The history of the valley is a mystery to some, but the accepted beginnings come from the silicon chip industry earning it the silicon moniker, but it actually began a while before that with its origins in the military establishment and institutions such as Stanford that encouraged would-be entrepreneurs to found their own businesses.
First, a little history
Delving into history before the integrated circuit and after the second world war, the dean of Stanford University, Fred Terman was perhaps the single person most credited with giving Silicon valley the foundation the valley is now built upon. He also created the Stanford Industrial Park, where technology firms could work. Most of all he seeded an ecosystem that lives on. Household names such as General Electric, Hewlett Packard and Kodak were situated in close enough proximity where there was conflation of ready talent from the university system and other organizations.
Of course there is technology history before Fred Terman as the Bay Area had long been a location of United States Navy research and technology which saw that in 1909 it become one of the home of the first radio broadcasting location.
All about the Quantum ecosystem
Ecosystems, clusters, hubs or centers all mean the same thing. Similar businesses and ready pools of talent. New businesses are drawn to the area because of the existing talent, and people with the right skills go where the work is.
Clustering in physical matter is interestingly enough a rather physics driven process where a nucleation event means that further matter is more likely to congregate at the nucleation site. Virtually the analog to the way that cities, and industries cluster – a seed event makes it more likely that another industry with particular synergies joins.
Once ecosystems or clusters are established it can be hard to uproot them. For example London and New York have maintained their financial industry dominance. Other places such as Detroit have not been so lucky. The former Detroit ‘Motown’ (Motor-Town) fell when industry moved manufacturing away and you could also argue partly due to automation (which the Motor Industry was always quick to adopt).
Often it might be chance or random how a cluster emerges – much like in nature. Driven by personalities, coalescing of events of just plain random chance. What if Fred Terman was based in the Mid-west? Might we have seen cluster of high tech emerge in that locale?
Where will Spooky Valley emerge?
The Quantum Industry looks much like the post war technological period i.e. Before the Integrated Circuit (IC). Companies and researchers are coming up with a plethora of methods for making Quantum Bits or Qubits. We see a range of technologies: Phototonics, Ion traps, Super-conducting, topological and Silicon Qubit’s. All offering advantages and disadvantages but the focus is on fidelity and scale, such that larger circuits can be assembled to do something truly useful. The hope is that with larger scales a whole new industry can be created much as what the micro-processor did for classical computing decades before. And for that event to take place, addressable qubits must be created in large enough numbers and we are still waiting for one technology (or more) to provide the scale that is required for a new Quantum revolution.
Currently there are many businesses large and small exploring Quantum Computing. But hardware research and development is not cheap and therefore innovation is being led by the larger labs such as IBM, Microsoft, Google and Honeywell. At the smaller end (and increasing getting larger) there are the Zapata’s, Rigetti, Xanadu, D-wave and Strangeworks (Software). Many are based in North America, but there are growing Hardware businesses such as Oxford Quantum Circuits and Cambridge Quantum Computing, which are based, you guessed, in the University towns of Oxford and Cambridge,
Central here is the main thesis is that Quantum talent (researchers and developers) is not clustered enough into a nucleus because simply there are not that many skilled quantum researchers, programmers and developers. That means the talent will move to the opportunity or organization. Still there are large research bases from the big R&D labs which are themselves distributed globally.
By not clustered enough, we see that many leading University research teams are based in regions from Berlin to Brighton, Texas to Toronto and this is where at the moment the talent must typically come from – due to the specialized nature of the work. Quantum companies are often looking for PhD educated scientists and Post-docs.
There is simply no point for a Quantum Business to be located in Silicon Valley right now, beyond the talent pools at the local universities. That isn’t to say there are not Silicon Valley based companies. We just don’t think its necessary right now because there has been no Quantum nucleation event in Silicon Valley. Much of the Venture Capital companies have offices in the Valley and that have been one historical reason to base a company there but there is not the critical mass of talent nor enough of a research base there.
Canada’s Quantum Cambrian Explosion
Canada punches well above its weight in its quantum contribution and ambition and that could be ascribed to vision of one man: Mike Lazaridis. Driven by his insatiable curiosity and supreme intellect, Mike Lazaridis used his wealth created in building the technology company Blackberry to fund hundreds of millions worth of Quantum research and development. Lazaridis is the founder and benefactor of the Perimeter Institute – one of the leading quantum research establishments – which at one time had Stephen Hawking on the payroll. Also Lazaridis funds the Institute for Quantum Computing (IQC) at the University of Waterloo in addition to his own Quantum Investment fund.
