The UK government has partnered with Arm to develop chip technologies that are more resistant to cyber threats, backed by £36 million in funding.

The move kicks off the the next phase of the government’s Digital Security by Design initiative, which is also backed by Google and Microsoft.

Official figures say the average cost of a cyber-attack on a business – where a breach has resulted in loss of data or assets – has increased by more than £1,000 since 2018 to £4,180.

In addition to robust software, the government says innovative hardware and systems solutions are critical to defend advanced technology and our defence systems.

This project is aiming to prevent hackers from remotely taking control of computer systems as well as targeting cyber-attacks and breaches, meaning more businesses providing online services are better protected. It will also create new business opportunities and help boost productivity.

A further project, backed by £18 million government investment through the Strategic Priorities Fund (SPF), will tackle some of the dangers of the online world from privacy abuses and wrongful use of data like disinformation and online fraud.

The initiative will help provide solutions to some of the issues identified in the government’s Online Harms white paper, which sets out plans for world-leading legislation to make the UK the safest place in the world to be online. The project will help understand what businesses and individuals need to reduce the harm they are exposed to by using online platforms and will aim to develop more trustworthy technology.

This, the government says, will help to prevent incidents of online fraud, phishing emails, impersonating organisations online and viruses or other malware like ransomware, which cost the UK economy millions of pounds in lost productivity.

Business Secretary Andrea Leadsom said: “Cyber-attacks can have a particularly nasty impact on businesses, from costing them thousands of pounds in essential revenue to reputational harm.Cyber-criminals operate in the shadows, with the severity, scale and complexity of breaches constantly evolving. It’s critical that we are ahead of the game and developing new technologies and methods to confront future threats, supporting our businesses and giving them peace of mind to deliver their products and services safely. Investing in our world-leading researchers and businesses to develop better defence systems makes good business and security sense.”

Minister for Digital and Broadband Matt Warman added: “The government wants the UK to be the safest place to be online and the best place to start and grow a digital business. As these investments show, we are determined to create the right environment to foster our thriving digital economy while giving people renewed confidence and trust in online services.We will always be firm in our support for the UK’s tech sector. Thanks to our work with the UK’s world-leading academic institutions and our business-friendly environment, we are helping entrepreneurs use technology to improve people’s lives and find solutions to future challenges.”