by David Shaw Political renewal is evolving priorities in Europe, inside and outside the EU. The opening of IBM's first Quantum Data Center in Europe signals a new phase in quantum competition. Speaking at the launch of the new center, Olaf Scholz issued a rallying cry for those focused on building a quantum future based on collaboration and competition rather than national silos. How does Europe stand in the quantum race?
quantumcomputingreport.com/, Oct. 07, 2024 –
The vagaries of short term hype cycles aside, a wave of new technologies stand poised to define 21st century economies. The list varies: AI, quantum, bio-engineering, autonomy, space technologies and advanced materials typically figure prominently. Collectively known as deep tech, the technical uncertainties and potentially long timescales surrounding their development make these challenging areas, for policy makers and for investors.
Neither does the economic backdrop provide simplification. Deglobalization has seen a rise in economic nationalism. The challenge of climate change remains depressingly difficult to grasp. Geopolitical tension is increasingly spilling over into real regional conflicts. Migration is a political flash point.
Against this backdrop, countries in the West fear their economic lead is slipping, and traditional engines of growth are stalling. There is also no real consensus on policy responses. Can industrial strategy reignite a constructive spiral, or will it descend into destructive protectionism? Should it focus on supporting key technologies (see list above) or pursue more societal missions (specific objectives in climate, security or the environment)? How can the animal spirits of capitalism be harnessed to support this journey? Not just in funding startups, but also in intelligently steering the substantial funds needed to fund the scale-up of these technologies?
European countries in particular are waking up to the imperative of technology innovation to drive growth in an otherwise aging continent that simultaneously faces the major imperatives of decarbonisation and improving security. In a sweeping report on 'The future of European competitiveness', Mario Draghi has called for €800B per annum increased investment and a new innovation focussed industrial strategy for the EU. This envisages increased central EU coordination to mobilize the programme, ideally stimulated with new jointly issued EU debt. Elsewhere in Europe, Keir Starmer's new UK government has identified growth as its own number one objective.
There are headwinds. Cautious Northern Europeans have traditionally resisted the direct EU borrowing that might fund major new investment. In some countries, those on the right retain a suspicion of industrial strategy, as a doomed attempt to 'pick winners'. Even traditional champions like France find their current budgets constrained. In Germany, ever since the constitutional court's decision to tightly interpret the country's constitutional 'debt brake', Olaf Shultz' coalition government has struggled for internal alignment and public popularity.
What role can quantum technology play in helping Europe meet its ambitions? The promise here is strong. Based directly on our most fundamental science, quantum holds unique potential as a new general purpose technology, able to deliver impacts across a wide array of applications and industry sectors. It is naturally well positioned to support objectives in clean energy, better health, security and an improved environment. Crucially, Europe has real strengths.
Europe is the original home of quantum theory and boasts many strong academic institutions active in cutting edge research. It is strongly represented in many end-use industries that are ultimately expected to benefit from quantum technologies. In 2014, the UK (then still part of the EU) launched the world's first national quantum program, The EU later launched its own €1B Quantum Flagship initiative in 2017 (set to run for 10 years); a clutch of national initiatives followed in other member states. EU programs such as Horizon Europe, EuroQCI, EuroHPC and more recently the EU Chips Act have sought to promote joint action (and significantly expanded spending). Beyond the EU, the European Space Agency (ESA) provides a natural focus for space elements. QuIC as an industry association is increasingly prominent in providing industry participants with their own voice.
However, challenges remain. After 2021, the technology-led flagship focus of Horizon 2020 was not carried forward to Horizon Europe, which instead was oriented around societal missions. The Quantum Flagship continued, but perhaps lost some of the prominence it might have enjoyed. Achieving real coordination across national quantum programs has also been elusive. Resources can seem spread thin across national interests rather than providing focus and scale. Multiple centers are being propped-up in national and regional competition to host nascent ecosystems. ESA illustrates the most extreme version of this, where geographical return rules means funds must be spent in proportion within each contributing nation.
Other policy objectives have also been at play. A consistent theme has been the EU's desire for technological sovereignty: avoiding dependence on supply chains outside its borders, both in China and the US. This has been combined with what has increasingly seemed an antagonistic relationship with US Big Tech. The EU has sought to exploit its ability to lead on regulation, but many consider its recent initiatives on AI to simply hinder rather than guide the development of this important new technology within its borders.
Much has been written about the effects of Brexit on the UK. In the domain of quantum technology the reverse is also evident. Britain's absence from Horizon Europe severely depressed collaboration with many strong UK institutes. The UK boasts 4 universities in the world top 10, all with leading quantum tech research activities, The UK quantum program, now in its 10th year, is the world's most mature and unarguably a great success. London, though facing its own challenges, remains Europe's most credible and deepest capital market. The continuing exclusion of the UK from terrestrial Horizon Europe quantum work programmes, even after the UK obtained associate country status, can only be interpreted as flowing from the hardest of lines on technological sovereignty. A lack of ambition for collaboration with the US likewise.
