Europe’s quantum tech sees rosy outlook for 2024, report says

A new report published on Tuesday (30 January) by three leading European firms sheds light on several quantum trends for 2024, pointing to steady growth of investments in Europe’s quantum start-ups.

With insights from HSBC, Dell, Federal Reserve, Citi and Moderna, the ‘State of Quantum 2024’ report reveals that Europe was the only region that saw consistent growth in venture capital investment into companies related to quantum technologies.

The ‘State of Quantum 2024’ report released by IQM Quantum Computers, OpenOcean, and Lakestar, three leading European firms and in association with the Quantum Insider (TQI), analysed venture capital (VC) investment, government funding and national quantum strategies. 

VC investment into quantum startups has dropped by almost 50% worldwide. Back in 2022 global investment amounted to $2.2 billion, while in 2023 it totalled only $1.2 billion.

The EMEA (Europe, the Middle East and Africa) region was the only region that grew by 3%, according to the report. The Asian-Pacific region (APAC) recorded a decline of 17%, and VC investments in the United States plummeted by 80%.

“One of the reasons is that Europe is a little bit more strategic about quantum computing at this point. It is less prone to large swings,” Ekaterina Almasque, General Partner at OpenOcean, told Euractiv, emphasising that her analyses were subjective and speculative at this stage. 

“Basically, it [Europe] started slower to invest, but actually the investments are steadily growing, while in the US it started very sharply and then declined with a general drop in VC funding,” Almasque added.

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Trends and outlook

The report generally forecasted a “steady momentum toward the quantum era”, according to Almasque.

This momentum includes introducing quantum technology programs at universities to ensure a more significant proportion of quantum talent in the future and a greater number of publications of quantum technology roadmaps that contribute to transparency.

While it is still a challenge to upskill the quantum computing workforce, more companies aim to train their staff to become ‘quantum-ready’ by working on business optimisation problems in 2024.

In the same spirit, the report predicts that ‘pure’ quantum computing will come later. The gap is now bridged by so-called ‘hybrid solutions’.

“Hybrid refers to when you’re running part of that computation on a traditional microprocessor architecture and [another on a] quantum architecture,” Stephen Nundy, Partner and CTO at Lakestar, told Euractiv.

Experts have high hopes that hybrid quantum systems will foster breakthroughs in computational advantage for specific applications. 

However, the report also predicts challenges. One of them concerns the access of on-premise quantum computing over the cloud. End-users will have to face data security and privacy regulations. 

Another hurdle for the investment in quantum is the ‘cost per useful hour’, thereby limiting experimentation. The report highlighted that one hour on a high-performance GPU (graphics processing unit) system is more valuable than an hour on the average quantum computer. 

Even though quantum technologies come with their benefits, post-quantum secure encryption remains a challenge. Businesses and governments must upgrade their security protocols to post-quantum secure systems.

“Until that point, we need to assume that everything that has been shared privately up until that point is going to be decrypted,” Nundy added.

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Quantum strategies and government funding

With increasing numbers of governments and businesses becoming aware of the risks of falling behind in the quantum era, the report reveals that 33 governments pledged $40-50 billion in public funding globally from 2024 to 2034. Twenty of them even formulated roadmaps and quantum technologies strategies.

“Particularly in their nascent stages, governments […] can help establish the necessary infrastructure for R&D like national labs and research centers,” Nundy explained

“Governments can act as key facilitators for this technology critical to Europe’s sovereignty,” Nundy added.

Simultaneously, the report pointed out that national labs and quantum computing centres have accelerated practical applications with quantum computing hubs. These maps are mostly scattered across Europe and North America. The 80-page document lists labs in the Netherlands, Switzerland, the UK, Finland and Poland.

“There is a strong correlation of the number of startups in those regions with the national labs, like a number of startups from Poland, Finland and the Netherlands,” Almasque explained.

“Developing talent is a strategic initiative by the government. So it’s part of this initiative that helps us to develop strategic advantage,” she added.

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[Edited by Luca Bertuzzi/Nathalie Weatherald]

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