Europe is pouring public funds into quantum tech startups, report says

Europe is pouring public funds into quantum tech startups, report says

A report published today by McKinsey on the state of the global quantum tech sector has found that Europe is spending more and more in public funding on technologies such as quantum computers, quantum sensors, and quantum communications. 

Quantum technology is increasingly recognised as being of high geopolitical and strategic importance. Governments are drafting national quantum strategies, and many quantum computing and other quantum tech projects are overseen by ministries of defence.

The technology could also add trillions of dollars in value across several different industries in the next ten years. With Europe progressively focused on “digital sovereignty,” it is perhaps therefore not surprising that it is spending increasing amounts of public funds on this nascent sector. 

Significant commitments from European governments have contributed to global public funding for quantum tech increasing by 50% over the past couple of years. Countries including Germany, the Netherlands, and the UK have recently launched or expanded national projects, bringing the total global public funding to date to approximately $42bn. 

European national quantum investments

The UK’s national quantum strategy has unlocked $3.1bn over 10 years from 2024 for a total of $4.3bn. Germany recently announced additional investments of $2.25bn over three years towards the development of a fault-tolerant quantum computer through its Action Plan for Quantum Technologies, hitting a total of $5.2bn. 

The <3 of EU tech

The latest rumblings from the EU tech scene, a story from our wise ol’ founder Boris, and some questionable AI art. It’s free, every week, in your inbox. Sign up now!

France has committed $2.2bn, the Netherlands $1bn (with Quantum Delta NL recently receiving $66mn from the National Growth Fund), Denmark $406mn, Austria $127mn, Spain $67mn, and Finland $27mn. 

On a sole country level, this pales in comparison to China, which is spending $15.3bn in state funds. However, the US government has only committed $3.8bn, with the entire amount announced before last year. 

While VC and other private investment make up over 80% of quantum tech funding globally, it is still lagging behind in Europe, trailing public spending. There is no reliable data for private investment in quantum technology in China. However, in the US, private investment in quantum far exceeds public support, making up over 90% of total funding.  

Globally, quantum technology startups saw a decline in VC investment in 2023 (by 27%). However, this was still a smaller decrease than across all tech startup sectors (38%). A majority of the funding for quantum went to companies founded five or more years ago, indicating a preference for more mature technology and companies with already developed commercial use cases focused on scaling. 

Europe leads in quantum tech scientific publications

The number of new startups in the space is dwindling, with only 13 new companies started in 2023. Reasons for this are an investor preference for new AI startups, along with overall capital market situation, as well as talent shortage issues. 

Encouragingly, the report also found an increase in quantum technology programs offered by universities — and the EU taking the lead when it comes to the number of graduates in related fields. EU scientists also lead in academic publications, followed by China and the US. 

The report covers quantum computing, quantum sensing, and quantum communication. You can read it in its entirety here.

Read More

Leave a Reply

Your email address will not be published. Required fields are marked *