currently unsolvable, enabling breakthroughs in drug discovery, personalized medicine and many other industries. Quantum communication will shape the future of encryption and data security,65 while quantum sensors will enable more precise measurements, collecting data at the atomic level, for innovations in medical imaging, navigation and environmental tracking.66 Researchers still have some major challenges to solve to reap the technology’s full benefit, but its market potential and strategic importance make it a top priority. Europe’s starting point and potential unlocking actions It is still relatively early days for quantum technology, but becoming a leader in the field will require Europe to consider a wide range of moves without much delay. –Building scale. While quantum technology is still nascent, Europe’s capabilities position it well to be among the first regions to scale it effectively. Proactively aligning regulatory standards, such as tax policies and fiscal measures, can support the growth and retention of quantum tech companies across member states as the technology matures. –Simplifying the regulatory and permitting environment. Regulations for the nascent quantum technology are still evolving, but the market is already showing signs of fragmentation. Harmonizing national quantum sandbox frameworks with a common set of rules across all member states could enable experimentation and the development of quantum applications by European start-ups, offering a much-needed boost that typically is provided through private investment. –Increasing innovation capital and investment. Five of the top 10 tech companies globally ranked in terms of investment in quantum technologies are based in the US and four in China, while none are based in the EU, according to the Draghi report. While private funds make up about 80% of quantum technology investments, only 9% of these funds have flowed to Europe.67 Creating a long-term EU quantum chips plan that coordinates funding and architectural choices across the European Investment Fund and European Investment Bank could help concentrate existing funding more efficiently. –Driving commercialization. Quantum tech start-ups in Europe benefit from accelerators, tech transfer organizations and country-based programmes to develop and commercialize innovations, while projects like Project Petrus aim to deploy a secure quantum communication infrastructure across the EU.68 However, the region struggles with weaker coordination between research start-ups, venture capital and leading industries. Creating a CERN-like organization for quantum technologies could foster extensive collaboration among academia and industry and enable rapid scaling of commercial opportunities to shorten time-to- value for innovation. –Strengthening research and talent. The EU has the highest number and concentration of quantum technology talent,69 yet retaining skilled employees in European industry and improving technology transfers still present challenges. To address these, Europe should continue building quantum technology programmes at universities and up-skilling programmes in industry to give graduates more relevant knowledge in adjacent areas. –Cultivating ecosystems and global leaders. Member states are announcing large investments to create local quantum capabilities, and many ecosystems and hubs have already been established across the region, including in Munich, Delft, Paris, Basel, Zurich, Oxford and Stuttgart. Focusing on scaling up ecosystems similar to regional initiatives such as the Munich Quantum Valley, with industry collaboration at the core, can strengthen the transfer of innovation to industry. Value chain priorities With the opportunity to drive early adoption and establish global leadership, Europe may want to consider building on its current strengths in several areas of the quantum value chain, including the following (Figure 8): –Quantum communication technology. Given the strategic importance of quantum communication capabilities overall, Europe could benefit from establishing a stronger position across the entire value chain. Defence projects, for example, could enable early development and testing of ultra-secure communication channels to protect sensitive national security information, capabilities that could later be adapted for broader governmental and civilian applications. –Hardware. A primary focus for Europe could be significant investments in hardware manufacturing across the quantum value chain. Europe has experience and expertise in the delivery of photonic networks and superconducting circuits – two essential building blocks for quantum infrastructure – but it faces new competition from large US tech firms that have greater access to private capital. As a result, many quantum computing hardware start-ups have relocated away from Europe. In quantum sensing, where large European incumbents currently partner with smaller players, moving rapidly from prototype to commercialization will be crucial to remain competitive. Europe in the Intelligent Age: From Ideas to Action 23

Europe in the Intelligent Age 2025