A scheme supported by the UK government to turn the country into a world leader in big data analytics technology has moved a step forward, as the five universities selected to lead the project have been announced.

Oxford, Cambridge, Edinburgh, Warwick and University College London will all participate in the development of the Alan Turing Institute, which will be headquartered at the British Library.

The institute has attracted government funding worth £42 million over the next five years and will seek to build on the UK's existing academic strengths to make the country one of the best places in the world for the analysis and application of big data and algorithm research – skills that will be in huge demand from companies around the globe in the coming years.

It was welcomed by business secretary Vince Cable, who said: "The Alan Turing Institute will attract the best data scientists and mathematicians from the UK and across the globe to break new boundaries in how we use big data in a fast moving, competitive world."

Each of the selected university partners will contribute further funding to the initiative. In addition, the Institute will seek to partner with other business and government bodies.

The project is being coordinated by the Engineering and Physical Sciences Research Council, which invests in research and postgraduate training across the UK.

Chief executive of the body Professor Philip Nelson said it will draw on the best academic talent in the country to advance big data analytics technologies and ensure individuals are given the necessary skills to make it a success.

"It will use the power of mathematics, statistics, and computer science to analyse big data in many ways, including the ability to improve online security. big data is going to play a central role in how we run our industries, businesses and services," he continued, adding: Economies that invest in research are more likely to be strong and resilient; the Alan Turing Institute will help us be both."