

In 2021, Canada’s energy sector directly employed more than 264,000 people, indirectly supported over 369,500 jobs and accounted for approximately 9.7% of nominal Gross Domestic Product (GDP). Energy exports totaled CAD $154.3 billion, while imports reached CAD $42.6 billion. The sector in the UK accounted for 2.5% of Gross Value Added (GVA) and directly employed 175,000 people in 2021.

Energy continues to be a key driver for trade, investment, and innovation in Canada and the UK, with both countries undertaking a fundamental transitions towards a low carbon future. To drive this transition, both countries have legislated net-zero targets by 2050. The requirement to drastically reduce emissions and achieve decarbonisation targets is creating significant commercial opportunities for clean technologies. Canada-UK trade in environmental and clean technology goods and services reached CAD $724.3 million in 2021, with Canada exporting CAD $406.4 million in environmental and clean technology goods and services to the UK. 

Since 2021, the UK has released multiple policy documents setting out pathways to decarbonisation across industry committing to reduce emissions by 78% by 2035 (compared to 1990 levels). Additionally, there are ambitious targets in place, including the ban on the sale of petrol and diesel vehicles by 2030, and a fully decarbonised electricity system by 2035.   

Over the past decade, government support and private sector investment has resulted in the UK developing the 2nd largest capacity of offshore wind in the world. Currently at just over 13.6 GW of operational offshore wind capacity (enough to power 7.5 million homes), Britain’s Energy Security Strategy, published in April 2022, increased ambitions to 50 GW deployed offshore wind by 2030, including 5GW of floating offshore wind.  

In May 2023 the UK Government announced a target to increase solar capacity to 70GW by 2035. Currently there is just over 14 GW of solar deployed. The transition to intermittent renewables is bringing with it significant changes to grid infrastructure requirements, increased demand for energy storage, and other supply chain opportunities. 

The path towards decarbonising the electricity system and banning petrol and diesel vehicles is also driving the UK’s approach to critical mineral supply chains.  The need to build resiliency and ensure secure and stable supply chains is top of the UK government’s agenda with the UK releasing a Critical Minerals Strategy in 2022.  In March 2023, Canada and the UK signed the Critical Minerals Supply Chain Dialogue. 

Key additional areas of opportunity are: 

Financial and insurance services

The UK has one of the largest financial industry sectors in the world, ranking second behind New York in the World Financial Centre rankings. 

The UK influences capital deployment and foreign direct investment (FDI) across global markets and other UK economic sectors domestically. 

This is through all investment vehicles such as:

The UK has a robust professional services market that supports the financial services sector in the areas of: 

The UK’s single regulatory body, supportive government, large innovation ecosystem, and a highly educated and diverse workforce has resulted in a thriving financial technology sector.

The fintech sector is the second largest globally after the US with key strengths in Open Banking, payments, challenger banks, lending, credit, personal finance and wealth, insurance, sustainable finance, insurance and blockchain applications.

The fintech sector is well supported by venture and corporate capital.

Information and communications technology (ICT)

Technology (ICT) businesses are at the heart of the UK economy with a turnover of $312.8bn while sustaining 1.6m jobs.

With 30 significant technology clusters across the UK, there are significant opportunities for Canadian exporters, especially for innovations in:

Technology adoption at UK Corporations and Government has evolved ICT supply chains to undertake:

Canadian technology companies possessing strong capabilities that meet the UK’s needs in these growing areas of digital transformation can play an important supply (or partnership) role and should consider the UK market for export development.

Infrastructure/building products and services

Canada and the UK have a shared commitment to infrastructure as a foundation for economic growth and social cohesion, and both have made this central to their respective post Covid-19 recoveries. The National Infrastructure Strategy provides a long-term perspective for the sector, including over CAD $1.1 trillion in projected investment over the following ten years. The pipeline is updated annually through the Infrastructure and Construction Pipeline. Infrastructure and construction is also a key part of the UK’s effort to decarbonise its economy. The UK’s withdrawal from the European Union and its Single Market has top areas of opportunity including: 

Life sciences

The UK is home to one of the world’s strongest and most productive life science economies and a significant market for medical devices, Health IT and related technologies. The UK Life Sciences market has been evolving over the past few years providing both challenges and opportunities for Canadian companies.

As health and social care spending continue to rise, opportunities across these sectors exist for innovative Canadian companies to export to the UK market. Companies that facilitate independent living, distant monitoring and diagnosis as well as enabling patients to be cared for outside the usual primary and secondary care pathways will benefit from upcoming government investments and initiatives across the UK regions. 

The laws governing drug discovery pathways and clinical trials are currently under review with a view to altering these in order to make UK more competitive globally and an even greater hub for conducting research and development. The experience of the UK regulator during the pandemic has set expectations high for an overhaul of human clinical trials process as well as related approval routes.     

The aim is to make Britain an attractive investment location for pharmaceutical companies, for raising capital and for conducting research and development through to human trials. 

Canadian companies that are already using UK as a launch pad into the rest of Europe will likely benefit from such changes, but those looking for new investments and a faster route to market should be on the lookout for upcoming changes. 

Water and Waste Water 

The UK water sector is unique with both potable and waste water controlled by 26 privatized water utilities operating in geographic monopolies.  Utilities are subject to high levels of regulation through OFWAT the government regulator who set water rates often dependent on utilities ability to improve their performance levels across a range of indicators on a five-year cycle.  This has pushed utilities to proactively seek innovations to improve their business and operations.  The industry has identified four key themes for this: 

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