How to become an entrepreneur

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In today’s rapidly evolving world, entrepreneurship has become an attractive career path for many people. In fact, in the UK alone, over 750,000 new companies are incorporated each year. The allure of creating something from scratch, being your own boss, and potentially reaping substantial rewards is understandably compelling.

But how does someone embark on this journey and become an entrepreneur? In this blog, we’ll explore the fundamentals of becoming an entrepreneur, from understanding the different types of entrepreneurship to identifying the key characteristics that set successful entrepreneurs apart.

What are the four types of entrepreneurship?

Entrepreneurship is typically broken down into four different types. Each of these types have their own unique approach and objectives and will suit different people in different ways.

Small business entrepreneurship

Small business entrepreneurship is perhaps the most common form of entrepreneurship – the latest figures show there are 5.5m small and medium-sized businesses (SMEs) in the UK, making up 99.9% of the total private sector business population.

Small business owners tend to have a local or niche target market by focusing on providing goods and services that meet specific needs. Some examples of this include restaurants, boutique shops, and service providers like plumbers or accountants.

Scalable startup entrepreneurship

Scalable startup entrepreneurship is characterised by a strong emphasis on growth and scalability. These entrepreneurs aim to build businesses that have the potential to grow rapidly and capture a significant market share.

Startups often seek external funding and employ innovative technologies or business models. Tech giants like Facebook, Google and Airbnb are prime examples of scalable startups.

Large company entrepreneurship (intrapreneurship)

Large company entrepreneurship, or intrapreneurship, involves individuals within an existing organisation who take the initiative to develop new products, services or processes. These ‘intrapreneurs’ display the same qualities as traditional entrepreneurs, but operate within the framework of a larger company. 

Intrapreneurship fosters innovation within a current workforce and enables existing organisations to stay competitive in a dynamic market.

Social entrepreneurship

Social entrepreneurship blends business principles with a social or environmental mission and is driven by a desire to create positive change in society by addressing issues such as poverty or environmental sustainability.

TOMS Shoes are a good example of social entrepreneurship as they donate a third of their profits to grassroots organisations which work to create an impact in mental health, access to opportunity, and ending gun violence in the US.

How do entrepreneurs make money?

One of the key motivators for becoming an entrepreneur is the potential for financial success, but the path to profitability can vary widely with the type of entrepreneurship you pursue and whether you need to seek external funding to get started.

Funding a startup

Starting a new business venture can have substantial upfront costs, particularly if it includes expenses like market research, product development, marketing strategies and office space.

To address these financial needs, entrepreneurs can explore the following:

  • Bootstrapping: This involves using personal savings and reinvesting revenue generated by the business to fund growth. This approach allows entrepreneurs to maintain full control, but can limit the speed of business expansion.
  • Angel investors: These are individuals who provide capital to startups in exchange for equity or ownership shares. They often bring valuable industry expertise and connections in addition to financial support.
  • Venture capital: Venture capitalist firms invest in early-stage startups with high growth potential and typically receive equity in exchange for funding.
  • Bank loans: Traditional business loans may be an option for entrepreneurs and are usually available as ‘secured’ (backed by collateral) or ‘unsecured’ (based on creditworthiness).
  • Crowdfunding: Entrepreneurs can raise capital by presenting their business ideas to a wide audience who will receive incentives if they financially contribute.

Maintaining a profitable business

Cash flow is key to success in entrepreneurship, so it’s important that once a business gets off the ground it continues to make money. 90% of startups fail because they run out of cash, with this in mind, it’s important for a new entrepreneur to consider how much it will cost to be able to generate the product or service being offered to ensure the end price is more than cash spent.

The ways a company can make money will depend on its business model, but can include:

  • Product sales: Businesses in retail and manufacturing will have revenue primarily coming from selling products. This method includes costs associated with product development, manufacturing, packaging and distribution, so entrepreneurs must have a competitive pricing strategy which will still generate a profit while taking these costs into account.
  • Service fees: Service-based businesses generate income by providing specialised skills or expertise. When determining pricing structure and profit margins, costs to consider will include acquiring necessary equipment, setting up a workspace, and investing in professional development or certifications.
  • Subscription models: Many modern startups, particularly in the tech sector, employ subscription-based models. This can require heavy investment in technology infrastructure, software development, and marketing to attract and retain potential customers.
  • Advertising and sponsorships: Entrepreneurs who create content, whether through blogs, podcasts, or social media, can monetise their audience through advertising partnerships or sponsored content. This model will have lower startup costs compared to others, but may require a larger time investment to promote your platform to attract advertisers.
  • Licensing and royalties: Some entrepreneurs generate income by licensing their intellectual property, such as patents, trademarks, or copyrighted content, to others in exchange for royalties. This won’t be applicable to all industries and can incur legal fees associated with securing and protecting intellectual property rights.

What are the characteristics of an entrepreneur?

To thrive in the world of entrepreneurship, it is vital to cultivate key traits that set successful entrepreneurs apart. 

Some of these characteristics include:

  • Visionary thinking: Entrepreneurs possess a clear vision of their goals and are forward-thinkers, always looking ahead.
  • Resilience and perseverance: Setbacks are inevitable, but successful entrepreneurs view them as learning opportunities and press forward.
  • Adaptability: The business landscape is ever-evolving. Being adaptable allows entrepreneurs to pivot when necessary and seize emerging opportunities. 
  • Effective communication: From in-person networking events to pitching to potential investors, communication skills are vital for building relationships and securing partnerships.
  • Hard work and dedication: Starting a business demands unwavering commitment and a willingness to put in the hours.
  • Customer-centric focus: Understanding and meeting the needs of your target audience is paramount. A successful business is one which provides value to its new and existing customers.

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What is continuing professional development?

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Ever-evolving, competitive work environments mean professional development has become a necessity for professionals across all industries.

Advancing knowledge and learning new skills should be a priority for business leaders, managers and individuals. As the European Commission report, currently, more than 75% of EU companies say they have difficulties finding workers with the necessary skills – and only 37% of adults undertake training on a regular basis.

How do you stay ahead of the competition in your career? Is there more you could be doing in terms of addressing personal skills or knowledge gaps?

What is continuing professional development?

The Chartered Institute of Personnel and Development define continuing professional development (CPD) as ‘learning experiences which help you develop and improve your professional practice.’

As well as building on existing strengths, CPD focuses on identifying and addressing any gaps in your skills, knowledge and competencies. It may require upskilling – or reskilling – and is an ongoing process that should be factored into an individual’s professional career regardless of age, occupation oreducation level. CPD doesn’t follow a one-size-fits-all approach; rather, it varies depending on the person, their specific needs, and their career goals.

While the activities will differ from person to person, CPD often look like:

  • peer coaching, mentoring or shadowing
  • joining training programmes
  • studying for formal professional qualifications or accreditations
  • joining professional bodies
  • networking
  • volunteering
  • reflective practice
  • online learning and CPD courses
  • giving presentations or developing course material
  • attending relevant industry events, seminars and webinars
  • reading relevant articles, books or journals
  • participating in professional networks, forums and special interest groups.

