Unleashing the power of data: redefining UK industrial growth

There’s a barrier stopping the use of AI to boost the economy. Government data that is essential to create game-changing LLMs is not yet AI-ready

By

Nigel Shadbolt,
The Open Data Institute

Published: 27 Mar 2025

The Spring Budget is expected to play a pivotal role in advancing the UK’s AI ambitions. If the government gets it right, it will be a significant step towards Britain becoming a global AI superpower.

Data has a significant role in every sector of the economy and will be central to the government’s growth objectives. Data underpins government operations and touches the lives of every citizen. For the AI Opportunities Action Plan to succeed, data must be leveraged in both the development of the industrial strategy and throughout its implementation. To unlock its full potential, data infrastructure should be recognised not just as a horizontal enabler but as a critical growth-driving sector in its own right, similar to advanced manufacturing or life sciences. This requires a fundamental shift in how we perceive, manage, and invest in national data assets. To facilitate this, robust data infrastructure, rolled out through the development and implementation of a National Data Infrastructure Roadmap, must be developed as part of Invest 2035: The UK’s Modern Industrial Strategy, as we highlighted last year in our response to the Invest 2035 green paper.

If we are serious about achieving ambitious economic growth, we will need to use data insights to monitor progress, barriers, emerging trends, and opportunities. A central dashboard aggregating real-time data from government, industry, and regional partners could enable policymakers to identify trends, such as the emergence of niche growth sectors or regional innovation clusters. These insights would allow for targeted interventions and investments. This will require not just using existing data sources but the generation of new data assets.

Advanced methodologies, such as network analysis, could reveal key relationships and patterns within innovation systems, highlighting how advances in one area can spark opportunities elsewhere. For instance, breakthroughs in renewable energy technology could catalyse growth in specialised manufacturing or logistics, revealing new opportunities for investment.

The government hopes AI will enable the public sector to “spend less time doing admin and more time delivering the services working people rely on.” The Alan Turing Institute has estimated that of the 143 million complex tasks performed by civil servants every year, approximately 1,200 person-years of work could be saved if even for each task just one minute could be freed up through AI-enabled automation.

Realising these benefits hinges on addressing a pressing challenge: the UK government’s data is not yet AI-ready. Our latest research, analysed LLMs’ knowledge of government websites and statistics. It revealed significant shortcomings in data quality, accessibility, and interoperability, especially regarding the thousands of datasets hosted on the government’s current data portal data.gov.uk. These deficiencies, which previous governments of all colours have let build up across the UK and over time, risk hampering efforts to maximise the productivity gains promised by emerging technologies such as AI. The government now has a chance to change that.

Public sector and citizen data can become more FAIR (Findable, Accessible, Interoperable, and Reusable) by adopting metadata standards like Croissant. Designed specifically for machine learning and AI applications, Croissant enables government datasets on platforms like data.gov.uk to be indexed by tools such as Google Dataset Search, significantly improving discoverability and usability. This will allow government data to achieve a higher degree of AI readiness by boosting interoperability and encouraging broader adoption by the AI community.

Driving innovation with smart data
The government must embrace the transformative potential of smart data schemes to drive innovation across the economy. By building on data portability, interoperability, and individual control principles, initiatives like Open Banking already demonstrate how these schemes empower businesses and consumers. Open Banking involves the process of banks and other financial institutions opening up data for anyone to access, use and share – such as product descriptions and branch locations – as well as the sharing of transaction and account data by bank customers to trusted third party organisations.

By expanding this model, smart data schemes could enable the secure and ethical flow of information across traditional sector boundaries, unlocking new growth opportunities. For instance, integrating financial data with energy usage or transportation data could catalyse innovative services that benefit consumers while driving economic activity.

To realise these benefits, smart data schemes require pan-sector standards and governance mechanisms. In turn, this necessitates the establishment of a new central authority to develop cross-sector standards, ensuring interoperability and reducing data silos. Additionally, the UK should actively engage with international initiatives, such as the Data Spaces we’re seeing in Europe, to ensure alignment with global standards and facilitate cross-border data flows.

Building the national data infrastructure
If we recognise that data infrastructure is a foundational layer of the economy, both an enabler and a sector in its own right, it becomes clear that it requires a comprehensive, 10-year roadmap supported by sustainable investment. A 10-year National Data Infrastructure Roadmap, backed by sustainable, multi-year funding from the Spending Review, could provide the stability required to achieve these ambitions.

Building on their work over many years, establishing partnerships with leading organisations, including the Alan Turing Institute, the Open Data Institute (ODI), the Ada Lovelace Institute, the UK Catapults, and more, will be critical in developing interoperable systems, open standards, and AI-ready datasets. Collaborating with these institutions can ensure the infrastructure supports a broad spectrum of innovation and economic growth.

To support AI innovation and adoption, the government plans to create a new National Data Library – a platform for managing and accessing public sector data. If this is going to be able to provide ethical and secure access to public data assets, it must be designed to be AI-ready from the outset. This includes implementing tried-and-tested data hygiene measures championed by organisations such as the ODI: adopting open, interoperable standards for safe data sharing, proactively addressing data gaps through iterative assessment, and instituting clear governance structures that balance innovation with public trust. Adopting a federated approach to assembling the various services needed. Our data-centric AI programme and recent white paper on building a better future with data and AI discuss these measures in detail.

Data is a national asset
The UK’s data economy is already significant, increasing its share of GDP from 6.5% in 2021 to 7.4% of GDP in 2023 – a higher proportion than any European country except Estonia. However, there is substantial untapped potential. Only 21% of businesses handling digital data currently analyse it for insights, and just 2% use it for AI or automated decision-making. Addressing this gap through coordinated policy interventions will be vital to ensuring responsible data sharing and access, improving business operations, and unlocking economic value. It will also need a sustained focus on building capability and trust while providing the technical infrastructure and incentives needed for change.

As data becomes increasingly central to business and strategy, we need to recognise its value as a national asset, with both social and economic value. Recognising data as an asset can create incentives for private sector investment. This is also important for public sector data assets, where the return on investment should benefit UK taxpayers.  If the data held within the National Data Library is recognised as a valuable national asset, sufficient funding for its maintenance and development would be more readily secured. This, in turn, would improve data quality, accessibility, and ultimately, its value for innovation and public benefit. To enable better investment flows into the sector, the government will need to partner with data research organisations like the ODI and accountancy bodies like the ICAEW (The Institute of Chartered Accountants in England and Wales) to develop globally aligned data standards and valuation mechanisms.

Data has and will continue to be critical in driving the UK’s economic growth and innovation. It must be a central part of the industrial strategy. Recognising data as critical national infrastructure – on par with roads and energy – is key. This data infrastructure can enable the successful implementation of the industrial strategy, driving growth across all sectors of the economy. By unlocking public sector data, empowering individuals with control over their data, and strengthening organisational data capabilities, the UK can ensure that data becomes a cornerstone of its economic future. With sustained investment and strategic planning, the transformative potential of data will be fully realised, securing the UK’s position as a global leader in its use of data. However, we will need to move fast to avoid losing ground in the highly competitive worldwide digital economy.

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