Why UK data sovereignty is the next competitive advantage for digital industries | Tech Radar
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Why UK data sovereignty is the next competitive advantage for digital industries
How UK data sovereignty secures innovation and competitive advantage
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Today’s digital industries face multiple challenges in effectively managing their data.
According to a poll of 3,700 senior leaders across 21 countries, three-quarters of respondents agree their organization is increasingly concerned about the geopolitical risks associated with storing and managing data with global cloud providers.
At the same time, cyber incidents are now the top global risk in 2025, according to Allianz, with high-profile cyber-attacks causing billions in losses and multi-week outages.
Managing Director, Northern Europe at Dassault Systèmes.
To help mitigate this, the UK’s Data (Use and Access) Act 2025 has now become law, and minimum security and resilience requirements will be introduced for data centers in the UK, along with growing EU data‑governance regulations.
While this will help to safeguard data, it also presents a new level of complexity for businesses to contend with.
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Ultimately, there’s a greater need for certainty around where data sits, who can access it and how it’s protected. Sovereignty has never been more important.
Why sovereignty is the foundation of data governance
We’re witnessing a crisis of trust in the global cloud. It has become clear, particularly through the lens of a complex geopolitical landscape with nation-state-sponsored cyber threats, that the idea of absolute safety in the cloud is compromised. While global cloud providers offer best-in-class capabilities, they aren’t appropriate for everything. At a national level, trust for these bulk cloud carriers has weakened.
The US Clarifying Lawful Overseas Use of Data (CLOUD) Act, which came into force in 2018, adds to the problem. The Act allows US authorities to access data from US-headquartered cloud providers or their subsidiaries, even if data is stored outside the US. While this is a particular concern for defense organizations, other industries with strategic national IP are also at risk.
According to Capgemini research, the threat posed by potential exposure to extra-territorial laws and/or the possibility of data access by foreign governments owing to a vendor’s location of origin was cited as a concern by 68% of public sector respondents. Ultimately, without sovereign control over data, governance isn’t guaranteed.
According to the defense and security think-tank, the Royal United Services Institute (RUSI): “The threat posed to UK businesses and economic and national security by IP theft and IP loss is huge, and the UK’s approach needs immediate attention.”
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When you consider the cost implications, it’s easy to see why. According to the UK government’s Cost of Cyber Crime report, the cost of cybercrime to the UK is £27 billion per year. Of this, £9.2 billion comes from the theft of IP from UK businesses.
At the same time, the UK has the challenge of keeping pace with agile competitors in complex, multi-partner programs. The Chinese can develop things much faster than we can in the highly regulated UK and EU industries. We can’t keep up. They can develop a new platform and have it in service in years, and it takes us decades.
The UK’s most innovative sectors (defense, aerospace, clean energy and life sciences) depend heavily on cloud-based collaboration. The challenge, therefore, is enabling cross-border collaboration without leaking UK-developed IP.
A single misplaced control system can cascade across the entire supply chain. Sovereign cloud gives UK businesses the control and assurance they need.
With single-tenant environments enabled by the sovereign cloud, each customer gains a dedicated virtual space, so there’s no hyperscaler-style multi-tenancy. This provides an additional layer of safety and security. Ultimately, the sovereign cloud is designed to maintain the agility, elasticity and performance of public cloud, but without the cross-border exposure.
Pioneering businesses are already recognizing it as the gateway to next-generation cloud: BCG analysts expect sovereign-cloud infrastructure as a service (Iaa S) spending to leap from US
First is the sovereign data location. UK-only residency and UK-only personnel access prevent unwanted jurisdictional access. The sovereign cloud assures that you are subject to the laws of your own country.
The second is transparent access control. Single-tenant UK-only environments allow full visibility of who can access data and when, supporting transparent access control for high-risk sectors like defense, energy and critical infrastructure. Transparent access control is implemented through adherence to recognized frameworks like NIST 800-53, which guides access control policies, auditing and monitoring.
This is particularly crucial at a time when the UK Ministry of Defence (Mo D) is shifting from audit-first to “secure by design”, which means defense organizations must prove compliance and accept liability. Similarly, energy and transport operators can leverage sovereign clouds to confidently demonstrate correct handling of sensitive data, while retaining control and accountability.
Companies that treat sovereignty as an enabler, not an obligation, are realizing key benefits. It helps with faster routes to market through secure, consolidated data. Many organizations across sectors work together in silos. This not only slows development cycles but raises security risk and increases cost.
It protects against disruption. A UK sovereign cloud ensures resilience against geopolitical disputes, sanctions or legal extraterritoriality. As a result, it provides operational continuity even if non-UK cloud regions experience disruption. This addresses the zero-risk expectation of UK defense customers.
The sovereign cloud removes the barrier that we can’t work together because the data is too sensitive. It unlocks secure multi-partner design, model sharing and manufacturing intelligence – in fact, the majority (60%) of organizations believe cloud sovereignty will make it easier to share data with trusted partners, while 55% believe it will offer more opportunities for collaboration.
In traditional multi-partner approaches, development cycles are hampered by fragmented tools and data. The sovereign cloud removes the security penalty for consolidation. It enables teams to collaborate on a single platform, while keeping data secure.
Innovation is only valuable when it is secure. For example, initiatives like the Global Combat Air Programme (GCAP) and the UK Mo D’s Tempest program have ambitious cost and performance targets, yet require exceptionally secure IP.
The sovereign cloud not only protects strategic national capabilities, but enables secure public-private collaboration, builds resilience into digital supply chains, and creates a platform that can be trusted by defense, energy, transport and advanced manufacturing alike.
As digital systems become the primary battlefield for competitive advantage, sovereignty ensures the UK’s intellectual property, designs and engineering breakthroughs remain protected and exploitable at home.
This article was produced as part of Tech Radar Pro Perspectives, our channel to feature the best and brightest minds in the technology industry today.
The views expressed here are those of the author and are not necessarily those of Tech Radar Pro or Future plc. If you are interested in contributing find out more here: https://www.techradar.com/pro/perspectives-how-to-submit
Managing Director, Northern Europe at Dassault Systèmes.
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