How the UK’s Modern Industrial Strategy addresses glaring imbalances by shining a light on accountancy
How the UK’s Modern Industrial Strategy addresses glaring imbalances by shining a light on accountancy
The government’s Modern Industrial Strategy quietly elevates accountancy from a back-office function to a cornerstone of economic growth and technological trust. With the sector outpacing wider GDP growth, Duncan & Toplis CEO Damon Brain asks: is the profession ready for its new role as a "frontier industry"?
Few government publications in recent memory have highlighted the accounting profession’s importance as clearly as the UK’s Modern Industrial Strategy.
Released alongside a suite of sector reports this summer, the 10-year plan identifies professional and business services as ‘growth-driving sectors’ with accountancy, audit and tax being ‘frontier industries’ – firmly positioning accountants as a vital strategic partner that are crucial for the nation’s growth.
This is arguably the only piece of recent guidance that sees the sector for what it is: architects of assurance and enablers of sustainable progress. After all, without the services from accountants and business advisers to decipher data and manage finances responsibly, growth would remain just a buzzword.
In this vein, it’s reassuring to see the Strategy explicitly naming accountancy, audit and tax as the unseen infrastructure on which future competitiveness will depend.
The timing is, of course, quite apt. Businesses are contending with persistent inflation, a raft of regulatory reforms and technologies which are evolving at speed; far faster than the frameworks which govern them. Against this backdrop, the profession’s steady, evidence-driven approach is exactly what the UK needs.
The figures underscore that point clearly. The accountancy sector contributed a whopping £33.3 billion to UK gross value added (GVA) in 2024, growing at a compound annual rate of 2.6% between 2015 and 2024. This may not sound overly sizable, but when contrasted with the (comparatively scant) 1.3% growth for the wider economy during the same period, it’s a stark reminder that the profession isn’t merely keeping pace with national productivity; it is visibly outpacing it.
A ‘frontier’ industry: Accountancy is the backbone of an economy in transition
The Industrial Strategy, at its core, recognises that professional and business services are vital to what it calls the UK’s ‘frontier industries’. Collectively, these services already represent over 12% of national GVA and employ roughly 20% of graduates in England, according to government research. For a single sector to employ a fifth of the nation’s newly-qualified graduates is no small feat.
Indeed, for a nation seeking sure but stable growth after years of economic turbulence, these numbers go beyond simply stating statistics; they solidify the sector as the connective tissue of an economy in flux.
In this sense, the government’s ambition is clear: to ensure that by 2035, the professional and business services sector has doubled its global value and cemented the UK as the world’s most trusted adviser. Accountancy will be a central cog in that ambition, helping businesses measure what matters, manage the associated risks and tangibly translate strategy into solvency.
Technology as a catalyst for trust and transformation
It has to be said that the Industrial Strategy’s most striking passages are those which concern technology. Automation, data analytics and AI are already reshaping the fundamentals of professional advice, but what’s emerging now is a new market in AI assurance – i.e. the independent validation of algorithms, models and decision systems.
The UK’s AI assurance market is currently worth over £1 billion, yet government-commissioned analysis suggests it could grow to over £6.5 billion by 2035 – making it one to watch with keen interest and unceasing scrutiny. Such expansion would generate revenue, yes, but more importantly, it could categorically redefine what accountants do. The profession’s established hallmarks, like the independent verification of facts, are the same qualities that responsible AI is purported to depend on.
In tandem with the rise of emergent technology sits another transformation: sustainability reporting. The government has voiced its intention to consult on new UK Sustainability Reporting Standards (UK SRS), which would be based on global frameworks developed by the International Sustainability Standards Board. In time, these may become mandatory for economically significant entities. As businesses adjust, accountants will be the ones quantifying carbon, assuring emissions data and turning environmental commitments into measurable performance.
Of course, it bears noting that AI growth and sustainability are fundamentally opposed, given the intense water and electricity demands AI data centres rely on. A recent government report clarifies as much, stating that ‘Global projections indicate that AI’s water demand could reach billions of cubic metres annually, posing a substantial threat to water security worldwide and, critically, within the United Kingdom’. This tension reinforces why accountants must be at the heart of decision-making, balancing technological advancement with environmental accountability.
Regulation, too, is ever-evolving. Plans being laid out to transition the Financial Reporting Council into a strengthened audit regulator signal a future of more transparent corporate reporting, and one with (hopefully) more proportionate oversight. The aim, which in this case is to cut administrative costs by a quarter while improving governance, will decisively demand both efficiency and integrity from those charged with implementation at an operational level.
The accountancy imbalance and the need for greater regional resilience
The Industrial Strategy also acknowledges a critical detail that can often be overlooked: the glaring geographic imbalance that professionals across the regions know all too well. Around 40% of accountancy businesses are located in London and the South East, while smaller practices elsewhere face persistent recruitment and investment challenges. For areas like the East Midlands, where Duncan & Toplis supports thousands of businesses, this is both a hurdle and an opportunity.
Similarly, the Strategy points out that a staggering 80% of accountancy businesses in the UK consist of just four or fewer employees. With more than 400 highly-trained advisers supporting businesses and individuals across the country, sector specialists like those at Duncan & Toplis will prove themselves as being absolutely invaluable.
However, regardless of size or location, long-term success for the sector will hinge on its ability to deeply embed digital skills, attract (and retain) top-tier talent and invest in automation at a sustainable pace. The Strategy’s promise of targeted funding and skills initiatives could, if delivered, create the conditions for regional accountants to flourish as true partners in national growth.
From compliance to counsel – how accountants are becoming data-driven translators
Whether it’s advising on sustainable investment, validating AI systems as all-important human touch-points, or interpreting real-time financial data as it develops, the profession’s role will move further upstream in the decision-making process. Indeed, with AI processes proliferating at pace, accountants are fast becoming some of its most trusted translators.
For business leaders, this new industrial era offers an uncertain mix of ambiguity and ambition. While the landscape is evolving and the fundamentals remain, accountants will need to exercise sound judgment and firm ethical practices to ensure they stay ahead of lines in the sand. Lines that are being perpetually redrawn as data capabilities continue to expand and warp existing responsibilities in their wake.
The Modern Industrial Strategy may have turned the spotlight onto accountancy, but in a profession that rigorously upholds best practice, we are certainly not afraid of scrutiny.
This article is sourced from the following link:
https://accountancyage.com/2026/01/15/modern-industrial-strategy-accountancy-frontier-industry/
