Planned UK investment by Cisco to target financial services, retail and 'internet of things'

The money has been set aside for venture capital investments into start-up businesses focused on the so-called 'internet of things', particularly those developing new technology with financial services, retail and healthcare applications, according to an announcement made by the company's chief executive after a meeting with UK prime minister David Cameron.

John Chambers said that the UK was "well on its way to becoming one of the top digitised counties in the world".

"We are pleased to make our next series of strategic commitments, totalling over $1bn, to support the next phase of the UK's digitisation plans," Chambers said.

"Since 2011 we have delivered over and above on every objective we set with government in our prior commitments – encouraging technology, innovation and entrepreneurship. Through the British Innovation Gateway initiative, we have supported the government's ambition to create world-class technology hubs across the country, generate jobs, diversify the economy and support sustainable growth," he said.

The British Innovation Gateway (BIG) was founded with $500m of investment from Cisco in 2011 as part of the 'Tech City' initiative, which was established by the UK government to encourage the development of east London as a 'hub' for digital start-ups. BIG operates a number of initiatives providing practical help, mentoring and advice to new technology firms with specific goals around innovation and growth.

The 'internet of things' (IoT) is a term used to describe the increasing digital connections and associated data flows between devices. It covers the likes of wearable technology, connected cars, 'smart' grids in the energy industry and the otherwise increasing connectivity of household items such as fridges and thermostats. The number of global IoT connections topped 1 billion for the first time last year, according to Verizon; and is anticipated to reach 5.4bn by 2020.

UK technology companies attracted a record level of venture capital funding in the first six months of this year, partly driven by the success of London's "thriving" financial technology industry, according to figures published by London and Partners at the start of July. The venture capital funding pledged by Cisco will target the company's own investment priorities in fintech, retail and healthcare and 'smart city' development, as well as innovative cybersecurity solutions, according to the company's announcement.

Cisco will also investigate further strategic acquisitions in the UK over the next three to five years as part of its promised investment, following recent acquisitions in wireless software, next-generation video delivery and cloud-based security technologies, according to the announcement. It is also planning further investment in its Cisco Networking Academy education programme, targeting students in the science, technology, engineering and maths (STEM) fields, with a focus on "redressing [the UK's] North-South economic imbalance", according to the announcement.

UK prime minister David Cameron said that the company's announcements were "great news for the UK's growing digital economy" and "a clear vote of confidence in our long-term economic plan".