CPD falls into three different categories:

  1. Structured CPD (also known as active CPD/active learning) is proactive and participation-based. An example of structured learning is a marketing professional studying over a period of time for a Chartered Institute of Marketing (CIM) qualification.
  2. Reflective CPD (also known as passive learning) is generally not participation-based. An example of passive learning is an entrepreneur listening to podcasts, reading case studies or watching e-learning material about securing start-up finance.
  3. Informal CPD (also known as unstructured learning/self-directed CPD) is unstructured and generally doesn’t adhere to a specific timeframe. An example of self-directed learning is a healthcare assistant reading the latest health sector-specific news or research.

Any learning activity which supports your professional development can be considered CPD. However, the best approach is to tailor the type of learning you are doing to enhance your current practice and add value to the service you provide..

Why is continuing professional development important?

Why should we all be harnessing the power of CPD?

While CPD is undoubtedly an investment in yourself, its benefits extend far beyond personal growth and carving out competitive advantage. It has the potential to help all of us to stay effective, relevant, and adaptable in our roles and careers.

Regardless of sector or job role, CPD is instrumental in terms of:

  • adapting to changing demands
  • career development and advancement
  • ensuring knowledge and skills are up-to-date and informed by the latest thinking
  • professional skills
  • increased confidence
  • effective decision-making
  • better job performance.

For business leaders, creating a culture and community of lifelong learning and lifelong learners among employees – that transcends roles, levels and departments – is hugely beneficial. As well as being important in terms of employee performance and motivation, it can support legal compliance, help your business increase its competitiveness, raise brand profile and, ultimately, boost profits and business sustainability.

What is the CPD cycle?

How can we ensure CPD remains regular and delivers measurable improvements?

While appraisals are a great time to benchmark and reflect on achievements, challenges and development objectives, CPD should not be limited to bi-annual or annual formalised check-ins.

The CPD Certification Service regard the CPD cycle as ‘a practical tool that helps structure your annual CPD plan, learning objectives and outcomes so that the training you undertake is suitable and worthwhile for your ongoing CPD requirements.’

The CPD cycle provides a framework of five logical and systematic steps:

  1. Identify needs. What knowledge or skill gaps need addressing? Conduct a straightforward needs analysis or assessment to highlight any learning needs. You’ll need to identify existing weaknesses, as well as any skills, topics or areas that will support your future professional expertise.
  2. Plan. What objectives need to be set to structure your learning? This includes looking at the specific development activities, skills and subject areas that align with overall development needs and goals, and designing a CPD plan to meet these goals.
  3. Act. Are you ready to engage with the development plan and CPD activities? The learning tasks – for example, completing online courses or attending educational workshops – will depend on your needs analysis and objectives.
  4. Reflect. How successful were the CPD learning activities? Examine what you learnt, how knowledge has increased, the skills you’ve acquired, and where the learning could be applied in your existing practice.
  5. Implement. Have you applied your new knowledge or skills in your role? Using your learning in practical ways completed the CPD cycle.

The CPD cycle can benefit all of us with its well-rounded approach. In addition to providing a structured learning path, it offers clearly defined goals and promotes the inclusion of relevant, diversified learning methods.

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What is a local government officer?

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Local governments exist to meet the complex, evolving and diverse needs of citizens.

Their broad remit – which includes education, environment, health and social care, town planning and urban design, transport, tourism, culture, housing, and human resources – requires skilled, committed individuals who operate at local government level and ensure that everything functions as it should.

What is the role of a local government officer?

Local government officers ensure that practical decisions and actions related to local government policies and procedures – made by local councillors – are enacted. Their other main role is to ensure that local public service provision and delivery is efficient and cost-effective. Local government officer roles can fall within corporate, front-line or support services.

According to the Local Government Association, local government officers are distinct from civil servants in that they ‘have a duty to support the whole council, not just the cabinet.’ As such, they must remain neutral in terms of political groups and affiliations.

The role often requires interaction with numerous stakeholders including the public, local councils, local authorities, administrators, councillors and specialists. While some roles are more committee-based and far-reaching, others are embedded within specific functions and departments.

What are the responsibilities of a local government officer?

Specific duties of local government officers working in the UK will vary depending on the department they work in, the nature of their position, and the needs of the local community they serve – as well as their level of responsibility and seniority.

In its broadest sense, a local government officer’s role and oversights may encompass:

  • Public engagement, including disseminating information, addressing concerns, and gathering data and information.
  • Service delivery, including ensuring that local services such as housing, social services, education and public transportation are operating efficiently.
  • Community development, including revitalisation and redevelopment projects, infrastructure improvements, and initiatives to boost economic development.
  • Policy development, including implementing strategies, policies and actions in line with community requirements and concerns, conducting research, analysing data, and making suggestions and recommendations.
  • Cross-agency collaboration, including non-profit organisations, local community groups, councils, and government agencies in order to join forces and tackle complex, multifaceted issues.
  • Regulation and compliance, including conducting inspections, enforcing rules, and organising permits to help businesses and citizens to comply with legal requirements, council policies and regulations.

The government’s National Careers website states that the day to day responsibilities of a local government officer often include:

  • managing and evaluating projects
  • writing reports and briefing papers
  • dealing with enquiries and giving advice
  • presenting information in meetings
  • supervising administrative work and managing clerical staff
  • keeping records
  • preparing and managing contracts
  • dealing with other agencies
  • managing budgets and funding.

For many local government officers, work is predominantly desk based. However, certain roles may require estate visits, site visits and inspections.

How can I become a local government officer?

If you’re committed to ensuring equal opportunity service delivery and enhancing the lives of others, you might be suited to a local government officer position.

Whichever route you opt for, to be successful in a local government officer role, you’ll need to demonstrate a range of skills:

  • interpersonal and communication skills
  • stakeholder management
  • an ability to use initiative
  • business administration, management and project management skills
  • collaboration and teamwork
  • negotiation
  • organisation, prioritisation and planning
  • adaptability and resilience
  • problem solving and analytical skills.

What are the career prospects of a local government officer?

By its nature, local government is a diverse profession – and so too are the future career prospects it offers. There is no ‘one’ set career path; rather, the breadth and scope of its remit enables employees to follow their developing interests and strengths.

After gaining greater understanding of the sector and building on existing skills and experience, those working in local government officer positions may wish to pursue senior management, administrative and leadership roles. You’re also not limited to one function or department; another advantage of local government’s wide reach is the option to transfer between different areas – for example, moving from social services to environmental policy to social work to town planning. Others also choose to transfer from local government to other areas of the public sector organisations such as voluntary organisations, government departments and agencies, and the National Health Service.

In terms of average salary, those starting out in the role can expect to earn around £17,500, and more experienced officers around £37,000.

If you’re interested and want to find out more, websites such as jobsgopublic and localgovjobs have more information about job vacancies.

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Understanding taxation systems and how they support public sector budgets

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Public services and social welfare are among the most essential components of any modern society. But these services require funding, and this funding typically comes from taxation – the lifeblood of a nation’s public sector budgets.

Understanding the intricacies of taxation systems and public sector spending is important for anyone working in – or with – the public sector because of their far-reaching implications. For example, they influence:

  • policy-making
  • economic stability
  • citizen well-being

In the United Kingdom – along with the majority of other nations – they support a comprehensive range of services, from healthcare and education to infrastructure and defence. 

