Before signing the bills into law, Gov. JB Pritzker debated a series of bills aimed at economic development, particularly the establishment of a tax incentive program for the quantum technology industry.
Andrew Adams/Capitol News Illinois
Governor J.B. Pritzker on Wednesday gave final approval to a plan to bolster the state’s high-tech industry, including a $500 million state budget incentives package aimed at making Illinois a national leader in quantum computing.
The bill expands tax credits for the film industry, extends the research and development tax credit program for five years and expands eligibility for companies to claim tax credits under a program originally launched to support the electric vehicle and microchip industries.
The bill’s backers, including business leaders and labor union representatives, say it will help attract businesses to the state, spur growth and create jobs. The program is expected to bring in $21 billion in new revenue to the state over the next 30 years, according to the governor’s office.
The biggest new program enacted in the bill would designate a “quantum campus” somewhere in the state, where businesses could receive construction, materials purchase and use tax breaks similar to those available under the existing business district program.
That’s in addition to $500 million in capital funding approved earlier this month as part of the state’s budget for next fiscal year, including $100 million for construction on the site, $200 million for a cryogenics facility and $200 million in matching funds for federal grant programs. That’s on top of the $200 million the state spent on quantum computing four years ago.
The bill would open up several existing programs to quantum computing companies, including the Manufacturing Illinois Chips for Real Opportunities (MICRO) program, which was created in 2022 to boost the semiconductor industry.
The site selection for the quantum campus is currently underway, but it will likely be in or near Chicago, which is already home to the Chicago Quantum Exchange, a partnership between the region’s leading universities and two Chicago-area national laboratories, and the Block Quantum Technology Hub, a federally supported research hub. The city is also home to several quantum-related startups, including EeroQ, qBraid, and memQ.
The Quantum Garage at the Fermi National Accelerator Laboratory in Batavia is one of the largest quantum research facilities in India. This new laboratory is equipped with cutting-edge technology to research and develop new methods in quantum computing and sensing.
Courtesy of Fermi National Accelerator Laboratory
The technology has attracted a lot of attention because of its potential to transform computing, communications, and several fields of research, with governments around the world pouring billions of dollars into research.
Quantum technology relies on the often counterintuitive behavior of elementary particles: until they are observed, they exist in multiple locations simultaneously, becoming “entangled,” so that acting on one particle can have the same effect on another. If engineered properly, these properties can lead to machines that are orders of magnitude more powerful than building-sized supercomputers.
“Even a moderately sized quantum computer could store more information than any atom in the observable universe,” David Aushalom, a professor of quantum science and engineering at the University of Chicago, told Capitol News Illinois.
Another advantage of this technology compared to traditional computing is its speed: in 2019, a team of Google researchers published a paper claiming that their computer performed in 200 seconds a task that would take a modern supercomputer about 10,000 years to complete.
The machine uses 53 qubits (short for quantum bits, the basic unit of computer information), and Awschalom says that each additional qubit doubles the machine’s power, dramatically increasing computer power.
Last year, IBM researchers unveiled a quantum computer chip with 1,121 qubits.
Still, the field is young and its future is uncertain: quantum machines can generate “noise” because simply observing any component can change its behavior. This requires that the core of the machine be sealed off from the outside world, making quantum error correction an unsolved technical problem in the research field.
At this early stage, it’s also difficult to pinpoint exactly how quantum technology might be used. Aushalom said developments in quantum technology could have an impact as big as early research in the 1940s and ’50s into the transistor, the component that makes modern computers possible.
“Back then, no one was thinking about integrated circuits, no one could imagine putting billions of integrated circuits on a chip. It wasn’t even on people’s radar,” he says. “But what about GPS? What about cell phones? So today, with this new technology, one of the most exciting things about it is that the thing that will probably have the greatest impact is still right in front of us, and we may not even see it yet.”
To avoid repeating the mistakes made with the internet 30 years ago, Pritzker said the state needs to take control of the industry at this early stage, when few people can explain what quantum computers are and practical applications are still theoretical. He noted that the first web browser and early internet startups like PayPal and YouTube were born in Illinois.
“We were poised to be a leading state in internet development in the early ’90s and late ’80s, but in 1990, most people didn’t know what the internet was…” Pritzker said. “Nobody in the state had a strategy for, ‘How do we keep these companies and their industrial development in Illinois?’ And because we didn’t have a strategy, companies up and left.”
In an application for federal funding, the Block Quantum Technologies Hub, a federally supported research hub in Chicago, claimed it would “generate $8.7 billion in annual economic impact and create 5,300 to 8,000 high-paying jobs” by 2035.
Incentives for green technology, film, research and development
The Pritzker administration and Illinois lawmakers’ interest in quantum computing reflects the state’s involvement in other industries, including electric vehicles, semiconductors and the film industry.
In one of the most recent of these programs, the Reimagining Energy and Vehicles program, Illinois awarded $1 billion in grants to 10 manufacturing companies with some connection to the electric vehicle industry or renewable energy. According to the Department of Commerce and Economic Opportunity, these contracts will create 4,600 new jobs and require the companies to retain 7,200 existing jobs.
The law signed Wednesday expands the program to include research and development-stage companies, net-zero carbon steelmakers and companies that build electric aircraft.
Intersect Illinois, the economic development agency created by then-Governor Bruce Rauner that has brokered many of the state’s largest business deals since its inception eight years ago, told Capitol News Illinois that while the tax credit program is a “critical part” of the state’s toolkit, it’s not the only reason companies locate in the state.
“State incentives like the REV (Reimagining Energy and Vehicles) Act have helped attract significant investment and thousands of high-paying jobs to EV companies like Rivian, Gotion and TCCI,” Intersect Illinois Chairman John Atkinson said in a statement. “At the same time, these companies cite the state’s infrastructure and workforce as a reason to grow here, and with that added state support, it really is the perfect package.”
Pritzker argued that this industry-based economic development model is a way to give Illinois an advantage in industries where it has a “right to win” and to increase the number of industries the state can rely on during economic downturns.
“When we as a nation or the world as a whole go through difficult economic times, Illinois tends not to get hit as hard as other places that rely on one or two industries,” Pritzker said Wednesday.
In addition to programs that foster Illinois’ industrial strategy, the new law also expands one of Illinois’ most popular and longest-running tax credit programs.
The Economic Development for Growing Economies (EDGE) program, created 25 years ago to encourage companies to relocate and expand, would offer a 15-year benefits package to businesses that plan to create 100 or more jobs, five years longer than what is offered now.
In 2022, the most recent year for which data is available, the program awarded $38.2 million in credits to 38 businesses in the state, according to a report filed with the Department of Commerce and Economic Opportunity.
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