Australia’s forthcoming national quantum strategy is the “clarion call” the nascent sector needs to mature and will pave the way for more capital and new players, according to two of the country’s eminent quantum leaders and backers.
But building an industry that is globally competitive will require significantly more federal government funding than what is currently on offer through the $15 billion re-industrialisation plan.
The comments come as the government continues to consider the contents of the inaugural quantum strategy drafted by chief scientist Dr Cathy Foley to bring to an end years of policy drift and falling sovereign investment.
The Albanese government already regards the sector a “national priority” for Australia, acknowledging that the country waited too long to act on other critical technologies like artificial intelligence.
The government is expected to release the strategy within weeks and has already flagged support through its proposed $1 billion Critical Technologies Fund – a sub-fund of the $15 billion National Reconstruction Fund (NRF).
For Professor Michael Biercuk, the founder and chief executive of Australian quantum startup Q-CTRL, the mere existence of quantum strategy is a “huge signal to local enterprise” about the importance the government places on the sector.
“This is an opportunity to say, ‘look, you don’t need to take our word for it. Here is the Australian government making a statement about the importance of this quantum, and you have front row access to some of the best technology going’,” he told InnovationAus.com.
Professor Biercuk, who sits alongside 14 other commercial and scientific leaders on the National Quantum Advisory Committee, said that Australia is currently “not seeing an explosion of other companies that could also contribute locally”, stymying the organic growth of the sector.
This is despite having a strong quantum startup scene and higher global venture capital (VC) funding relative to the rest of the world, according to research commission by the Tech Council of Australia last year .
Local players like Q-CTRL and Canberra-based Quantum Brilliance — both backed by Main Sequence — are also largely export focused, meaning “the value is accruing to customers who are not Australian”.
“We capture value as a provider of software products and services, but we could be selling it to Australian entities that will consume it for Australian benefit, and that’s not what’s happening,” Professor Biercuk said.
“So, if we want more value accrual within Australia, it’s essential to have this kind of statement and this kind of additional investment.”
Phil Morle, a partner at Main Sequence and one of the early investors in Q-CTRL, said planting a “very clear stake in the ground about what the opportunity is and what we can go after” is important to move forward, describing the strategy as a “clarion call… from all of us”.
“This is important because it causes us all to behave in a consistent way. If we feel like we’re part of a community of people who are leaning into an opportunity, we’ve got a common belief about what’s on the other side… then we’re much more likely to take that step,” he told InnovationAus.com.
“This is where the funding part is helpful because probably, we’re all going to have to take some risks, which is slightly uncomfortable, but it’s through taking those risks that we really step into the breakthrough and get the advantage as a country, as an investor, as a quantum computing founder.
“And this is where government funding can help, whatever that amount is, it just kind of helps people take that extra little bit of risk to do the big things… the success will feed the success, which will feed more investment and the whole sort of virtuous circle starts to turn.”
But what that government funding looks like, and how much, is the subject of contention, with the Australian Information Industry Association suggesting a minimum $1 billion in funding over the next five will be needed to maintain the country’s global competitiveness.
At present, the government intends to build strategic capability in quantum, as well as dozens of other critical technologies, such as artificial intelligence and robotics, through the $1 billion Critical Technologies Fund – a sub-fund of the $15 billion NRF.
Professor Biercuk has himself previously called for the government to tip an ambitious $5 billion into quantum over the next five years – a level of investment that would see Australia “completely own this market”.
But he said that even investing $2 billion over five years – a “rounding error in Defence budgets” – will “deliver truly transformative outcomes”.
“What I think is not appreciated is that very small – in the scheme of things – amounts of money can make industries rise or fall, and it is a strategic direction right not that the government faces and we encourage them to grab the opportunity,” he said.
Having recently updated its economic forecast, the CSIRO conservatively estimates that quantum technology will be a $4.6 billion industry in Australia by the end of 2030 and worth $6 billion by 2045.
Professor Biercuk also said that while it is “good to see recognition from the government via the NRF”, as “any start is a good start”, other mechanisms, such as “forward strategic purchase”, are also needed to grow the quantum sector.
“[The NRF] is an essential aspect of maturation of the private capital and public capital markets in Australia, but we do think that there is real value in direct engagement in the sector beyond what is in the NRF,” he said.
Professor Biercuk pointed to Germany, where the government there through the German Aerospace Center has spent €208 million buying prototype quantum computers based on ion traps from five different companies.
“The European ecosystem in quantum technology exists almost 100 per cent because of that [forward strategic purchase] strategy,” he said.
“European governments say, ‘I’m going to buy a quantum computer from you today, I’m going to pay you today, you’re going to deliver it in eight years, and we’ll have whatever rights to access and compute time and whatnot.”
“Whole companies have come out of nowhere because of that, and what we’re interested in seeing is what scale of investment can be made here in parallel to the NRF.”
Regardless of the funding approach, both Professor Bierack and Mr Morle firmly believe the opportunity that quantum holds is almost immeasurable, both for the economy and our geostrategic position.
“We are convinced that after five years that there is quite a substantial step change in possibilities for the planet, which can come from quantum computing, and countries will rise as market leaders in this field in the same way that we saw Silicon Valley rise around Stanford,” Mr Morle said.
“These are the kinds of opportunities which we think are important for private markets and governments to keep their eye on and know when we start doing the synchronised Michael Jackson dance together, to actually break through and make this industry happen.
“But we also think it’s very exciting that if we’re a country that is mature in our thinking about quantum technology and other industries using quantum technologies, then that will be a profound advantage across multiple industries here in Australia, giving us another leg up in global markets.”
Do you know more? Contact James Riley via Email.