Taxation in the United Kingdom

The UK government relies on a variety of taxation sources to generate revenue for funding public services and other government activities.

These sources can be broadly categorised into direct and indirect taxes:

  • Direct taxes are the taxes on people’s income or wealth.  
  • Indirect taxes are the taxes people pay when purchasing certain goods and services.

What are the main sources of tax revenue for the government?

For the UK government, the main sources of government tax revenue include:

  • Income Tax. Income Tax in the UK is a progressive tax system, which means that higher earners pay a larger portion of their income through a higher rate of tax. Income taxpayers typically have their taxes deducted directly from their earnings – known as Pay As You Earn, or PAYE. Some people, such as those who are self-employed, can pay their taxes through a self-assessment process at the end of each tax year.
  • Value Added Tax (VAT). VAT, an indirect tax, is added to most goods and services at the point of purchase and is paid by both individuals and businesses.
  • Corporation Tax. Private sector businesses in the UK – including foreign companies with offices or branches in the UK – are required to pay Corporation Tax on their profits.
  • National Insurance. National Insurance contributions help fund the National Health Service (NHS) and other social security programmes, such as state pensions and statutory maternity pay.

Other examples of tax liabilities and accruals in the UK include:

  • The Stamp Duty Land Tax, which is paid by people purchasing homes or land in England and Northern Ireland. There is also the Land and Buildings Transaction Tax in Scotland, and the Land Transaction Tax in Wales.
  • The Aggregate Levy, a tax that applies to any commercial extraction of rock, sand and gravel.
  • The Capital Gains Tax, which applies to money made from sources such as selling personal possessions worth more than £6,000 (excluding cars), property and shares.
  • Excise Duty, which is a tariff paid on items such as alcohol and tobacco products.

It’s also worth noting that taxation systems can change over time. For example, a new tax proposed in 2021 – the Health and Social Care Levy – was later reversed by a new chancellor of the exchequer in 2022.

What are the reasons for taxation and government spending?

Taxation and government expenditure are what ensure that the public services people rely on – healthcare, education, transportation, and so on – are available, well-maintained and expanded as needed.

“Without them [taxes] it would be impossible to pay for the country’s defence services, its health, welfare and social services, its schools and universities, and its transport systems,” explains the UK Parliament website. “In addition to these huge areas of expenditure, financial support is given to other vital areas such as industry, sport, heritage and culture.”

Tax systems also enable governments to influence economic activity and initiatives. For example, the UK government offers a Research and Development Tax Relief scheme of subsidies for businesses that “work on innovative projects in science and technology.” By offering incentives and exemptions like these, governments encourage businesses to develop new technologies, advance scientific discovery, create new jobs, and drive wider economic growth.

What is the difference between a progressive and a regressive tax system?

A progressive tax system such as the UK’s income tax places a higher tax burden on higher earners. For example, in the 2023/24 financial year, there is a 20% tax threshold on UK earners’ income between £12,571 and £50,270, and a 40% tax on income between £50,271 and £125,140. 

A regressive tax, on the other hand, is a tax rate that doesn’t change regardless of where – or to whom – it’s applied. These taxes tend to disproportionately affect lower-income people because a larger percentage of their income is taxed. 

What is the difference between hypothecated and non-hypothecated taxes?

Taxation can also be categorised as hypothecated or non-hypothecated.

Hypothecated taxes, such as National Insurance contributions, are earmarked for specific purposes, while non-hypothecated taxes like income tax and corporation tax contribute to a wider revenue pool and offer the government more flexibility in allocation.

The public sector in the United Kingdom

The UK’s public sector is a collection of government services that require substantial funding – much of which comes from taxation.

Recent figures show that total public sector spending, when viewed as a percentage of the UK’s gross domestic product (GDP), is around 45%.

What are the key areas of public spending?

According to the government’s public spending statistics published in May 2023, the biggest areas of public expenditure in the UK include:

  • Social protection. Social protection is a category covering everything from housing benefit to pensions.
  • Health. Healthcare costs are always a significant area of public spending, and increased in the wake of the COVID-19 pandemic. The majority of health spending in the UK is overseen by the Department of Health and Social Care and helps fund the NHS.
  • General public services. This area has increased in recent years due to a significant increase in interest on public sector debt repayments.
  • Economic affairs. Recent examples of economic affairs spending include subsidising fuel and energy costs.
  • Education. Education spending primarily funds UK primary and secondary schools.

How are public sector budgets managed?

Public finances and decision-making in the UK must be managed prudently and transparently. Whether raising revenue through taxes or spending public funds, governments are required to outline new or amended financial plans while also seeking approval from Parliament before taking any action.

The central government is responsible for setting fiscal policy, tax policy, and allocating resources to government departments through its tax administration systems. Local authorities, meanwhile, also have budgets, and local governments manage services at the community level. 

Public finance oversight in the United Kingdom

The Office for Budget Responsibility (OBR) was created to oversee and scrutinise government finance in the UK. It is responsible for:

  • Providing independent economic and fiscal forecasts.
  • Assessing the sustainability of public finances.
  • Evaluating the government’s performance against its fiscal targets.

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Taxation forms the lifeblood of a nation’s public sector budgets. Learn about the intricacies of taxation systems and public sector spending in this article.

 

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Taxation forms the lifeblood of a nation’s public sector budgets. Learn about the intricacies of taxation systems and public sector spending in this article.

 

Progress your career in the public sector with our 100% online MBA Public Sector Management.

 

The fundamental role of government

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Throughout the twentieth century, many countries witnessed significant changes as the importance of the state grew and the role of the government evolved. In the wake of World War Two, nations the world over – Great Britain included – sought to rebuild in the aftermath of destruction, tackling the immense challenges facing industry, economy, infrastructure and society.

Now, in the 21st century, they continue to grow and evolve in both new and familiar ways. The pandemic saw national and federal governments enact stringent policies to contain the spread of COVID-19, the effects of which are still being felt by economies and communities.

What is the role of government?

The specific roles and functions of national governments vary depending on the political ideologies and societal characteristics of a given country. For starters, different governments will have various  approaches, priorities and orientations to the rule of law, including:

  • democracies
  • dictatorships
  • autocracies
  • oligarchies
  • constitutional governments.

Generally speaking, national and state governments are responsible for:

  • provision of public services and public goods – managing key expenditures to deliver healthcare, transportation, sanitation, education, development of infrastructure and much more.
  • economic regulation – ensuring economic stability, protecting consumers, upholding fair competition in the private sector, encouraging entrepreneurship and addressing deficits.
  • national defence – safeguarding the security and sovereignty of the country via national defence forces such as the UK Armed Forces.
  • law and order – keeping citizens safe by implementing and enforcing laws and security systems and establishing law enforcement bodies such as police forces.
  • protecting human rights – including individual rights and fundamental liberties such as freedom of religion or belief and freedom of speech.
  • international relations and diplomacy – upholding relations, partnerships, agreements and negotiations with other countries and nations.
  • protecting the environment – via policies which aim to tackle issues such as the climate crisis and environmental sustainability.
  • resource distribution – address economic disparities using wealth redistribution methods such as social welfare initiatives and tax revenues.

