Throughout history, technological advancements have bestowed states that are innovation leaders with a decisive edge over other states. The development of today’s internet, pioneered by the US Advanced Research Projects Agency, significantly enriched the United States, for example. It currently boasts seven of the world’s top 10 companies, which make their profits from the hardware and software for internet-connected devices.
Today, quantum technology is emerging as a realm promising economic breakthroughs. It will allow scientists to measure physical phenomena more precisely and put current computing on steroids, i.e. allowing for faster computing calculations in all scientific disciplines and industries. However, it simultaneously poses substantial threats to national security. Acknowledging its disruptive potential, the German government, in its 2023 “Action Concept for Quantum Technologies,” recognized the transformative nature of quantum technology. For instance, it will have profound implications on the confidentiality of data being transmitted online.
China and Russia have recently tested an “unbreakable” quantum satellite communication system, connecting Zvenigorod near Moscow and Ürümqi in western China. Despite the proclaimed impenetrability, vulnerabilities exist at the end points of the quantum communication lines. The collaboration between Moscow and Beijing signals that the race for quantum superiority has reached a new quality.
Compared globally, China has announced the most investment in quantum technology. As of 2022 and according to McKinsey, China’s officially acknowledged level of public investment ($15.3 billion) surpasses that of the European Union ($7.2 billion), the United States ($1.9 billion), and Japan ($1.8 billion) combined. Notably, in the US it is the private sector, including giants like Google and IBM, that is playing a pivotal role in quantum technology development. In contrast, China concentrates governmental efforts in a single research institute in Hefei, with private investment playing a much smaller role.
How Quantum Technologies Will Change the World
Quantum technologies encompass three main areas: quantum computing, quantum communication, and quantum sensing. Quantum computers, capable of solving multiple computing problems simultaneously, exhibit a million-fold increase in efficiency compared to traditional computers. This immense computing power can revolutionize fields such as pharmaceuticals and find new materials for solar cells.
Quantum computers, however, also pose a threat to current encryption methods, potentially decrypting messages and databases belonging to states and banks. While quantum computers have the most disruptive potential, they face significant technological hurdles and are still a long way from immediate commercial and military applications.
Quantum communication, on the other hand, is likely to be available sooner. It saw a notable breakthrough in 2017 when Austrian and Chinese scientists established a quantum communication link between Beijing and Vienna using the Mozi satellite. This same satellite facilitated a connection between China and Russia in 2023, highlighting a practical implementation of quantum communication.
While the encrypted connection is considered highly secure, the US National Security Agency (NSA) cautions against its use in national security systems due to vulnerabilities, including those associated with the satellite itself. Despite the US’ skepticism, Europe is championing the European Quantum Communication Infrastructure. Therein it envisions a secure communications network spanning the 27 EU member states and overseas territories through fiber-optic networks and satellites. China, for its part, has already implemented such a network between major cities, covering a distance of over 4,000 kilometers.
In the short term, quantum sensors would seem to have the most commercially robust potential of quantum technologies. They are already being leveraged by the British military for applications such as precise positioning of ships. Quantum sensors exhibit exceptional precision in positioning vessels by delicately measuring the Earth’s magnetic field. Unlike satellite navigation, these sensors are highly resilient to disruptions. The perils of interference with satellite navigation systems have been vividly illustrated in Russia’s war against Ukraine, where the daily crash of numerous drones is attributed to these actions.
Collaborations in Quantum Technology
Many states, recognizing the significant impact on international security, are forging international collaborations to advance quantum technology. The quantum communication link between China and Russia serves as a proof of concept for a broader BRICS-wide network. The AUKUS Quantum Agreement will see strategic partners Australia, the United Kingdom, and the US jointly invest in quantum technologies for positioning, navigation, and timing. The “Quad” (Quadrilateral Security Dialogue), which is comprised of the US, Australia, India, and Japan, includes joint research projects in quantum technologies as part of their cooperative efforts.
There are significant differences between those alliances and partnerships involving the US and those that do not. Alliances that include the US prioritize quantum technologies aiding navigation or post-quantum cryptography, while others, such as those that include the EU and BRICS states, are actively focused on expanding quantum communication networks.
