Next step for quantum industries in the UK: Part 1

(data gathered from LinkedIn ‘company description’ pages). 

They say a picture is worth a thousand words and this is a case in point. Quantum may not yet have captured the public imagination in the same way as artificial intelligence, but the graph shows that academic research is translating into new businesses at a rate of knots. Many of those companies are based in the UK. According to recent research, the UK is home to the second largest number of quantum companies in the world (after the United States). 

Quantum: what’s coming in the second 100 years? 

The field of quantum mechanics was established in the 1920s, revolutionising our understanding of how the tiniest things in the universe behave. The physicist Richard Feynman once said that “nobody understands quantum mechanics”, but you don’t have to understand it to appreciate some of the discoveries that depend upon it, including lasers, MRI scanners and most modern computing and electronics. As the curtain comes down on 2025 and the International Year of Quantum, Louis Barson from the Institute of Physics enthused about what the second 100 years of quantum would bring. He predicted that the next 100 years of quantum would be as transformative as the first if the UK doubles down on its early success. 

Quantum policy: building on early successes

Physicist & science policy expert, Sir Peter Knight, said that the UK should focus on creating conditions which allow quantum-focused organisations to rapidly develop their technology and grow their businesses. He noted that it was critical for start-ups to have access to support to manage the challenging “valley of death” stage of commercialisation, where companies are pre-revenue and products are still in development. The UK National Quantum Technologies Programme (NQTP) has been fulfilling this role, building an industry led “Challenge Fund” to catalyse company involvement, using collaborative grants, procurement, and early-stage equity investment. 

The UK is in a strong position to reap the economic benefits of quantum technologies, Sir Peter said, noting our world leading science profile, early stage VC funding landscape and successful collaboration between Government, academia and industry. Challenges remain, however, notably: 

• access to scale up capital
• building infrastructure that will allow continued world-leading quantum research
• fragile supply chains for the components needed to commercialise quantum technology

Overall, Sir Peter feels the UK “has done extraordinarily well” in creating the conditions for its quantum businesses to thrive, but that we now need to devote equal attention to helping those businesses scale up. He stressed the need for ‘patient capital’, noting that quantum investments have a huge potential payoff, but not necessarily in short timescales.

The voice of Government: investing for growth

Tom Newby, head of the Government’s Office for Quantum, shared an Oxford Economics projection that quantum technologies would create 100,000 UK jobs and generate up to £11bn in annual GDP.  A variety of different technologies are expected to contribute to that. Many, but not all, of these rely on the development of more powerful and fault-tolerant quantum computers. Expected applications include: 

• Healthcare: medical imaging, vaccine and drug development, and DNA sequencing
• Industry: greener carbon capture, optimising supply chains and manufacturing processes
• Finance: portfolio optimisation
• Defence: new navigation and radar technology
• Cybersecurity: quantum enabled cryptography

Newby said that quantum was central to the UK’s Modern Industrial Strategy, published earlier this year. He noted that quantum was named as one of six priority frontier technologies in the Digital and Technologies Sector Plan, with £670m new quantum funding being released in Spring 2026, including a 10-year funding settlement for the National Quantum Computing Centre. 

Conclusion

Mills & Reeve has been taking a close interest in the developing quantum industries and has already advised clients in this space. See here for previous articles on the subject: 

• UK's quantum computing landscape and investment opportunities
• Securing the future: UK's quantum computing landscape

Stay tuned for Part 2 of our key take home messages from the Westminster Forum quantum event, and please get in touch if interested in or affected by any of the issues raised in this article.