In the UK, there are various central government bodies and organisations, which have wide-ranging goals and remits. The range of their responsibilities and interests are broad, offering an insight into some of the critical aspects of society the government oversees.

In the UK, these include the:

  • Department for Business and Trade
  • Department for Culture, Media and Sport
  • Department for Education
  • Department for Energy and Net Zero
  • Department for Food, Environment and Rural Affairs
  • Department for Science, Innovation and Technology
  • Department for Work and Pensions
  • Department of Health and Social Care.

There is also local government, tasked with providing and managing vital services for populations and businesses in specific areas. Local government systems include schools, social and community care, housing, waste collection, business support and planning and licensing.

What is the difference between government and parliament?

According to the UK parliament website, ‘the government is responsible for deciding how the country is run and for managing things, day to day’ whereas ‘parliament is there to represent public interests and make sure they are taken into account by the government.’

The government is made up of the political party that wins the most seats at a general election, and consists of the prime minister, their cabinet, junior ministers, and non-political civil servants based in various government departments.

Parliament is formed of two Houses: the House of Commons and the House of Lords. Members of the Houses are eligible to speak on behalf of the public interest if they believe unfair treatment  has occurred or will occur at the hands of governmental agencies or departments. It is a requirement that government ministers attend parliament on a regular basis to engage in debates with other political parties, respond to issues, answer questions, and inform the Houses of important decisions.

What factors affect government?

A number of factors spanning political, economic and cultural contexts can all affect  government decisions at international, national and local levels.

Examples of factors that can influence and impact government include:

  • Political beliefs and ideologies, such as liberalism, conservatism, socialism and environmentalism, will influence how a government operates, the policies it develops and the areas it focuses on.
  • Economic climate, for example whether there’s high unemployment, a recession, inflation or slow economic growth, can significantly influence national budget expenditure and fiscal policies.
  • Public opinion, often expressed via polls, elections, protests and rallies, can impact governmental responses and actions.
  • Globalisation, which can impact international relations between governments, as well as issues such as trade, business and immigration.
  • Technology, in particular advancements, mean governments must take into account factors such as cybersecurity, data privacy and protection, and surveillance.
  • National demographics, from age to size to composition of a population, impact decisions made around aspects such as health provision, social services offerings, jobs and pensions.
  • Interest groups, who advocate on behalf of specific issues – such as the British Medical Association (BMA) lobbying the government to introduce the smoking ban in the interests of public health – can put pressure on policymakers and influence decisions and outcomes.
  • Legal frameworks, as well as constitutions, often dictate what governments can and can’t do in relation to the extent of rights and powers.

There are numerous other factors, including the country or nation’s historical context, the media, and world events – such as trade agreements, health crises and conflicts.

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Understanding the main components of government spending in the UK

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In the United Kingdom, government spending finances a wide range of public services, but it also plays an important role in the national economy, influencing its growth as well as its stability.

This is commonly known as Keynesian economics, a macroeconomic theory that was widely adopted after World War II, and advocates for government intervention in the economy – particularly during economic downturns. During the past century, Keynesian theory has helped shape UK fiscal policy, and today government spending includes several components including current and capital expenditure.

Areas of government spending

General government expenditure will typically fall into one of two broad categories:

  • Current expenditure, which covers day-to-day operational and administrative expenses. This spending is necessary to ensure the smooth functioning of public services and institutions.
  • Capital expenditure, which covers investments in assets, facilities, and infrastructure projects. This spending typically yields benefits over a longer period of time, and contributes to the improvement or expansion of public services.

Current expenditure examples

Essential public services

Public services are at the heart of UK society. These services range from healthcare and education, to law enforcement and defense. Some may be run by the central government, while others are organised through local governments and authorities. But all of them are made possible through government spending.

Social welfare programmes

Social security and welfare programmes are a significant area of current expenditure. These programmes provide vital support and social protection to people at different stages of their lives. For example, they fund statutory maternity benefits and state pensions, as well as unemployment benefits and housing assistance. 

These programmes can take many forms. For example, they may include in-person support, or they may be offered through financial support, such as subsidies, grants, or transfer payments that pay money directly to people, such as those who receive child benefits or a disability allowance.

Interest payments

Interest payments on government debt is another area of current expenditure. When the UK government borrows money to fund various projects and initiatives, it incurs interest obligations on this government deficit. 

Capital expenditure examples

Public investment in infrastructure

Government investment in infrastructure initiatives such as road construction, public transportation projects, and energy facilities, is crucial for stimulating economic growth. These projects create jobs, enhance productivity more widely, and improve the quality of life for the people of the UK.

Healthcare

Capital spending on healthcare is also significant, including investments in new hospitals, medical equipment and technology. These investments are essential for ensuring the long-term sustainability and efficiency of the healthcare system, as well as better health outcomes for UK residents.

Education

Capital expenditure in education includes building and renovating schools as well as providing educational resources and technology. 

How government funds are collected and allocated

When looking at public finances – both coming in and going out – governments have to balance public service requirements and allocations with responsible fiscal policy.

  • Taxation. The majority of government revenue is raised through taxation. For example, tax revenue sources can include a national income tax or corporation tax.
  • Inflation control. The government-owned Bank of England sets interest rates with the aim of managing inflation and keeping the cost of living stable. 
  • Forecasting. Accurate forecasting of government revenue and total expenditure is essential for prudent financial management. Economists and analysts use data and models to predict future economic activity, trends, and government finances, helping policymakers to make informed decisions. 
  • Prioritisation. The government works to prioritise its spending to address the most pressing needs first, and to achieve its policy objectives.

Looking at the bigger picture

When examining public expenditure, it can be helpful to consider public finances within a broader scope. For example, discussions about the UK’s public services are often mentioned alongside the UK’s gross domestic product (GDP), which represents the total economic output of the country.

Viewing government spending as a share of GDP – or specifically, a percentage of total GDP – provides insight into the scale and importance of the public sector within the economy. In the UK, this figure fluctuates each year – particularly during the COVID-19 pandemic – but has been recently hovering around 45%, highlighting the substantial role that the government plays in the country’s economy.

The UK government will also consider its place internationally and compare its public spending to other countries. 

“In per-person terms, the UK’s public spending is similar to that of Australia,” the UK Parliament explains in its August 2023 publication, Public spending: a brief introduction. “The UK is far from unusual in its spending among developed economies, either in the amount that it spends per person or relative to the size of its economy – its spending as a percentage of GDP is fairly typical amongst OECD (Organisation for Economic Co-operation and Development) members.”

However, it’s also important to look at the economy more generally and consider public finances within that context. For example, the UK is currently facing a number of financial challenges that could impact public finances:

“Post-Brexit uncertainty has declined somewhat due to the Windsor Framework agreement to resolve disputes around the Northern Ireland Protocol,” explains the International Monetary Fund (IMF) in a 2023 report. “Still, the economy faces several challenges. The post-pandemic recovery was disrupted by the sharp energy price shock due to Russia’s war in Ukraine; labour force participation has declined, mainly on account of rising long-term illness; and large policy rate increases – needed to arrest high and sticky inflation – have tightened financial conditions.”

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Why is cybersecurity important?

