Why Canada Will Win the Quantum Race

While the quantum technology scene may be just booting up, there is one place that seems to be making quantum leaps in the space, metaphorically speaking, and that place is not Silicon Valley.

It’s Ontario, Canada.

Even amidst a general consensus that “prototype quantum computing hardware is still embryonic” (Wired August 2018), there is a growing set of Canadian technologists between Toronto and Waterloo already off to the races in hopes of using their first mover advantage to develop, commercialize and cash-in on a qubit-driven future.

Canada‘s “quantum valley” is poised to win — they have a 16 year advantage in building and commercializing the technology, private and government support, an influx of scientific talent, and an exploding startup scene.

I’m watching it firsthand, having moved from NYC to Toronto recently, and I’ll share more on why I’m bullish in a minute. But first, let’s quickly unpack how quantum computing works and why it’s going to be a game-changer.

How does quantum computing work exactly?

I refer to this quick explainer from Motherboard:

“Present day computers are limited by their hardware. They use electrical circuits that are switched on or off, in a 0 or 1 position. Quantum computing would change that by using particles called qubits, which are suspended in a super-cold environment where the temperature nears absolute zero. The network formed by these particles allows for processing power to grow exponentially, as the qubits can be simultaneously at a 0 and a 1.”

Many tasks that supercomputers find challenging today —chemistry simulations, code-breaking, creating general artificial intelligence — are incredibly simple for the quantum computer.

Microsoft CEO Satya Nadella is a believer. At a conference in 2017, he implored developers to begin working on quantum problems (using Microsoft’s open source tools) as the technology would “help us tackle some of the biggest challenges we face” (Wired) by enabling massive breakthroughs in medicine, energy and finance.

In addition to Microsoft, other giants including Google, IBM and Intel are focusing heavily on developing quantum technology, and alongside them, fast-growing startups like Xanadu and Rigetti Computing.

“In 2017, venture investors plowed $241 million into startups working on quantum computing hardware or software worldwide, according to CB Insights. That’s triple the amount in the previous year.” (Wired)

By 2024, the estimated global market for quantum technologies will reach $10.7 billion, which explains why nations, corporates and startups alike are all jockeying for first position.

What’s the deal in Canada?

There’s something in the water here in Ontario that leads me to believe they will crack the quantum code first. Here’s why:

1. They “fired the starting gun”

These are the words of Raymond LaFlamme, Canadian physicist and previous director of the Institute for Quantum Computing (IQC) at the University of Waterloo. According to LaFlamme, the launch of the IQC sixteen years ago in 2002 “fired the starting gun in this race”, years before the United States, China and the United Kingdom started dedicating significant resources to quantum research.

The IQC was born out of a massive personal donation from Mike Lazaridis, founder of BlackBerry, who saw quantum as his opportunity to be central to the next technological revolution. Since 2002, Lazaridis has invested more than $100 million into the IQC to conduct cross-disciplinary research and create an ecosystem ready to support early-stage, high-risk/high-reward opportunities in the space.

If you’re looking for some social proof, LaFlamme’s previous supervisor, the late Stephen Hawking, was impressed:

Raymond LaFlamme (left) with Stephen Hawking. Photo Courtesy of the Institute for Quantum Computing

2. They were the first to commercialize

British Columbia is home to D-Wave Systems, the first company to have commercialized a quantum computing hardware system. D-Wave was founded in 1999, three years before the IQC, and although it’s based on the Canadian west coast, D-Wave’s early entrance and success has rippled across the country and acted as a catalyst for continued conversation across investors, technologists and corporates.

Christian Weedbrook, CEO of Toronto-based quantum photonics company Xanadu, told me “everyone knows about D-Wave. How are you different from D-Wave? You get that question a lot [from investors] which is an opportunity to talk more about what we’re doing.”

With over $200 million raised, the highest share of patents across all companies in the space, and a customer roster that includes Google, NASA, Lockheed Martin and “an unnamed U.S. intelligence agency”, D-Wave is a formidable force working in Canada’s favor.

Source: Relecura Quantum Computing: IP Report 2018

3. They boast both private and government support

In addition to the private investments from Mike Lazaridis and his VC firm Quantum Valley Investments, the Ontario and Canadian governments have both invested heavily — to the tune of $1 billion in the last decade alone — alongside Lazaridis and others to build the infrastructure and resources needed for quantum dominance.

This private-public partnership is responsible for the creation of the Institute for Quantum Computing, the Perimeter Institute for Theoretical Physics, the Quantum NanoFab Facility and the Quantum Valley Ideas Lab, all based in Waterloo and focused on different elements of the quantum research life-cycle — from R&D all the way through new product commercialization.

4. They’re encouraging an influx of technical talent

Beyond financing research and infrastructure, the Canadian government is also supporting a flood of scientific talent through favorable economic and immigration policies. According to Forbes, 43% of Fortune 500 companies were founded by immigrants or their children, and the top quantum companies will be no different. Recognizing this, the Canadian government has created tangible programs to incentivize the immigration of foreign entrepreneurs and scientists:

First, the Global Skills Strategy offers an alternative, fast-track for highly skilled foreign workers to immigrate as permanent residents by demonstrating “unique and/or specialized talent” and bypassing the typical immigration requirements. Through this program, Canadian employers can recruit top talent and secure work permits in as quickly as 10 business days.

Second, Canada’s Startup Visa program is perhaps the most globally progressive, with $4.6 million in funding slated for 2018. Similar to the Global Skills Strategy, it encourages foreign workers, but is primarily aimed at making it easier for startup CEOs to enter the country, secure venture funding and create jobs for Canadians.

In contrast, the US has become less attractive for international talent because of increasingly restricted immigration policies under the Trump administration, which will no doubt hinder its long-term quantum aspirations.

5. The startup scene is primed for growth

As a result of the confluence of world-class research institutions, healthy investments, government support and talent, the Ontario startup community is like a revved engine. In fact, many of the brightest minds are now working together at the world’s first quantum-focused tech accelerator, a sub-program of the Creative Destruction Lab (CDL) in Toronto.

The CDL is betting that this density will play a role in tipping the scales in Canada’s favor. The accelerator, which accepted 21 companies and 40 quantum physicists into 2017's inagural program, predicts that “by 2022 it will have created more commercially viable, well-capitalized, revenue-generating quantum machine learning companies than the rest of the world combined”.

Xanadu, one of the rising stars from CDL (who participated in the program a year before the quantum track was officially unveiled), agrees. According to CEO Christian Weedbrook, these incubator programs “are attracting a lot of talent” which is critical to solving the tough technological challenges posed by quantum. Xanadu itself is an example of what’s possible, as they are competing on a global scale already, recently winning major pilots away from the large corporates.

Why does it matter?

While it’s not yet clear what the first killer quantum application will be, it is clear that the nation that creates it first will gain enormous economic, political and national security advantages. Whether it’s used to decrypt and expose secrets, to patent medical breakthroughs, or render computer systems hack-proof, one thing is for certain — quantum technology has the power to dramatically alter the course of history in the direction of it’s conqueror.

With stakes that high, the global race is on.

At this early stage, it is definitely still anyone’s game, but with the wind at their backs and a healthy head start, the quantum race is Canada’s to lose.

Please note: views my own and may not reflect not those of my employer