How a small country can win the quantum race

On 18. November 2024 (so yesterday at the day I am writing this) was the 106th anniversary of the proclamation of the first republic of Latvia. For a young nation like Latvia this day is hugely important, as most people still remember the time of occupation by Russia that lastet more than 50 years. So, national pride and the fight for freedom is not just a distant story in a history book, but it is still very much alive in countries like Latvia, Lithuania and Estonia.

So, in todays 'Entangled Threads' newsletter I want share what I have learned about how a small country like Latvia, Lithuania or Estonia can participate and even thrive in Quantum Technologies, without the need of humongous research budgets. The inspiration and some of the facts I gathered during the 5G Techritory event in Riga, Latvia. I talked already about the event and some of the discussion I had there in my last article, so check it out.

Lets talk about the facts: Latvia is bit smaller than Austria and a bit bigger than Switzerland by size, however, within the country live only 1.8 million people, of which most live in and around the capital city Riga. The rest of the country is, despite for a couple of bigger towns, very sparsely populated. Latvias main natural resource is wood from the vast forests and agricultural goods from its fertile land, however growing seasons are short as Latvia has roughly the same longitude as Stockholm. Unfortunately, Latvia (and the other Baltic states for that matter) had not the same luck as other nordic countries that have natural resources like oil, gold or titanium on their territory. Additionally, the Baltics are sandwiched between 2 historical super powers, Germany and Russia. Over the history many wars were fought on and for their lands, that is why the historian Timothy Snyder called them 'Bloodlands'. So, overall not a great position to build a thriving economy and compete in a globalized world.

However, over the past decade all 3 of the Baltic states have managed to built solid economies and became a beacon for the digitalization in Europe. Some has to do of course with the fact that all 3 nations had to rebuild their administrative structures, their economies and their infrastructure after the end of the Soviet Union. That was a huge challenge, but also a chance, as they could jump over several technological generations and use digital tools to make their economies and communities more efficient and reduce administrative costs. However, part of it is also the focus education that all 3 countries took. If you have only a small amount of people, you better make sure that each of them is as productive as possible.

In all 3 of the Baltic countries you find a significant higher amount of highly educated people compared to the average in Europe. This led many international companies, like 埃森哲 , 高知特 Cognizant or 舍弗勒 , to open near sourcing operations in Latvia, Lithuania and Estonia to tap into the local talent or buy small sized local companies with innovative products. Also the local tech ecosystem is very active and has already produced a couple of world wide known companies like Printify Creations Hub , Pipedrive or Nordigen . Not everything is perfect here, but given the weak starting position all 3 countries performing amazingly well.

We could now pretend that this is due the immense innovation drive and forward thinking of the Latvian people, but living in Latvia for 13 years I know that this is not the truth. The Latvian people are conservative to their core. They like spending their free time with more work, collecting mushrooms and berries, fishing or working on their fields and in their gardens. They don't like going the easy way. Cutting corners, or "being more efficient" how Americans would call it, is fraud upon. Things have to be done how they have to be done. Discussion over.

So, what is now their secret sauce? I think it is a combination of several things. I already talked about the need in the 90th to digitize their public administration. The interesting thing is, that this not just improved the efficiency of the public administration, but it also led to wide expectance of digital products in Latvia. Most grandmas know how to do their taxes or check their blood test results online. Not because they are so technically advanced, just because the alternative is to drive from 'Zaube' with one of the 2 buses every day 2 hours to Riga and in the evening back to do these things in person. It is just more convenient to do it online. This led to a population that is generally accepting digital solutions and knows how to use them.

Additionally, the focus of Latvia was already during Soviet times on education. Latvia had a huge nuclear research center, a life science research center and a research center for computational science already during the Soviet Union. The first computer in the Soviet Union was built and resided in Riga. The products of VEF and other Latvian technology companies were used all over the Soviet Union. This meant a highly educated work force was already existing during the Soviet Union in Riga and around. After the collapse of the Soviet Union the reinstated Latvian Republic had already a highly educated population that was now additionally highly motivated and united to build their young nation and make it strive.

Of course, these exact circumstances are hard to repeat, but I think the story shows 3 main factors for a successful digital society. Education, public acceptance and focus. Will Latvia built it's own quantum computer from scratch or have a self-sustaining quantum industry? With a state budget for science and education of only 180 Million Euros and a GDP of only 40 billion Euros, likely not. But, can Latvia develop and commercialize components for quantum computers, quantum communications and sensors? Can it educated highly trained and motivated specialist in quantum computing, communications and sensing? And, can it develop world-class algorithms that are used all over the world? It absolutely can and it already does so! Latvia is painfully aware of its small size and limited budget, but it is about knowing your strength and weaknesses. All 3 Baltics states do an amazing job in finding innovative ways on how to play their strengths and it shows. I will go into more detail in future articles and you are welcome to contact me if you are interested to know more about quantum technologies, Latvia or get some advice for the best Latvian beer. :)

Let me know your thought on how your country is doing in the digital and quantum race in the comments below. For now, read you next time.