The Severn Valley: a delightful rural area of the UK, stretching from Worcestershire to Shropshire, and featuring such delights as an historic steam railway, quaint market towns, and er… a cyber security nerve centre.

Yes, this unassuming corner of England is fast becoming the cyber crime command centre, with seven local companies benefiting this week from £500,000 of government money to carry out research and development into data protection technologies. It’s part of the Launchpad competition, announced at the end of last year by the UK government’s innovation agency, the Technology Strategy Board (TSB).

Actually the definition of the Severn Valley is stretching things a little, as the companies are based on both sides of the River Severn, stretching to Malvern, Cheltenham, Gloucester, Bristol, Newport and Cardiff. However, 14 per cent of the UK’s cyber security companies are located within this area.

The TSB will provide the financial backing and business support, and will help the selected companies collaborate to develop new technologies and techniques to combat cyber crime. The idea is also to promote the region as a specialist centre and to encourage new businesses.

“Countries that can manage cyber security risks have a clear competitive advantage,” said Universities and Science Minister David Willetts. “These innovative companies, backed by government investment, will ensure the UK has the technology we need to protect our data and take full advantage of this growth industry.”

According to the latest report from the Department of Business Innovation and Skills, the cyber security market in the UK is currently worth almost £2.8 billion, and is forecast to be worth over £3.4 billion by 2017.

“Cyber security technologies are emerging all over the UK, to meet the demand for network and data protection,” said Iain Gray, CEO of the Technology Strategy Board. “As one of the most buoyant and fastest growing segments of the IT industry, it is essential we help to facilitate its growth and development.”

Among the winning companies are a PixelPin which is developing a password security system based on visual images instead of text; and Montvieux, a developer of a new digital fingerprinting project that protects a company’s IPR and source code.

“Networking, clustering and knowledge sharing are essential to the success of cyber security industries, and concentrations of expertise can achieve much more than isolated companies,” added Gray. “The winners of this Launchpad are pushing the boundaries of innovation within this important market and by providing the winners with the necessary support, connections and expertise, we will help take these projects to commercialisation.”