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Our modern, interconnected lives rely on technological advances and capabilities – from the way we bank and communicate with friends, to how we buy groceries and manage our homes.

The Internet of Things (IoT) has made this revolution of convenience, speed, access and application possible. With approximately 15.14 billion IoT-connected devices as of 2023, these technologies –such as our smartphones, tablets and laptops – are present in just about every aspect of our lives.

While this brings with it great benefits, such proliferation of tech – and our increasing reliance on it – also creates irresistible attack surfaces for hackers, threat actors and cybercriminals. Between 2022 and 2023, 32% of small businesses, 59% of medium businesses, and 69% of large businesses in the UK reported an attack or breach. With cybercrime on the rise, cybersecurity – and its role in preserving our data, infrastructure and privacy – is critical.

Why is cybersecurity important?

Cyberattacks and cyberthreats can have devastating, far-reaching consequences for businesses, individuals and wider society. Not only can attacks prove expensive, they also threaten information security, destabilise livelihoods and cause widespread disruption.

The importance of cybersecurity lies in its ability to protect against theft, loss and damage. Where it fails, cybercrime can have a number of outcomes:

  • Economic implications – As well as the theft of corporate information and intellectual property, cyberthreats can disrupt trading and damage systems. There can also be national security threats, where criminals target critical infrastructure such as payment systems, power grids and water supply systems in an attempt to sow chaos, or cause disruption by acts such as vandalising government websites.
  • Regulatory issues – Cybercrime targets all types of sensitive and private data, including personally identifiable information (PII), intellectual property, financial details and protected health information (PHI). This is not only risky from an identity theft and data theft perspective, but also breaches general data protection regulations (GDPR).
  • Reputational damage – Customers want to know their personal customer data is in safe hands. Breaches can lead to loss of current and future business, reduced competitive advantage, unfavourable media coverage and loss of trust in a brand.

Without a robust, considered cybersecurity programme, businesses of all sizes – and across all industries – are less able to defend themselves against data breaches.

What are the main threats to cybersecurity?

Hackers continually develop the methods used to breach network security and gain access our systems, devices and sensitive data – meaning cybersecurity professionals have the ongoing task of remaining one step ahead of them.

There are numerous common cybersecurity threats:

  • Malware. Malicious software – including spyware, ransomware, Trojans, viruses and worms – is used to infect computer systems, steal personal data or disrupt operations.
  • Phishing. In phishing attacks, individuals are tricked into revealing or sharing sensitive information. The attacks mimic legitimate entities – such as an email from a bank, an ad on social media or a text message from a relative – but are, in fact, social engineering scams designed to expose details such as login credentials or financial information.
  • Zero-day exploits. Vulnerabilities in software or hardware not known to the manufacturer or developer are targeted, leaving ‘zero days’ of defence until a solution or patch is developed.
  • Distributed denial-of-service (DDoS) attacks. During a DDoS attack, a provider’s website or network is flooded with traffic in a bid to render it slow or unavailable.
  • Man-in-the-middle (MitM) attacks. Also known as an ‘eavesdropping’ attack, criminals interrupt communications or data transfers and pretend to be the participants. From here, they can intercept data and information and also infect systems with malware.
  • Insider threats. Insider threats are not always malicious; often, issues of data security result from accidental employee actions. This can include data leaks, allowing unauthorised access or password sharing.

Other common threats include supply chain attacks, cryptojacking, misconfigured cloud services and cloud security settings and advanced persistent threats (APTs).

Identifying and understanding the type and nature of these threats is the key to mitigating them, which isexactly why talented cybersecurity experts are in such high demand across all global industries.

What can be done to protect against security breaches and attacks?

Effective cybersecurity measures help to defend our data, infrastructure, assets and livelihoods against a host of threats. Fortunately, there are plenty of ways in which organisations can minimise system breaches and protect against future attacks.

Safeguard against unauthorised access and other security risks by:

  • enabling multi-factor authentication
  • performing penetration testing to assess and identify vulnerabilities
  • developing regular updates and patches
  • using strong passwords
  • limiting and monitoring access
  • monitoring all devices connected to networks
  • installing firewalls and anti-virus software
  • using a virtual private network (VPN) and never connecting to unsecured or unknown Wi-Fi networks
  • encrypting data
  • configuring cloud systems and other key infrastructure correctly
  • training employees and other users on security practices such as avoiding phishing scams
  • making regular back-ups of data and ensuring its secure storage
  • establishing a disaster recovery/incident response plan
  • conducting employee screening
  • utilising automation tools for threat detection and monitoring.

As threats evolve, so too should cybersecurity practices, defenses and expertise. Security controls must be in place across every aspect of an organisation’s network and monitored proactively to stay ahead of malicious threats.

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Protecting against cybersecurity threats

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Within today’s hyperconnected digital landscape, cybersecurity threats have evolved to become a complex and ever-present challenge for individuals, businesses and governments. While the rapid advancement of technology has opened up unprecedented opportunities, it has also created a playground for malicious actors and cyber criminals who aim to exploit security vulnerabilities for financial gain, ill-gotten confidential information, or simply to inflict damage.

These cybercrime threats can compromise sensitive information – such as credit card details or passwords for email or social media accounts – cripple computer systems, and even jeopardise national security, so it’s essential to have robust security solutions in place and to stay vigilant against emerging threats.

Common cybersecurity threats

To proactively protect against cyberattacks , it’s helpful to understand the different types of cybersecurity threats – particularly the ones most likely to strike.

Malware

Malware is a blanket term for various types of malicious software, including computer viruses and worms, that infiltrate systems with the intent of causing harm. This may be done via malicious links in emails, hacked websites, infected files or programmes, and so on.

Phishing

Phishing attacks involve cybercriminals masquerading as legitimate entities to trick users into revealing sensitive data. While phishing scams will target a huge number of people, there are also attacks known as spear phishing, which target a specific individual. Phishing is a threat to organisational information security, but it can also lead to more personal consequences such as identity theft.

Ransomware

Ransomware attacks involve accessing, extracting, and encrypting a victim’s data in order to demand a ransom for its release. These attacks can target both individuals and high-profile organisations.

Spyware

As its name suggests, spyware infiltrates systems to gather information without the user’s consent. A type of malware, spyware can record keystrokes, capture screenshots and even access webcams.

Trojans

Trojan horse attacks disguise malicious code as legitimate software. Once installed, Trojans provide unauthorised access to the attacker through a system’s backdoor, and can lead to large-scale data breaches.

Denial of Service (DoS) and Distributed Denial of Service (DDoS) attacks

Denial of service attacks work to overload a target system or network with a flood of traffic, rendering it unavailable to legitimate users. DDoS attacks amplify this effect by using multiple sources, often malware-compromised machines known as bots or a botnet.

Man-in-the-middle attack (MitM attack)

During a MitM attack, an attacker aims to intercept communications between two other parties without their knowledge. This allows the attacker to eavesdrop within the conversation, alter messages or even inject malicious code into the communications.

Structured query language (SQL) injections

SQL injection attacks manipulate a database query through malicious code. If successful, attackers can gain unauthorised access to a target system’s database and critical infrastructure and potentially even destroy it.

Understanding the difference between a cyber attack and a cyber threat

A cyber threat is a potential danger. It’s a threat that could exploit a vulnerability in a system or network, but may not come to pass.

