According to two of the country’s famous quantum leaders and supporters, Australia’s upcoming national quantum strategy is the “clarion call” the development the sector needs to mature and will clear the way for more funding and new players. They emphasized that to develop a globally competitive business, the industry will substantially need more federal government support than ever through a $15 billion re-industrialization plan.
“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.”
Professor Michael Biercuk, founder and CEO of Australian quantum firm Q-CTRL
The government has already shown support through its proposed $1 billion Critical Technologies Fund, a sub-fund of the $15 billion National Reconstruction Fund (NRF), the platform that was built as a first step in Labor’s plan to rebuild Australia’s industrial base; it is focused to provide a crucial financing investment in projects that will build prosperity across the country, broadening the industrial base and boosting regional economic development.
According to Professor Michael Biercuk, founder and CEO of Australian quantum firm Q-CTRL, the mere presence of quantum strategy is a “major signal to local enterprise” about the significance the government placed on the field.
“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. So, if we want more value accrual within Australia, it’s essential to have this kind of statement and this kind of additional investment.”
Professor Michael Biercuk, founder and CEO of Australian quantum firm Q-CTRL
Professor Biercuk, who sits on the National Quantum Advisory Committee with 14 other commercial and scientific experts, stated that Australia is currently “not seeing an explosion of other companies that may also contribute locally,” stifling the sector’s organic growth.
Despite having a robust quantum startup environment and higher global venture capital (VC) funding relative to the rest of the world, according to a Tech Council of Australia research commission last year.
Local players like Q-CTRL and Canberra-based Quantum Brilliance, financed by Main Sequence, are also predominantly export-focused, meaning “the value is accruing to clients who are not Australian.”
What the Clarion Call is all about
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 potential is and what we can go after” is vital 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.”
Phil Morle, a partner at Main Sequence and one of the early investors in Q-CTRL
However, what that government support looks like and how much it costs is debatable. The Australian Information Industry Association estimates that a minimum of $1 billion in funding over the next five years is required to retain the country’s worldwide competitiveness.
The government wants to establish strategic quantum capabilities and dozens of other vital technologies, such as artificial intelligence and robotics, through the $1 billion Critical Technologies Fund, a sub-fund of the $15 billion NRF.
“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.
Phil Morle, a partner at Main Sequence and one of the early investors in Q-CTRL
Professor Biercuk has previously urged the government to pour an ambitious $5 billion into quantum over the next five years – a level of investment that would see Australia “fully own this market.” But he claimed that even investing $2 billion over five years – a “rounding error in Defence budgets” – can “bring truly revolutionary effects.”
“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.”
Professor Michael Biercuk, founder and CEO of Australian quantum firm Q-CTRL
What the future holds for the Australian Government
The CSIRO, which just updated its economic prediction, forecasts that quantum technology will be a $4.6 billion business in Australia by the end of 2030 and a $6 billion industry by 2045.
While it is “wonderful to have an acknowledgment from the government via the NRF,” as “any start is a good start,” Professor Biercuk believes that additional methods, such as “ahead strategic purchasing,” are also required to build 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”.
Professor Michael Biercuk, founder and CEO of Australian quantum firm Q-CTRL
“The European ecosystem in quantum technology exists almost 100 percent because of that [forward strategic purchase] strategy. 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.
Professor Michael Biercuk, founder and CEO of Australian quantum firm Q-CTRL
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.”
Despite the funding strategy, Professor Bierack and Mr. Morle are convinced that quantum holds virtually unfathomable potential for the economy and our geostrategic posture.
“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. 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.
Phil Morle, a partner at Main Sequence and one of the early investors in Q-CTRL
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.”
“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.”
Phil Morle, a partner at Main Sequence and one of the early investors in Q-CTRL
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