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During summer 2020, in the midst of the global COVID crisis, the UK government announced a commitment to boost the development of cyber and digital technologies. This goes hand-in-hand with the government’s commitment to investing 2.4% of GDP into UK R&D by 2027 (and 3% in the long term). As tax incentive advisers, we track the industries with R&D investment opportunities closely, and this piece gives an overview of the R&D speculations happening imminently across cyber and digital technologies.

Where is current cyber R&D spending?

Back in the beginning of 2019, Business Secretary Greg Clark unveiled funding of over £100 million available to new cyber security R&D projects. Allocated via the government’s Industrial Strategy, the money intended to facilitate the UK to become a “world leader” the combat of cyber threats to online services and digital-enabled products.

Some £70 million investment through the Industrial Strategy Fund will support research into the design and development of hardware so that it will be more secure and resilient from the outset. The government said that the aim is to ‘design out’ many forms of cyber threats by ‘designing in’ security and protection technology/solutions into hardware and chip designs, which it claims will ultimately help to “eradicate a significant proportion of the current cyber risks for businesses and services in future connected smart products”.

It adds that the best defence against cyber threats in the future will be solutions that can work independently and protect against threats even during attacks (i.e. work autonomously).

Promising a £10 million investment over the next four years, the government announced the Digital Security by Design award (SDbD). The government hopes to deliver the award to nine grant winners, in an effort to boost, prompt and sustain the development of new cybersecurity tech solutions across the UK. It also hopes that the sustained commitment to cyber that this financial investment affords will allow the winners to build upon and enhance innovative solutions to combat and manage hacking attempts.

What does R&D investment in cyber aim to achieve?

DSbD, led by UK Research and Innovation, has the primary objective of protecting remote access of digital systems by hackers. This is especially pertinent for protecting smart home security systems, autonomous cars, and personal devices – and preventing data breaches across the online world.

The nine winners will be expected to demonstrate the economic and societal benefits of their tech innovation, by creating a working example of their solution.

Following this announcement in July, digital secretary Oliver Dowden stated that: 

 “We have a world-class cybersecurity sector and together we are working hard to make sure the UK is the safest place to work, connect and live online. With government support, these projects will build cutting-edge, secure technologies that will give people and businesses further confidence in our digital services and help weaken the threat of cyber-attackers.”

It’s clear from this that the government is keen to support the cyber and digital industries, at least partially in order to combat the sustained and increasing threat of cyber attacks on UK organisations. Published in March, the government’s Cyber Security Breaches Survey 2020 report announced that the average cost of a cyber attack for a medium or large business is a whopping £5,220. It also revealed that 26% of charities and 46% of businesses have experienced cybersecurity attacks or breaches in the past 12 months.

Is R&D cyber and digital tech investment destined to increase or decrease?

This white paper highlights the fact that cybersecurity, specifically, continues to enjoy significant investment – partly due to the increase in number, severity and scale of cyber attacks and security breaches. 

Our business systems across the UK and internationally are having to respond proactively to the shoring up and securing of online assets. R&D in cyber and digital technologies is therefore likely to be heavily invested in, as our reliance upon digital solutions becomes more pronounced (and thus our capabilities to be injured by cyber-attacks becomes all the more wounding).

R&D funding is therefore likely to continue to increase, with the continued demand for more profound and concrete cybersecurity.