Analagous to Bell labs which had its hand in the creation of the transistor (pre Integrated Circuit) which eventually spawned the microprocessor, Lazaridis effectively created a ‘Bell Labs’ for Quantum Computing. The impact is clear to see on the QC landscape with the emergence and sustenance of companies such as D-wave, Xanadu and Quantum Business accelerators at the University of Toronto (Creative Destruction Labs) for example.
The Office is Dead
Right now we are making the assumption that there will be a major cluster focused around Quantum technologies such as Quantum Computing and Quantum Cryptography. However The events of the last six months with most of the world struggling with Covid-19 corona virus has shown the world (certainly those technology professionals) that working from home is eminently doable.
Much of Silicon Valley and the tech hubs around the planet are literally “dog-fooding” which means they are consuming the tools they create. In a twist of irony which shouldn’t be lost on the technological class of Silicon Valley, their runaway housing price market is driven by the demand to be close to others of the same ilk, going to their office to create the very tools that obviate needing to be in the same geography. Google hangouts, Google Meet, Zoom, Apple’s FaceTime all are enabling remote working or WFH which was doable long before the Corona Crisis made it a necessity.
Macro events like the Corona virus affect us all and may change the way we work and where we work. As technology is demonstrating it is not only feasible to work from home but it may be more desirable in the future and it could become the norm. We might just be seeing the beginning of a new way in which employees expect to interface with their co-workers. Offices may exist, but perhaps as token of existence (when almost everything is virtual).
Silicon Valley Prices
The desire for the people to be in the Valley is a self fulfilling prophecy. The more people are there with the right technology skills, the more companies want to be there to employ that talent. That drives prices for basic needs like housing through the roof, where living costs spiral and compensation must also match the higher living costs. Everything is in a positive feedback loop, costs rise, salaries rise, desire to be there “In the Valley” rises. There are very few winners (especially employees), unless the workers can cash out and live somewhere cheaper. Or their start-up is acquired by a big player – and they might then be able to buy their own home.
Peter Thiel has also fallen out of love of the Valley, although for sightly different reasons (mainly politics) and moved his operations to LA, which is likely to result in massive cost savings too. Many people have seen the writing on the wall for Silicon Valley and are moving out to places like Texas. Yup, you heard it, Texas. The fact is the quality of life can be so much better in Texas without needing to work the excessive hours to stay afloat in Silicon Valley.
More and more people are deciding the economics of the Valley no longer work and are voting with their feet – moving to Texas for example. Visitors have come for the festivals and cultural events such as SXSW and have elected to make Austin Texas their new home. Many argue that we seeing peak Silicon Valley and the only way is down.
Spooky Valley / Quantum Valley
With the massive demand for people to be in one place suppressed with the Corona Virus, this could lead people to consider more options like working from home as a permanent state. Particularly as it could allow a better quality of living in a region where there is more affordable housing. Particularly those with families will likely prefer quality of family life over being near their favorite bagel shop.
Perhaps there will not be one place that could be named Quantum Valley and we’ll see lots of local hubs that grow together in parallel (Quantum Parallelism anyone?).
As quantum hardware springs up from research and those organizations, likely we’ll see centers of QC around universities, research institutes that already exist and these will be the seeds going forward. Many researchers will be able to use the cloud facilities without needing to be in the lab.
Quantum Hardware needs resources, labs and skilled staff and as yet the “maker” community hasn’t happened for Quantum as the price of entry is too high. There are people claiming to build Quantum devices in their bedroom – but we cannot say verify this is happening and in any great number.
As Quantum is not being radically commercialized at the consumer level – there are no apps, no pocket Quantum Computer and the actual number of addressable qubits remains low, there will be natural limit to the dollars flowing in, which will reduce the number of start-ups hoping to build the next Quantum Killer Application and put a brake on salaries.
Therefore I argue what we will see is those existing pockets of talent that are pre-seeded with talent will become the Quantum hubs of the future. Until we get the micro-processor equivalent moment for Quantum there won’t be the singular hub of activity where the masses flock to.
