Would it be cost effective to remake an older design but with updated materials and electronics. My original idea was an updated harrier knowing its shortcomings updated electronics, materials as a cheaper option than an f35.
For something like the Harrier, I doubt it would be cost effective.
Avionics/electronics and the associated systems integration is one of the really costly (and difficulty, hence the costly bit) areas of weapons development. For an aircraft like the Harrier with STOVL capability, it would be a bit more difficult than normal since either the complicated manual system would need to be built, or a more automatic system.
Less complex aircraft, which are intended for a somewhat different operating environment might be viable however. I specifically have a new/updated version of the A-1 Skyraider in mind for CAS/COIN operations which might have some ability to use PGM's, but little requirement for datalinking or some of the other avionics which could complicate the aircraft.