The UK’s quantum advantage is about to pay off, but a review of government spending risks squandering it

The world of technology moves slower than described. Venture capitalists (VCs) often tell their investors (LPs) that returns take five to seven years. Privately, everyone knows it’s closer to 15. But the best VCs and LPs (and governments) invest for the long term and get huge rewards for doing so.

The last time the UK had a Labor government was 2010. Nobody had heard of Airbnb or Uber. SaaS was booming and the term “deeptech” was practically unheard of.

Over the past decade or so, the tech world has begun to realize that sustainable growth changes and positive impact cannot come from software development alone. Great technological breakthroughs in underlying engineering are what not only create huge value, but also long-term societal benefits.

For example, the boom in SaaS companies has been fueled by the underlying growth in computing capacity, supported by, among other things, the development of semiconductors and the advent of extended cloud computing. Twenty to 30 years ago, UK semiconductor leader Arm and others were small, enterprise- and government-backed innovative teams led by ambitious and visionary founders.

There are early stage technologies today that will have the same level of impact. Taking the evolution of computing as a case study, to understand what it looks like in 20 years, we need to turn to the next frontier in computing: quantum computing.

Quantum computing is a complete departure from the way we’ve done computing up until now. The development of today’s computing has given us the ability to create “digital twins” of the macroscopic world – from financial services to aviation. Quantum computing will allow us to create digital twins of the world on a very small scale – and one day be able to design and predict how atoms come together to form everything around us.

Not only is quantum computing predicted to add an extra £1.3 trillion to global GDP – across areas such as automotive, chemicals, financial services and life sciences – but it will also be one of the best and our most important tools to tackle some of the world’s biggest challenges, such as the climate and energy crisis.

The UK has historically been a world leader in quantum mechanics. Much of today’s quantum mechanics was developed in Britain, particularly in the world-renowned Cavendish Laboratory at the University of Cambridge, which was the famous home of Paul Dirac, one of the godfathers of quantum computing. This academic leadership is what attracted me to the UK as an international student in the first place.

Strategically building on this foundation, the UK was the first nation to launch a national quantum strategy in 2013, with £1 billion behind it. It comprised a decade-long plan to move the needle for British quantum from academia to industry. It backed venture capital firms that were savvy in deeptech, such as Cambridge-based Amadeus or Oxford Science Ventures, to name just a few. This has spawned several quantum spinouts that are now considered world leaders in the quantum computing stack. These companies have raised tens of millions of pounds each in seed and Series A rounds, employ thousands of people in the UK and are ready to scale and bring these incredible technologies to market.

This is already starting to pay off. Venture capital funding for early-stage quantum startups in the UK and EMEA in general has significantly exceeded the level of capital flowing into the space across the pond in the US. Last year, venture capital funds raised for EMEA quant startups more than tripled. which grossed in the US ($781 million vs. $240 million). As a result, EMEA startups raised nearly two-thirds of the $1.2 billion invested by VCs globally in the sector in 2023. Private investor interest, skills and commitment to quantum potential in the UK and EMEA , are generally clear to see.

In February 2023, a further £2.5bn was pledged to shore up the UK sum by the last Conservative government which was strategically deployed over 10 years. The aim of the funding was to carry out five ambitious “quantum missions”, each with potentially huge benefits for society. Although it has been announced, it has not yet been actually implemented. The government is currently carrying out a one-year spending review and a multi-year spending review will take place in the spring.

Right now, these world-leading startups are looking for Series B and C funding – the well-known point where UK and European funds have traditionally been too small to lead such rounds. When great technological breakthroughs occur, they have the potential to usher in new economic realities. New quantum NVIDIAs and Microsofts will be born and today, there is a good chance that one or more of these will come from the UK. We’re at the point in the quantum technology cycle where we could actually see a spike in hockey sticks soon, and over the next decade hundreds of millions are coming back to the UK, creating a flywheel of innovation in the process. But only if we stay the course.

The new Labor government must build on previous successes and continue to invest to deliver and scale world-changing innovations. They don’t have to reduce a winning bet just for the sake of playing it safe. The government, investors and founders must decide whether they are investing to win or simply not to lose.

More mandatory comments posted by wealth:

Opinions expressed in Fortune.com comments are solely the opinions of their authors and do not necessarily reflect the opinions and beliefs of wealth.

Explore our new special issue. A Wall Street legend gets a makeover, crypto iniquity, poultry rights and more. Read the stories.