Quantum Tech Programmes in Europe: Pioneering a New Era of Innovation and Competition
Quantum technologies, i.e. the targeted control of quantum mechanical effects and their technological use, represent a cutting-edge field with immense potential for disrupting various industries. While still in the early stages of development, innovative applications in both business and society are already emerging.
Different strands of quantum technologies have varying time horizons for development and anticipated impacts. Germany and the European Union (EU) boast a thriving landscape of start-ups and established companies in basic quantum technologies and components. Products in quantum sensor technology, quantum materials, and quantum communication have already reached market maturity. However, widespread adoption of quantum computing is expected in the medium to long term, with significant potential for development.
In the realm of quantum computing, the United States stands out as the global frontrunner in superconducting quantum computing, with major players like Google and IBM leading the charge. The country boasts the highest number of quantum technology start-ups, significant venture capital investment ($2.2 billion between 2001 and 2021), and a substantial presence of academic research groups. Government funding, distributed among various national agencies and organizations like NIST, NASA, and DARPA, totalled approximately $0.9 billion in 2022.
China, on the other hand, has announced a staggering $15 billion in state funding for quantum technologies, eclipsing all other nations. While specific structures and strategies are less transparent, China has already made significant strides in quantum communications.
In the EU, substantial public funding of $7.2 billion has been earmarked for quantum technologies. For example, the EU’s Quantum Flagship program was founded to expand scientific research on quantum technologies and boost EU quantum industry. Several member states have their own quantum initiatives that supplement and cooperate with the various EU initiatives. For example, Germany has allocated EUR 2 billion for research and development.
The allocated funding in the EU over the coming years is significantly higher than public funding in the USA ($7.2 billion in the EU compared to $ 1.9 billion in the USA). This massive effort by the EU is being made to catch up with the USA and China and to close a gap regarding the more limited availability of venture capital in the EU, particularly in comparison to the USA. This could be one of the reasons why the EU lags behind the USA in the number of quantum technology start-ups it has produced, despite the EU leading in scientific publications in terms of quantity. To try to close this gap, Germany founded Sprin-D, an agency dedicated to start-up funding. Unlike previous initiatives that support start-ups with Seed and Pre-Seed funding, one of Sprin-D’s objectives is to be an active player in funding rounds that have only been serviced by venture capital so far.
This quantum race is not only about business and being front-runner in new markets. The anticipated advancements driven by quantum technologies are poised to significantly impact information security, touching communication, cryptography, and cybersecurity. To maintain sovereignty in this evolving landscape, each state must adeptly navigate these emerging technologies. Thus, funding in quantum technology can also be regarded as matter of national interest.
Before looking into details, let’s start with the basics. The term “quantum technology” can be loosely divided into four categories:
- Quantum computing and quantum simulation
- Post-quantum cryptography and quantum communication
- Quantum sensor technology and quantum metrology
- Enabling technology
Each of these fields of technology have different prospects and challenges which of course affect funding opportunities and funding cycles. To better understand the funding strategies taken by public and private investments, we briefly outline four sub-categories of quantum technologies below.
"The quantum technology industry has evolved significantly over the past few years. Major strides in hardware (superconducting qubits, trapped ions) have been made, and more industries (finance, pharmaceuticals, logistics) began exploring quantum solutions. Quantum sensing and cryptography are also gaining importance. Today, quantum technology is still in its infancy, but the industry is rapidly growing, with ongoing breakthroughs, such as in scalability, error correction, and software development. Many see it as a transformative field with wide-ranging implications for computing, communication, and beyond. Patents in the quantum technology industry have grown rapidly in recent years, reflecting the increasing commercial interest and technological advancements. At Mewburn Ellis, we witness this momentum firsthand and are proud to have a remarkable team of experts in quantum technology, with deep knowledge of both the technical aspects and commercial requirements for securing valuable IP rights in this exciting field."
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