This is one of these grey areas where the clause is in the contract mostly to deter the employee from working in the same industry on the side, poaching clients, or using your position in the company to build a competing business on the side.
Assuming you are in tech / software development, that clause suggests you are not aloud, for example, to play in a band that is paid to perform at weddings at the weekend. That clearly isn't the intent of the clause.
Say you work in FinTech as a software developer, but at the weekend you want to make computer games. You are doing software development but it's in no way connected to your employment, again that is clearly not the intent of the clause.
Say you work in a specific industry, FinTech, Gaming or something, and you have an idea for a development tool that would aid people in your line of work, but isn't something that would be a "product" that your employer would make themselves as it's not their core business. It may be the kind of tool that your employer may purchase to make development easer, or to use in their backend. Then you should speak to them, pitch the idea, most good employers are likely to be happy for you to work on that sort of side project, especially if you let them use it for free or at a discount.
The closer your side project becomes to your day job the more likelihood you should speak to your employer first. If they are difficult about it, un justly, then it's an indication that it may be time to move on and find a new employer.