A cyberattack , meanwhile, is a threat brought to life – a vulnerability exploited in order to compromise a system, steal data, disrupt services or carry out other malicious activities.

The best protections against cyber threats

There are a number of safeguards available to both individuals and organisations that want to bolster their digital defences against cybersecurity risks. Many of these have become increasingly important in the era of remote working, where people are working away from the office and therefore away from their employer-protected IP address and internet or Wi-Fi services.

  • Patch and update regularly. Keeping hardware – including laptops and mobile devices – as well as operating systems, software apps, and Internet of Things devices (IoT devices) up to date is essential. Software updates in particular often include patches that address known vulnerabilities – known as attack vectors – and prevent attackers from exploiting them.
  • Require additional user authentication. Implementing stronger-than-average authentication measures adds extra layers of digital security and makes it more difficult for unauthorised parties to gain access to data and wider systems. Examples of additional user authentication include two-factor authentication, multi-factor authentication and biometric verification. 
  • Invest in endpoint security. Endpoint security solutions protect individual devices from a wide array of threats, such as malware. They provide real-time monitoring, threat detection and immediate response capabilities.
  • Bolster network security. Using security measures such as firewalls plays an important role in safeguarding computer networks. Firewalls act as a barrier between a trusted internal network and untrusted external networks, scrutinising incoming and outgoing traffic while filtering out malicious content and potential threats as needed.
  • Apply encryption measures. Encrypting sensitive data for transmission and storage ensures that even if data falls into the wrong hands, it remains unreadable.
  • Complete regular backups. Regularly backing up data and other critical information to secure locations, such as in the cloud, ensures that it is always accessible and can help mitigate the impact of ransomware attacks and data breaches. Regular backups also protect against events such as system crashes or human error. 

According to Microsoft, an effective cybersecurity programme “includes people, processes, and technology solutions that together reduce the risk of business disruption, financial loss, and reputational damage from an attack.”

So in addition to technical safeguards, it’s also important that individual people have a firm understanding of cyber threats and cybersecurity education more generally. Within organisations, this includes:

  • Comprehensive cybersecurity training for employees to ensure they can recognise phishing attempts, social engineering tactics and other deceptive methods used by cybercriminals and hackers.
  • Staying informed about the latest threats and safety measures.
  • Having a well-defined incident response plan in place to ensure that the business can respond swiftly and effectively to cyber threats, and minimise potential damage.

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What does a cybersecurity analyst do?

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Last year, 39% of UK businesses identified a cyberattack on their networks, operating systems and infrastructure, with the most common threats including phishing, denial of service (DoS), malware and ransomware attacks. Of this group, 31% estimated they were targeted at least once a week.

With cybercrime rates on the rise – and methods of attack growing in sophistication – businesses must take their data security more seriously than ever. As a direct result, the job outlook for cybersecurity professionals with the skills to guard against security risks and threat actors is positive. In fact, according to the U.S. Bureau of Labor Statistics (BLS) it’s estimated that job growth for cyber and information security analysts is projected to increase 35% from 2021 to 2031 – much faster than the average for all occupations.

What is a cybersecurity analyst?

A cybersecurity analyst is a computer science professional who helps design and implement security systems and solutions to protect a company’s computer networks from cyberattacks. These specialists act as a ‘first line of defence’ against hackers and cybercriminals who try to exploit system vulnerabilities, defending hardware, software and networks from malicious activity and closely monitoring IT infrastructure and assets.

What does the role of a cybersecurity analyst involve?

The process and specifics of preparing for, and responding to, cybersecurity breaches may differ depending on the workplace, organisation and sector – however, the general outline of an analyst’s role remains the same.

Security analysts spend their time managing software, monitoring network security, developing security plans, reporting on security, and researching trends and developments in order to keep themselves – and the companies they protect – up to date and ahead of any potential issues.

Further day-to-day tasks and responsibilities often include:

  •   identifying and resolving threats in order to protect information systems
  •   defining access privileges
  •   implementing, maintaining and upgrading security measures, such as firewalls and antivirus security software
  •   performing penetration tests
  •   monitoring security breaches and following incident response procedures
  •   assessing risks and suggesting/developing improvements
  •   conducting ongoing audits and assessments to detect inefficiencies and violations
  •   compiling security performance reports and sharing results with stakeholders.

Are there different types of cybersecurity analysts?

While all cybersecurity professionals aim to protect systems, networks and software from cyberthreats and data breaches – ensuring the private information of businesses and individuals is secure – there is variety within the field. As such, there’s plenty of scope to narrow your cybersecurity focus and role to an area that most interests you or suits your skill set.

Indeed list a number of positions that are similar to cybersecurity analyst roles:

  •   Computer forensic analyst
  •   IT security specialist
  •   Security manager
  •   Security engineer
  •   Security consultant
  •   Director of security
  •   Security administrator
  •   Information security analyst
  •   Security specialist
  •   Chief information officer
  •   Network security engineer
  •   Machine learning engineer.

How can I get a job as a cybersecurity analyst?

While undergraduate and Masters degrees are a common – and quicker – route into the profession, you don’t necessarily need to work in cybersecurity. Securing an entry-level IT role, and then working your way up and into cybersecurity – by way of experience and gaining industry certifications – presents a good alternative. Apprenticeships in cybersecurity are also an option. However, if you do have a degree in an unrelated subject and wish to secure a graduate-level role in the cyber field, a computer science Master programme that covers cybersecurity is ideal.

There are a number of specific technical skills you’ll need to work as a cybersecurity analyst or in cyber-related fields. These include:

  •   application security development
  •   network security
  •   cloud security
  •   risk and compliance auditing
  •   penetration testing
  •   threat intelligence analysis
  •   identity and access management
  •   mobile and remote computing
  •   communication
  •   problem-solving 
  •   leadership
  •   creativity.

Over time, your degree subject will be less important to potential employers as you gain relevant skills and experience that demonstrate your cybersecurity capabilities.Other ways of developing the skills and competencies required is to participate in a cybersecurity bootcamp, or undertake an internship to gain practical work experience.

Do I need cybersecurity certifications?

Whether you’re an entry-level analyst, want to upskill in a specific area to enhance your existing practice or land a certain specialised role, a cybersecurity qualification could be the answer.

Whatever aspect of the cybersecurity field you’re interested in, the following cybersecurity certifications could help:

  • Certified Ethical Hacker Certification, where ethical hacking skills and expertise are used lawfully and legitimately to enhance and assess company cybersecurity
  • CISSP Certification (Certified Information Systems Security Professional), which validates skills related to the design, building and maintenance of secure business environments using globally approved information security standards
  • CISA Certification (Certified Information Systems Auditor), is a globally recognised certification validating skills in the audit, control and security of information systems.

CompTIA Security have compiled a detailed list of other highly regarded, widely accepted cybersecurity certifications. There are online options, full-time and part-time learning models, practitioner-led and self-guided options available, depending on your needs and current commitments.

What is the average salary of a cybersecurity analyst?

With demand for specialists soaring in recent years, cybersecurity can be a lucrative career path with great job security.

