Cisco will spend $1 billion on UK tech sector

Networking giant aims to spur IoT innovation and boost STEM skills

Cisco is set to invest $1 billion (650 million) to fast track the UK's digital development, investing in start-ups, buying British companies and encouraging STEM subject uptake among students.

The cash will pour in over the next three to five years, the networking firm revealed after a Downing Street meeting between its chairman, John Chambers, and Prime Minister David Cameron.

Business Secretary Sajid Javid, incoming Cisco CEO Chuck Robbins and UK & Ireland chief Phil Smith also attended the Number 10 meeting, with Cisco agreeing to spend $150 million (97.5 million) on IoT start-ups.

This portion of the funding will target entrepreneurs building IoT technology for retail, healthcare, financial services and smart cities, as well providing investment in cyber security tools.

Cisco will build on acquisitions in wireless software, video delivery and cloud security tools by setting aside an undisclosed amount for buying up UK firms.

But this announcement comes as people question why the UK's start-up scenes have not produced a company that has grown as big as Facebook or Google.

Some of the 650 million will go towards developing Cisco's Networking Academy education programme, in order to promote innovation and entrepreneurship and increase the number of pupils studying STEM subjects at school.

This will build on existing Cisco initiatives like IDEALondon and the National Virtual Incubator, which connects incubation centres, research facilities and academic institutes.

Announced a day after Chancellor George Osborne's budget revealed plans for a Northern Powerhouse, Cisco will spend money trying to improve the north of England's tech scenes.

Funding university collaborations, investing in skills and expanding its apprenticeship schemes around the country, Cisco also plans to double its London staff volume by creating 200 "high value" jobs and build a brand new office before the end of the year.

Prime minister David Cameron said: "This massive investment from Cisco is great news for the UK's growing digital economy and is a clear vote of confidence in our long term economic plan. It will create jobs and growth across the country, providing security for hard working people."

Cisco chairman Chambers added: "The UK is well on its way to becoming one of the top digitised countries in the world, and we're proud to once again activate new programmes and continue our deep commitment to partnering with the UK government."

The 650 million investment comes after Cisco committed to spend $500 million (325 million) in 2011, which it claims has helped contribute 3.25 billion in technology and manpower to the UK economy through initiatives such as the British Innovation Gateway (BIG), which concentrates on spurring innovation among SMBs.

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