Insider Brief
- Carmen Palacios-Berraquero, CEO of Nu Quantum, warns in Fortune that cutting funding for quantum technology could jeopardize the U.K.’s leadership in deep tech.
- She emphasizes that long-term investment is crucial, as quantum computing holds the potential to generate significant economic returns and address global challenges like climate change.
- Palacios-Berraquero urges the new Labour government to maintain and expand support for quantum startups, arguing that now is the time to invest boldly, not cautiously.
Now is not the time to cut funding in what could be world-changing technology, a leading UK quantum executive is telling the nation’s new Labour government.
In an op-ed published in Fortune, Carmen Palacios-Berraquero, founder and CEO of Nu Quantum, a Cambridge University spin-out, makes a plea to the U.K. government to maintain and even increase its investment in deep tech, particularly in quantum computing. Palacios-Berraquero warns that cutting funding at this critical juncture could hinder the growth of the U.K.’s burgeoning quantum industry, potentially costing the country its competitive edge in a field poised to revolutionize numerous sectors.
According to industry leaders and several media outlets, the Labour government is considering the withdraw of £1.3 billion in funding earmarked for quantum technology, artificial intelligence (AI) and other deep tech projects.
This short-term cut could lead to a long-term disaster for the nation’s scientists and entrepreneurs building advance technologies that could lead to new computers that could tackle challenges in logisitics and medicines and sensors that could help vehicles navigate without satellite guidance.
Palacios-Berraquero’s argument centers on the notion that the tech world, often glamorized for its rapid advancements, actually operates on a much slower timescale.
“Venture capitalists often tell their investors that the returns take between five and seven years,” she writes in Fortune. “In private, they all know it’s closer to 15.”
This understanding, she writes, clarifies the importance of long-term investment, particularly by governments, which can reap enormous rewards if they stay the course.
The U.K.’s deep tech scene, especially in quantum computing, has made significant strides over the past decade and is considered a global leader not just in research, but also commercialization of the technology.
This progress, Palacios-Berraquero writes, was facilitated by the U.K. government’s early commitment to quantum technology, dating back to 2013 when it launched a national quantum strategy with an initial £1 billion investment. This funding has supported a robust ecosystem of startups, many of which have spun out from leading research institutions, such as the University of Cambridge’s Cavendish Laboratory.
“These companies have raised tens of millions of pounds each in seed and series A rounds, employ thousands of people in the U.K., and are ready to scale up and bring these incredible technologies to market,” Palacios-Berraquero writes in Fortune.
The momentum is evident in the investment figures: in 2023, venture capital funding for quantum startups in Europe, the Middle East, and Africa (EMEA) far outstripped that in the U.S., with EMEA startups securing a majority of global investments in the sector.
“This is already starting to pay off. Venture capital funding for early-stage quantum startups in the U.K. and EMEA more broadly has also significantly trumped the level of capital flowing into the space from across the pond in the U.S.” Palacios-Berraquero writes. “Last year, VC funding raised for quantum startups in EMEA was more than triple that raised in the U.S. ($781 million vs $240 million). EMEA startups have therefore cashed in almost two-thirds of the $1.2 billion invested by VCs globally in the sector in 2023. The private investor interest, aptitude, and commitment to quantum’s potential in the U.K. and EMEA more broadly is plain to see.”
However, despite these successes, Palacios-Berraquero expresses concern that the current U.K. government might pull back on its financial commitment to quantum technologies. The previous Conservative government had pledged an additional £2.5 billion in February 2023 to be deployed over the next decade to support five ambitious “quantum missions.” But this funding, crucial to the continued growth and global leadership of the U.K. in quantum computing, has yet to be deployed.
“The government is currently undertaking a one-year spending review, and there will be a multi-year spending review in the spring,” Palacios-Berraquero writes in Fortune. “Right now, these world-leading startups are out looking for series B and C funding—the well-known point where U.K. and European funds have traditionally been too small to lead these sorts of rounds.”
The risk, she warns, is that without continued and consistent government support, these companies may struggle to scale, missing out on the potential for “hockey-stick growth” that could generate substantial returns for the U.K. economy.
Palacios-Berraquero hopes the new Labour government will recognize the critical importance of deep tech investments. She emphasizes that quantum computing is not just another technological advancement but represents a fundamental shift in how computation is done—a shift that has the potential to generate an additional £1.3 trillion in global GDP across industries such as automotive, chemicals, financial services and life sciences.
“Quantum computing will allow us to create digital twins of the world at a very small scale—and one day be able to design and predict how atoms come together to form everything around us,” she writes.
This capability, she argues, is not only a driver of economic growth but also a vital tool in addressing global challenges such as the climate and energy crises.
The stakes, according to Palacios-Berraquero, are enormous. She writes that the U.K. is at a pivotal point in the quantum tech cycle, where the right investments could lead to the creation of “new NVIDIAs and Microsofts of quantum,” with potentially transformative effects on the economy.
But this can only happen if the government continues to invest boldly in the sector.
“The new Labour government must build on previous success and continue to invest to bring world-changing innovations to fruition and scale,” Palacios-Berraquero urges in Fortune. “It must not reduce a winning bet just for the sake of playing it safe. The government, investors, and founders need to decide whether they’re investing to win, or simply not to lose.”
Read the entire op-ed here.