The cybersecurity analyst salary varies depending on type of industry, specific job requirements, job location, and individual skills and experience. According to Prospects, starting salaries average between £25,000-£35,000, experienced and senior analysts earn upwards of £35,000 and in excess of £60,000, and managerial and leadership roles can command upwards of £70,000 on average.

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What is cryptography?

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Modern cryptography is a process used to keep digital communications secure, ensuring that only the intended senders and receivers of data can view the information.

This is achieved by using cryptographic algorithms and keys, and includes a few key steps:

  1. The user’s original information – known as plaintext – is encrypted into something called ciphertext, which will be indecipherable to anyone except the message’s intended recipients. 
  2. The encrypted message is then sent to the receiver. Even in the event of interception by an unintended recipient, the cryptographic algorithms will safeguard and protect data. 
  3. Once received, a key is used for decryption, enabling  the receiver to access the original message.

Why cryptography is important

It’s clear that cryptography provides vital data security, and this has become increasingly important in today’s interconnected world where data flows non-stop across devices and networks, and the confidentiality, integrity, and authenticity of information has become paramount.

“Cryptography is one of the most important tools businesses use to secure the systems that hold their most important data assets,” writes Forbes in a 2021 article about cryptography. “Vulnerabilities resulting from an absence of cryptography or having noncompliant crypto and unmanaged public key infrastructure (PKI) lead to business disruptions, data breaches and brand erosion. The average cost of a breach in the U.S. is $8.6 million, according to IBM and the Ponemon Institute, and mega-breaches can surpass a whopping $1 billion.”

Understanding the difference between cryptography and encryption

Cryptography and encryption are closely related terms, but they refer to distinct concepts. Cryptography has a broader scope, including the entire field of techniques and methods for securing information. Encryption, on the other hand, is a specific method  used within cryptography to transform data into an unreadable format for unauthorised users. 

Types of cryptography

  • Symmetric cryptography. In symmetric cryptography, the same secret key – shared by the sender and the recipient – is used to encrypt and decrypt. The single key method is efficient for securing data, but securely exchanging the secret key between parties can present a security challenge.
  • Asymmetric cryptography. Asymmetric cryptography, or public key cryptography, uses two different keys. The first is a public key, which is accessible to anyone, and the second is a private key, which is kept secret by its owner. Asymmetric cryptography and public key encryption eliminate the need to exchange secret keys, but are more computationally intensive than symmetric cryptography.
  • Hash functions. Hashing algorithms that don’t require a key. For example, they’re used for verifying passwords.

How is cryptography used in digital security?

Cryptosystems have several key applications, including:

  • Safeguarding sensitive information. Cryptography is used to encrypt sensitive data, such as credit card details and digital currencies and cryptocurrency, during transmission and storage. 
  • Enabling authentication systems. Cryptographic techniques ensure the authenticity of messages and the identity of the sender. This helps in verifying the legitimacy of the sender and detecting any tampering with the message. Cryptography also prevents non-repudiation, ensuring that the sender of a message cannot deny their involvement in sending it, because digital signatures provide evidence that the message was indeed sent by the claimed sender.
  • Protecting data integrity. Cryptography ensures that data remains unchanged during transit by generating what’s known as a hash value, which is a fixed-size string derived from the original data. Any alteration to the data will result in a different hash value, alerting the recipient to potential tampering.
  • Securing communications. Cryptography provides secure communications, particularly on websites. For example, SSL (secure sockets layer) and TLS (transport layer security) ensure that data exchanged between a user and a server remains confidential.

Cryptography: examples

Common examples of cryptography algorithms and systems include:

  • Advanced Encryption Standard (AES). AES, a symmetric encryption algorithm, is widely used to secure sensitive information. It’s employed in various ways, from securing banking transactions to protecting classified government documents.
  • RSA (Rivest-Shamir-Adleman). A prominent asymmetric encryption algorithm, RSA is often used for secure key exchanges and digital signatures on the internet.
  • Diffie-Hellman Key Exchange. The Diffie-Hellman method enables the secure exchange of cryptographic keys over an insecure channel.
  • Data Encryption Standard (DES). DES is a symmetric key cryptography algorithm that encrypts chunks of data in what’s known as a block cipher.
  • Digital Signature Algorithm (DSA). DSA algorithms are used to generate and authenticate digital signatures. 
  • Elliptic Curve Cryptography (ECC). ECC can create asymmetric keys more efficiently than RSA algorithms.

The future of cryptography

The future of cryptography is in quantum cryptography, with the hope it provides unhackable data encryption. But while quantum computing can be used in aid of cryptography, it’s can also be used against it:

“Quantum computers use a different computing architecture that can solve certain types of problems much faster than classical computers, including the mathematical problems used in some encryption methods,” explains Forbes. “As such, quantum computers have the potential to render current encryption methods vulnerable to attack, compromising the security of sensitive data. Thus, the threat becomes real when more powerful quantum computers are developed in the future, which could defeat commonly used encryption systems.”

Experts believe that some cyber criminals are already storing encrypted data now in the hopes of decrypting it once they have access to more powerful quantum computers in the years to come:

“It’s becoming increasingly common for data thieves to steal and store data until more powerful computers can decrypt it and present opportunities for espionage, blackmail or sale in the future.”

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Cloud computing: security risks and security measures

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Advances in cloud computing have revolutionised the ways in which businesses can operate. From data gathering and storage to interconnected, convenient working to fast scalability, they offer huge advantages that streamline processes, support flexible and sustainable growth, improve customer experiences, and boost competitiveness – among many others.

However, with more and more organisations relying on cloud-based technologies to conduct business – an estimated 94% of enterprises use a cloud service – it’s imperative that leaders invest in securing their systems against cyberattacks and other threats.

With cybercrime rates growing in tandem with widespread cloud adoption – tech giant Microsoft reportedly detects 1.5 million attempts a day to compromise its systems – companies are on the look-out for talented computer science and cybersecurity specialists who can help safeguard their assets.

What are the main security risks of cloud computing?

As well as being expensive, disruptive to business operations and damaging to brand reputation, cloud hacks can result in compromised confidential data, data loss and regulatory compliance failure. 

Whether it’s a public cloud, private cloud, multi-cloud or any other type, understanding the risks and security threats associated with cloud applications as a whole is critical. After all, an awareness of common risks ahead of time will help digital teams to better prepare for any eventuality.

Here are some of the most common security risks associated with cloud-based operations:

  • Unmanaged attack surface. The move to the cloud and an increase in remote work have fragmented attack surfaces, making it easy for attackers to find unmanaged assets with critical exposures. Each new workload that connects with these public networks presents a new, unmanaged attack surface.
  • Data breach. Data is the primary target of most cyberattacks – for example, internal documents that could sabotage a company’s stock price or cause reputational damage, and personally identifiable information (PII) and personal health information (PHI) which can lead to identity theft. Data breaches involve sensitive information being taken or compromised without the knowledge or permission of the owner.
  • Misconfiguration. Cloud service providers (CSP) – such as Amazon Web Services (AWS), Microsoft Azure, Google Cloud Platform (GCP), Oracle Cloud and IBM Cloud are numerous and diverse, with many organisations choosing to use more than one. This can bring with it a degree of risk, as different default configurations and implementations can lead to critical system vulnerabilities – which cybercriminals and hackers will exploit.
  • Human error. Human error can present a huge risk when building any business application, and ever more so in relation to hosting cloud resources. In fact, Gartner estimates that by 2025, 99% of all cloud security failures will result from some degree of human error. For example, users may use unknown or unmanaged application programming interfaces (insecure APIs), inadvertently creating holes in cloud perimeters and leaving networks and sensitive data resources open to attack.