Quantum Hubs of the Future
Whilst Google’s Mountain View which is in the Valley does have a Quantum Team that has produced some amazing breakthroughs such as Quantum Supremacy. There are other players around the globe who are also working on improving the hardware technology and algorithms that could enable Quantum technologies to have an impact.
Clearly Canada is an enormous Quantum player, due to massive funding from Mike Lazaridis which is funding hundreds of researchers. Coupled with great educational establishments and tamer property prices. Even Toronto prices are tame compared with Silicon Valley. So expect to see that Canada maintains that sustained hub. The University of Toronto “Creative Destruction Labs” was one of the first if not the first to offer entrepreneurs the chance to found a DeepTech Quantum company via their accelerator. The U of T managed to attract some notable talent with the late Peter Wittek a researcher in Quantum Machine Learning. And its not just academia, Xanadu is one notable Quantum Computing company which is pioneering not just hardware but algorithms (such as Quantum Machine Learning) and software. It has managed to attract amazing researchers to its team such as Maria Schuld who is doing ground breaking work on Quantum Machine Learning. Not surprisingly Xanadu has investment from some of the worlds most well-known Venture Capitalists such as Tim Draper.
The grand-daddy of the Canadian Quantum Computing space is D-wave which was founded back in 1999 and holds the mantle for being the first company to sell a Quantum Computer. Rather akin to the IBM of the 1950’s – it has sold its room sized machines to a number of technology companies including Google. Now D-wave allows access to its Quantum Annealing machines through the cloud with its Leap-2 service.
Boston, with its famous institutions such as MIT and Harvard has unsurprisingly been the location for another noteworthy Quantum start-up named Zapata. The small team includes individuals who came up with the VQE which is proving to be one of the near term approaches with NISQ devices.
Seth Lloyd a notable MIT professor and the original Quantum Mechanic is another the Boston Quantum luminary – famous for being the ‘L’ in the HHL algorithm which could lead to faster matrix inversions (a lot of real-life problems boil down to this issue).
Austin Texas has emerged as the new home of the Silicon Valley disenfranchised. Some are calling it the new Silicon Valley and it is also home to the Quantum start-up named StrangeWorks, which is founded by the serial entrepreneur William Hurley or “Whurley” as he likes to be known. StrangeWorks aims to be different as you’ll see if you visit their very non-corporate style website. The very nature of the product offering is to be hardware agnostic which means that their software toolset can work on a number of different quantum architectures.
Scott Aaronson is one of the intellectual heavy hitters of the Quantum Computing world, focused on complexity theory. At the core, Scott deals with whether Quantum Computing can actually offer real advantages over classical computing. Scott is also based in Austin and is a professor of Computer Science at the University of Texas, Austin.
Oxford and Cambridge are most famous for their universities which are some of the oldest in Europe. But they are also famous for their technology clusters which make extensive use of the highly educated graduates that emerge from these institutions. The high tech clusters in the Oxford – Cambridge – London triangle have seen companies emerge such as ARM (you may have their chip designs in your phone), Oxford Nanopore (Novel DNA sequencing), Autonomy (Sold to HP). Some of the research bases of larger companies such as Microsoft are based in Cambridge.
As you’d expect from the regions where there is plenty of quantum research happening, there are numerous Quantum companies in the Oxford – Cambridge – London triangle. We have mentioned a few of them such as Oxford Quantum Circuits and Cambridge Quantum Computing, but there are new companies popping up all the time such as Nu Quantum.
Predictions for the Future of Quantum Clusters
All predictions are likely to be wrong, but we think that we will not see the dominance that Silicon Valley has in the technology sector extend itself to Quantum Computing. Certainly not in the immediate future. We see too many headwinds and no pull for the Quantum Community to flock there.
There may in the future be some rationalization of Silicon Valley as living costs have spiraled – and that trigger event might be the Corona Virus. So we see other regions around the planet as attractive in the near term, particularly those with a strong educational base and more reasonably priced real estate. Longer term, as technologies wax and wane we can imagine that parts of the Valley become over-priced to the point that companies simply look elsewhere for office space where the staff can afford to live. Or simply don’t need the office space they once did.
Couple this to the fact the everything bar the creation of Quantum Hardware can be done in the cloud, there is no need to congregate in clusters or even offices. So we may see a more even distribution of Quantum Talent around the globe.