Making sure the lights do not go out tomorrow - The 350 million euro federal funding program for IT security

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In recent months, the German government has approved several funding programs to promote IT security in the country. The initiative "Digital. Secure. Sovereign." is aimed at IT security research and is scheduled to run for five years. With the "Digital Now" funding program, the German government also wants to support small and medium-sized enterprises and advance their technology.

What funding programs has the federal government decided on and what is their scope?

At the beginning of June 2021, the German government extended the funding program "Digital. Secure. Sovereign." by five years. At the same time, funding was increased from 180 to 350 million euros. These funds will flow into IT security research, among other things.

The "Digital Now" funding program supports digitization in small and medium-sized enterprises. In total, the Federal Ministry for Economic Affairs and Energy (BMWi) provides 114 million euros per year. The budget has been significantly increased again from 57 million euros in 2020. The "Digital Now" funding program will initially run until 2024.

Another component of the funding program from the federal government is "go-digital". Here, the focus is on supporting small and medium-sized enterprises. The program provides them with expert advice on digitization processes. The program has been in existence since 2017, and the first phase will expire on December 31, 2021.

Who is the "Digital Now" funding program for and how is it applied for?

"Digital Now" is a funding program for companies from the SME sector. These are companies with 3 to 499 employees. The funding is not limited to specific industries, so any company can apply. The federal government funds digitization projects, such as investing in ERP software. Part of the application must be a digitization plan that clearly states which systems the investment will go into, what the current status of digitization is, and what goals the company is pursuing with the modernization.

There is a dedicated website for the application, which is set up at https://digital.jetzt/. Since September 7, 2020, small and medium-sized companies have had the opportunity to apply for funding. This is still possible up to and including 2023.

Concrete amount of funding via "Digital Jetzt".

Those who meet the requirements for the federal government's "Digital Now" funding program have the opportunity to receive support for investing in their own company's IT security and other digitization measures.

The funding rate is between 40 and 55 percent. This depends on various factors. The basic subsidy is 50 percent. Companies with fewer than 250 employees generally receive five percent more funding than companies with 251 to 499 employees. Applications received after June 30, 2021, will be subject to a ten percent reduction in funding rates.

With "Digital Now," the federal government is supporting a wide range of different investments. These do not necessarily have to flow directly into hardware or software. Further training for employees is also covered by the federal government's funding program. In total, medium-sized companies have the opportunity to receive up to 100,000 euros in funding. Half of this money is available if companies invest in IT security or the value chain. A maximum of 50,000 euros per company is available for other projects.

The "go-digital" funding program - scope and application process

This program is made up of three areas. These are digitalized business processes, digital market development and IT security. In these three modules, the Federal Ministry for Economic Affairs and Energy provides assistance to small companies. This takes the form of consulting services.

There is a list of authorized consulting companies that provide the support services to the companies. secion is also one of these consulting companies. These consulting companies take over the direct contact, submit the applications for the subsidies to the federal government and also act as a control body.

The "go-digital" program primarily supports smaller companies.

The limit for companies that qualify for "go-digital" funding is a maximum of 100 employees and an annual turnover or annual balance sheet total of no more than 20 million euros. The amount of funding is limited to a daily consultant rate of 1,100 euros. Up to this limit, the federal government covers half of the consulting costs incurred. Companies can take advantage of the subsidy for a maximum of 30 days, with a time limit of six months for the completion of the consulting work. As part of this consulting, the consultants help improve IT security in the companies, develop individual concepts for digitization or create strategies for setting up online trading and similar digital structures. The goal of the "go-digital" funding is thus to strengthen the digital infrastructure in small companies, through concrete, practical and individual solutions.

What are the goals and components of the federal funding programs?

The federal government's funding programs each pursue different goals and are also aimed at different target groups.

  • The goal of "Digital. Secure. Sovereign." is to drive forward key digital technologies in Germany. The funding program aims to help ensure that Germany is one of the technology leaders in the next mobile communications standard, 6G. This area is referred to as technological sovereignty and also includes technologies such as artificial intelligence or security-critical network components. The German government has recognized that cyber threats will be among the key security risks in everyday life in the future. For this reason, there is increased investment in IT security research, with "Digital. Secure. Sovereign." is one building block. The federal government cites autonomous driving as an example. The systems in these vehicles collect and evaluate vast amounts of data. Protecting this information is a high priority. It is also imperative that such autonomous controls are protected from tampering. Otherwise, the vehicles are exposed to cyber threats that, in the worst case scenario, cause accidents and disrupt traffic networks.

    For this reason, IT security research is looking into the field of quantum communication. The federal funding program supports research into this technology as well as the development of complete systems for data transmission in the field of autonomous and connected driving. Quantum communication promises to provide options for eavesdropping- and tamper-proof data transmission.
  • Starting in 2022, a research network on de-personalization and anonymization will be established with funding from the grant. The goal of this IT security research is to better protect the private data of German citizens. By anonymizing data and minimizing the collection of personal data, the federal government hopes to increase data protection. The research network wants to work out concrete ways to implement these plans.
  • IoT, or the Internet of Things, is also a topic in the federal government's funding program. Long-term goals include making IoT more secure in industry, critical infrastructure and the private sector. Cyber threats loom in the smart home as well as in industrial IoT scenarios. IT security research in this area is being specifically supported by funding. In the area of hardware, the funding program focuses on chip architectures. Here, investment is made in IT security research so that secured digital interfaces and standards are created in the area of supply chains. In this way, the initiative aims to ensure the security of systems through secured components.
  • Digital Now is an initiative for improving the competitiveness and future viability of medium-sized companies. One goal is to increase the level of digitization in small and medium-sized enterprises. Improving employees' IT skills and qualifications is also on the agenda. According to the German Federal Ministry for Economic Affairs and Energy, 52 percent of SMEs are only moderately digitized and 34 percent of these companies have no digital skills at all. The goal is still to improve the IT security of SMEs. The German government also wants to promote companies in structurally weak regions and new, digital business models.

Reasons for the federal government's support for digitization

Research Minister Anja Karliczek of the CDU gave her views on the federal government's initiative at the beginning of June 2021. In doing so, she provided insights into the goals and reasons for the federal government's funding programs.

On the one hand, the aim is to make the benefits of digitization accessible to small and medium-sized enterprises in particular. There is still a need to catch up in this area. The main reasons for missed opportunities in digitization are a lack of expertise and funding. That is why the subsidies are aimed precisely at these points. Small and medium-sized enterprises are given easier access to expert advice. At the same time, they receive financial support when they invest in digitization. On the other hand, the minister also mentioned the dangers posed by cyber threats. Not only companies are at risk, but also government institutions, the country's infrastructure and private individuals. According to the BSI, around 117 million new variants of malware appeared in Germany in 2020 alone, and over 24 million data records of Germans were freely available on the Internet. This is another reason why the German government is focusing on IT security research in the near future.

Conclusion

The German government is investing more in IT security research and providing funding over the next few years to drive digitization in small and medium-sized enterprises. Both points are important in preparing Germany for the challenges ahead. Cyber threats are already a serious reality today. They are already threatening our everyday lives, as targeted attacks on critical infrastructures such as hospitals or energy providers are on the rise. Ongoing digitization in all sectors, whether private, governmental or commercial, creates further points of attack. For these reasons, investing in IT security and IT security research are top priorities. The federal government's funding program is a step in the right direction - but not a panacea. Companies and organizations themselves also have a duty to implement existing IT security solutions.

Do you have questions about the federal funding programs? Contact us - we will be happy to advise you!

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