There are, of course, any number of other security risks and cloud security threats: denial-of-service (DoS) attacks, malware, phishing, data leakage, cloud vendor security risk, unauthorised access, insider threats, limited visibility of network systems and many more.

How can cloud security issues be managed?

While risk cannot be completely eliminated, it can certainly be managed.

As well as choosing a cloud service provider wisely, the following risk management and risk assessment strategies will help reduce the risks associated with using cloud environments:

  • Cloud penetration testing. Proactive testing is an effective method to assess the cloud’s current security measures by attempting to exploit vulnerabilities. It may also indicate areas for improvement ahead of a real attack, such as reinforcing a firewall or boosting other security software.
  • Data security audit. How often are routine security audits conducted? Complete transparency regarding cloud security measures – including how effective they are at protecting personal data and files and how they are implemented – is key.
  • Contingency planning. Is a business continuity plan in place that details a strategy for protecting cloud data and systems in the event of an emergency – and how often is it tested? Are there regular backups of cloud storage? Emergencies will vary but should include events such as natural disasters and catastrophic cyberattacks.
  • Security training. Can your CSP provide training to help upskill staff and protect against potential security risks? Team members who understand how their employer’s cloud storage and data management system works – and what the best practices are, such as enabling two-factor authentication and limiting access controls – will be better prepared to avoid attacks on their personal data, information and files.

Organisations should not be scared of using cloud software, but they should understand the risk and ensure the right risk management strategies are in place. From this strong position, they can maximise the benefits of transformational cloud technologies and use them to drive the business towards its goals.

Where can I learn more about good cloud security?

IT and cybersecurity professionals can find out more about how to implement robust cloud security from three key international frameworks.

The International Organization for Standardization (ISO) provides checklists that can help with establishing new cloud systems and cloud infrastructure.he National Institute of Standards and Technology (NIST) presents new system frameworks and supports troubleshooting of specific problems. Cloud Security Alliance (CSA) offers operational standards and resources for auditing and vetting systems.

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What is infrastructure security in cloud computing?

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Society’s pivot towards cloud computing environments for work and personal use has occurred at pace over recent years. With work migrating to the cloud and businesses adopting a cloud-first approach to wider operations more generally, our reliance on cloud applications grows by the day.

Business leaders and computer science specialists must ensure that adequate cloud computing security is prioritised amid these rapid technological advances and transitions. It’s a concern for many, with 75% of businesses and 68% of cybersecurity experts pinpointing misconfigured cloud infrastructure as the top security threat.

What is cloud infrastructure security?

The aim of cloud infrastructure security is to protect cloud-based assets from cybersecurity threats. There are a number of challenges presented by modern cloud computing – from regulatory demands to inconsistent and patchy security policies – which cloud security frameworks make it simpler and easier to address.

Despite this, traditional tools and methods of network security still create critical gaps and vulnerabilities that hackers can leverage. Some of the key security challenges and risks associated with cloud networks include:

  •         data breaches
  •         visibility
  •         migration of dynamic workloads
  •         misconfigurations
  •         unsecured APIs
  •         access control/unauthorised access
  •         securing the control plane
  •         security compliance and auditing
  •         end user error and lack of security awareness.

The nature of cloud systems is that they are dynamic; cloud resources can be particularly short-lived, with many being created and deleted multiple times each day. As a result, each individual ‘building block’ in a cloud network must be robustly and systematically secured – though it is made more complicated by working practice shifts such as bring-your-own-device (BYOD) and remote working.

Cloud data is primarily stored in public cloud and private clouds, although other cloud strategies – such as multi-cloud and hybrid cloud – are also popular. There are four main cloud computing service models: infrastructure as a service (IaaS), software as a service (SaaS), platform as a service (PaaS), and serverless.

What are the components of cloud infrastructure security?

There are at least seven basic components that make up a typical cloud environment and underpin infrastructure security.earning the best practices of each can help to secure each individual element against security threats:

  1. User accounts. User service accounts provide access to certain areas of critical cloud infrastructure.If compromised, hackers can gain access to sensitive data across the cloud network. These new accounts often feature default settings with little or no authentication processes. Identity and access management (IAC) tools can help to reinforce security by tightly controlling account access and authentication, cloud configuration monitoring can auto-detect unsecured accounts, and account usage as a whole can be monitored to detect real-time unusual activity.
  2. Servers. While cloud settings are rooted in virtualisation, physical hardware (including on-premises physical servers, load balancers, routers and storage devices) is still required behind the scenes, in different geographical locations. Maximising server security relies on controlling inbound and outbound communications – as well as encrypting communications – using SSH keys, and minimising access privileges.
  3. Storage systems. Abstracted storage systems and virtualised resources can use automation for scaling and provisioning requirements. Common security measures related to cloud storage include removing unused data, blocking access where it is not required, classifying data by its sensitivity, using identity and access management (IAM) systems, identifying and tracking connected devices, and using cloud data loss prevention (DLP) tools.
  4. Networks. Cloud services and systems can make use of public networks and virtual private networks (VPNs) – known as a VNet in Azure and a VPC in Amazon. Best practices for networks include using security groups and Network Access Control Lists (ACL) to limit network access, establishing firewalls to detect malware and other suspicious activity, and deploying cloud security posture management (CSPM) tools.
  5. Hypervisors. All cloud systems are based on hypervisors, making it possible to run multiple virtual machines with separate operating systems. For organisations using private cloud systems, securing hypervisors is a critical responsibility. This means hardening, patching, isolating and physically securing any machines that use hypervisors to data centers. Additionally, securing hardware caches, monitoring development and testing environments and controlling access is required.
  6. Databases. Cloud databases – together with the applications and cloud servers they are linked with – are vulnerable to data breaches as they are easily exposed to public networks. Any database security strategy should include limiting network access, enabling database security policies, locking down permissions, ensuring end user device security, and hardening configuration and instances.
  7. Kubernetes. All cloud computing layers need to have protective defences in place. Kubernetes, an open-source system that supports containerised applications, states that there are four key areas where security controls must be in place: code, containers, clusters and cloud.

If not properly configured and reinforced by best practice, each component can present an attack surface for cybercriminals to target.

What’s next for cloud infrastructure security?

If there’s one certainty in the cloud security space, it’s that its constant evolution demands that business leaders and providers stay on top of developing trends and threats.

Experts predict an increasing focus on the use of cloud forensics and incident response, allowing cybersecurity specialists greater visibility over, and faster response to, multi-cloud, serverless and container-based threats. Any tools and strategies that support process automation and simplification are also welcomed, and considered fundamental in addressing skills gaps in the digital security space and reducing cloud complexity. Throughout this evolution and beyond, security teams must prioritise proactive vigilance in order to effectively protect systems and assets, and manage use and scalability sustainably and securely.

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