Other factors have started to act as a counterweight to these forces pulling apart Western collaboration. War in Ukraine has focussed European governments again on the need for collective security. NATO has been active in promoting quantum initiatives across member states: including the DIANE quantum accelerator, hosted by Deep Tech Lab in Denmark, the NATO Innovation Fund and most recently the proposed Transatlantic Quantum Community.
Many leading nations have implemented export controls on quantum technologies, including the US, UK, Germany, France, Canada, Japan and Australia. Though in practice this doesn't yet seem to have impacted trade between traditionally friendly countries.
This summer has seen a clear evolution in these matters.
As part of Ursula Von Leyens reshuffle for her second term, the former EU commissioner most associated with a hard line on technological sovereignty, Thierry Breton, is now gone. Its most prominent political champion, President Macron of France, has been weakened electorally at home. Draghi's report, set to have continuing influence on EU policy, is also notable for a more pragmatic approach, making a distinction between where technological sovereignty is an absolute requirement (e.g. in security, encryption and sovereign cloud services) versus where it is desired as part of a competitive outcome (with quantum computing named as such an example). Ursula Von Leyens new commission has separated responsibilities for Tech-Sovereignty and Industrial Strategy between two portfolios. It remains to be seen what this will mean in practice.
The Oct 1st launch of IBM's first Quantum Data Center in Europe was an opportunity to see the direction in which both IBM and the German government would lead on these questions. IBM certainly seems clear that it prizes the opportunity to collaborate with the talent available in European ecosystems.
Delivering his keynote at the ribbon cutting in Ehningen, Olaf Scholz, the German Chancellor, spoke clearly for those that see foreign direct investment from a leading international business is part of the solution not part of the problem, Scholz also provided a joined-up vision of why this matters and why quantum is a particularly important area of opportunity.
Sholz recalled the role of Herman Hollerith in developing electromechanical processing using punched cards (and in founding one of the companies that would later merge and become IBM). Scholz pointed out "If everything remains the same, we are still sitting in front of a punch card machine". This is not just an interesting historical anecdote, it goes to the heart of the quantum opportunity. Punched cards systems through to the latest AI superchip all share a common heritage – they are all Turing machines. Quantum computing is the standout leading technology that promises to break the glass ceiling on computational complexity that is thought to limit any such system.
In 2020 while still Finance Minister, Sholz signed off on Germany's first €2B investment in quantum. Germany already had strong research infrastructure on which to build: a network of Max Planck Institutes for basic research, Fraunhofer Institutes for applied research, and prominent members of the Helmholtz Association such as the Germany aerospace research and technology centre (DLR).
The quantum investment distributed through these organizations has set the scene for and encouraged, but not directly funded, IBM's investment. At a reported €290M this sets a new record for the sector. This stands in stark contrast to other recently announced quantum installations, where typically the host government or region has footed a substantial part of the bill. It is taking a A$940M combined investment from the Australian and Queensland governments to take PsiQuantum to Brisbane; $200M of incentives to take it to Chicago.
Accepting that an important part of the tech stack, the QPU, might come from outside of the EU is a compromise on full technological control. But it does ensure German and EU businesses seeking to explore potential quantum applications can do so based on the best platform currently available (notably the UK NQCC has also bought premium cloud access to IBM's latest systems). The upside of the German location for the data center is that it helps assuage concerns on data and IP security, which are a strong focus within the EU.
Due to its combination of qubit scale (156Q), high fidelity (2Q 99.6%) and relative speed (making it more broadly compatible with error mitigation techniques), IBM's Heron revision 2 chip is arguably the leading quantum processor available for commercial access today. However other platforms will very much continue to compete in this market, both against a short term and long term horizon. Applications in pure science are already of interest. Commercial applications are not certain with intermediate scales systems but remain a key development proving ground.
The new quantum data center is in effect in competition with other centers, such as the Leibniz Supercomputing Centre. This already hosts a 20Q trapped ion and 20Q superconducting circuit based QPUs. Leibniz (and other such centers across Europe) will be under pressure to upgrade their processors. (Below 50-60Q, quantum processors can in any event be simulated on conventional computers).
Ultimately, many believe that only much larger scaled-up systems will unlock the real potential of quantum computing and ultimately establish a dominant design. For an in depth review please read GQIs Outlook Report: The Road to Shor Era Quantum Computing (developed in conjunction with the NATO Innovation Fund).
The French quantum program has equally been forging its own success. Backed by €1.8B of spending over 2021-25, it has helped accelerate an already strong ecosystem. Consolidating both French innovation and attracting collaboration, in particular from across the EU. There is a danger that confirmation for new funding for the program beyond 2025 may be delayed due to the current political impasse in France. But such is the momentum already established behind the leading French quantum startups and early industrial champions, This shouldn't be an existential threat to the sector in France. Strong centres exist around Paris and Grenoble with support from institutes such as Inria and CEA-Leti.
Other strong quantum ecosystems exist within the EU, notably in the Netherlands anchored on QuTech (established in 2012) and the Quantum Delta NL initiative. Also collectively in the Nordic nations, with a particularly focussed center developing in Copenhagen. Israel is a standout quantum center and an associate country for Horizon Europe. Basel has emerged as the champion of the Swiss ecosystem.