The government will spend £30m a year for the next four years supporting digital businesses and its own digital organisations.
Innovate UK, the new name for the Technology Strategy Board, revealed in its Digital Economy Strategy 2015 to 2018 report that it will split the money between up-and-coming digital businesses and existing organisations.
These organisations are the Digital Catapult centre, the Open Data Institute and Tech City UK, which will split £15m between them each year for the next four years.
Meanwhile the other £15m will be spent on ‘digital innovators’ to help them grow their ideas quickly and see how the market reacts.
“We will help digital innovators in early-stage companies to articulate and develop their ideas, establish their businesses and make connections to potential partners, and lead customers in industry and government,” the report states.
“We will also help innovators in established companies across the economy to adopt digital solutions, and to learn from other sectors.”
The funding forms the backbone of the report's five key aims, which include helping digital businesses by providing technical and business expertise and supporting emerging ecosystems and platforms that could generate new ideas.
"We will support businesses developing interoperable infrastructure and software platforms and enablers that can be used by multiple client businesses, and encourage industry-wide common practice to broaden the market for their suppliers and their users," the report says.
Antony Walker, deputy CEO of TechCity UK, welcomed the government's funding commitment to the digital economy.
"It is good to see the fundamental importance of the tech sector being recognised for our long-term economic growth," he said. "Digital tech businesses across the UK are driving innovation, productivity and job creation."
The Internet of Things (IoT) is seen as a particular area where support is vital to allow emerging businesses with a killer idea to thrive.
"New business models, applications and services are emerging in energy management, e-health delivery, traffic management and more, and the added value of IoT services could reach as much as $2tr a year, with 30 billion objects connected by 2020."
The report is the latest in a series of government announcements aimed at bolstering the technology industry in the UK.
Plans were unveiled last week to entice US firms to site European HQs in the UK by promising low corporation tax and access to skilled staff.
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