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The electronics and ICT industry is an important element of the UK economy. Although its employment appears relatively small, accounting for one-thirtieth of all employment, more important is the level and the intensity of the R&D expenditure associated with the sector, and distributed across business, government and higher education sectors . However, there are several fault lines within the industry which make its treatment as a single cluster highly problematic. Firstly, there are very strong regional specialisations within the country, with regional clusters almost as important to understanding the industry as the concept of a national cluster. Secondly, there are significant gaps in the cluster, with a preponderance of defence electronics, and a predisposition towards communications and information services; certainly, the UK strategic electronics base is significantly narrower in terms of world-class firms than any of its major economic rivals. Thirdly, it is a very open economy, and has a great deal of inward investment, but this inward investment is has its own spatial division of labour following the indigenous geography of electronics clusters.

This short paper aims to provide an overview of the UK electronics cluster, to explain its key features and how their success has influenced UK cluster policy, which lies at the heart of current national competitiveness (industrial) policy. Central to this has been the peculiar UK national system of innovation (NSI) which has recurrently reduced the incentives for companies to invest across all industrial sectors. However, the main features of this system do not arise from successive sets of science policy, rather there is a distinctive culture towards innovation and finance which have had a significant influence on the industry as a whole, and the particular regional clusters.

This paper examines the legal and policy environment, and then explains a little of the history of the electronics industry in UK, in terms of corporate histories as well as the evolution of Government policies which have supported those firms; there are clear relations between particular policy regimes and particular geographical clusters within the UK.