The divergence in the US approach toward quantum communication, particularly the skepticism toward quantum key exchange, can be attributed to the recommendations by the NSA and the National Institute of Standards and Technology (NIST), which is part of the US Department of Commerce. These entities advise prioritizing post-quantum cryptography for protection against quantum computers due to the complexities and vulnerabilities introduced by quantum communication technologies.
But the most robust defense against quantum computers involves a combination of quantum communication networks and cryptography. In this regard, the EU and China may hold an advantage over the US, which is currently downplaying the short-term benefits of quantum communication technologies.
The ongoing development of quantum communication networks in Europe and China could eventually lead to the creation of a “quantum internet.” But rather than replacing the traditional internet, the quantum internet would complement it, providing enhanced security for critical infrastructure, promoting economic efficiency between companies, and bolstering privacy. The Quantum Internet Alliance (QIA), a collaboration of numerous European research institutes and companies, exemplifies Europe’s commitment to building a prototype of a quantum internet.
Germany’s Competitiveness in Quantum Technologies
In the EU, Germany has been the primary driver of public investment in quantum technologies until recently, contributing 46 percent, with France following at 26.3 percent. This financial investment has proven worthwhile, positioning Germany as a global leader. Notably, Germany ranks second among 50 countries in terms of universities offering master’s courses in quantum technologies and stands out as a top player in European quantum technology start-ups.
Commercially, Germany excels in quantum sensors and lasers for quantum technologies. Companies like Bosch—collaborating with Airbus to develop quantum magnetic sensors—exemplify Germany’s capabilities. The Munich-based company TOPTICA Photonics, along with its subsidiary TOPTICA Eagleyard, is a pioneer in producing high-quality lasers for quantum technologies, supplying critical technological components to the US’ quantum industry. OSRAM Opto Semiconductors, headquartered in Regensburg, has solidified Germany’s position through its strategic acquisition of the US-based company Vixar.
Despite excelling in quantum communication and sensing, however, Germany and Europe are falling behind in the advancement of top-tier quantum computers, which might substantially impact economic and military affairs. While the US and China lead in this domain, Germany`s commitment to allocate €3 billion by 2026 for establishing a competitive quantum computer signals an intent to catch up.
Strategies for Sustaining Quantum Leadership
To maintain or strengthen their leading position in quantum technologies, Germany and Europe must focus on the following areas.
A top priority must be to keep European quantum supply chains largely independent from China. Critical components currently come primarily from Europe, the US, Japan, and other Asian countries. Mass-produced products such as optics or electronics, however, come from China. But this should not pose a significant problem as these technologies are cheaper and could also be produced elsewhere if China were to use them as leverage over Europe. In short, Germany must ensure that its quantum supply chain remains only dependent on countries that are not its systemic rivals.
With time, Europe ought to identify potential future US export controls in quantum technologies targeting China. In this way Europe could avoid being caught off guard when the US imposes such restrictions. Those might arise particularly in areas with military applications.
In January 2024, NATO published the summary of its first quantum strategy, with the aim of making the alliance “quantum-ready.” It names some areas of military application, such as quantum computing for breaking encryption. Quantum radars, for their part, have the potential to augment radar range by over 40 percent, making them especially proficient in detecting stealth aircraft and submarines. Special attention should be dedicated to experimental research in these sensitive domains to prevent premature technology leakage. Additionally, efforts should be made to minimize research collaborations with Chinese institutes associated with the military.
Furthermore, swift access to quantum technologies for European companies is crucial for maintaining competitiveness. This would enable them to enhance productivity and allow them to gain an international advantage more expeditiously. Germany has already taken an important step here by financing cloud systems that give companies access to quantum applications.
All in all, Germany’s and Europe’s proactive stance as well as investments in quantum technologies have positioned them favorably on the global stage. Yet, maintaining competitiveness and averting surprises from quantum innovations elsewhere demand their sustained efforts in the field and strategic reasoning.
Valentin Weber is Senior Research Fellow at the German Council on Foreign Relation (DGAP)’s Center for Geopolitics, Geoeconomics, and Technology.
