Time to start planning for quantum
This article is republished with permission from I by IMD, the knowledge platform of IMD Business School. You may access the original article here.
Business interest in quantum computing has been steadily increasing. Landmark moments, such as Google’s announcement that it had performed the first exclusively quantum computer operation, have grabbed widespread attention. This attention is driving a shift in how quantum computing is perceived, taking it from a niche technical curiosity to a serious topic occurring regularly within mainstream business-technology discussions.
The million-dollar question is, when should companies start investing in the technology? While that remains unclear, it could arrive sooner than many might expect, and companies should start thinking seriously about what a venture into quantum might mean for them. New research from EY has found that nearly half (48 per cent) of large companies polled in the UK believe that quantum computing will play a significant role in their businesses by 2025.
Now’s the time
For a growing number of businesses, the time to engage with quantum has already arrived. Already, EY’s research shows that over 100 companies made public quantum computing use case announcements in 2021.
Unsurprisingly, the sectors taking the lead in investigating quantum potential are those experiencing challenges that could be best addressed by the exponential expansion of computing power that it promises. Interested sectors include financial services and banking, looking into pricing and portfolio optimisation; automotive, in relation to battery technology and self-driving vehicles; and logistics, in terms of optimising routing and packing techniques. But the range is extensive, ranging from carbon capture and storage simulations to protein folding modeling.
Although these sectors have taken the lead, it is difficult to single out any economic area that would fail to benefit from the future application of quantum. Expecting quantum to play a significant role in business by 2025 sounds ambitious – and setting any timeline is, to an extent, inherently arbitrary. However, quantum may reach a viable level of commercial availability in a relatively short time, given growing levels of R&D investment and the steady drumbeat of technical breakthroughs. Other quantum technologies, such as in quantum sensing and quantum communications, may well be making an impact even sooner.
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Actions not (just) words
When a breakthrough does come with a real-world application, it is likely to be transformative. The first companies to deploy quantum solutions effectively will inevitably gain a distinct competitive advantage over their rivals – one which could last for many years. This will be especially pronounced if they’ve taken the time to set up the right conditions for supporting quantum, another strong driver of forward-planning.
Planning for quantum means committing to the long haul by laying the foundations of knowledge and expertise. We believe that CTOs and other executives should start considering the following key aspects as they develop their quantum business plans.
Do your homework. At a baseline level, ensure that your organisation is keeping pace with the current scientific publications on quantum computing, to keep abreast of how things are progressing.
It could be a long journey. There’s an old saying: If you want to go fast, go alone; but if you want to go far, go together. To do both, businesses need to establish a long-term, unified commitment to quantum. Start discussions with senior leaders across the business about how the technology could impact their critical strategic challenges in the coming years. How could it assist problem-solving? What are the potential impacts on sustainability and the transition to net zero? Focus on business needs, rather than inventing uses for the technology. Look for opportunities to set up sprints that bring stakeholders together to work on defined projects; these will form the building blocks of a scientifically robust store of quantum knowledge upon which the business can draw going forward.
Develop internal knowledge and expertise. If organisations merely dip their toes in quantum computing, leaving the heavy lifting to outsourced providers, they may deliver results via a narrowly defined project, but will learn nothing through the process. Instead, they should pursue a collaborative research approach to building knowledge and internal expertise. Hire people who understand the emerging scientific research and can cut through the hype to the core information. Adoption of previous technologies has often been characterised by shortages of critical skills and intense competition for talent, so make sure you are storing knowledge and building your quantum skills base as you experiment. These in-house quantum experts can, in turn, train new recruits to the cause. Finally, consider appointing a dedicated leader for quantum to help oversee and coordinate efforts in this area, which companies such as BMW, BP, HSBC, and JP Morgan Chase have done.
Harness the power of the ecosystem. As new technologies emerge, ecosystems form around them – and there is significant value in connecting with them at an early stage. Most businesses will partner with major third-party cloud vendors to access quantum computing, so look to develop an understanding of what your business will require in this regard. Capturing talent and resources, building partnerships, and driving value will become more expensive as the technology scales: early movers have the ability to build a competitive advantage.
Consider the potential impact. Don’t just think about how quantum will affect your company; think about how it will affect the future of your sector, including your supply chains and customers, but also your competitors. Within the global Fortune 500, there is a growing list of companies that are actively exploring quantum and the advantages it offers. It’ll be important to understand what your rivals are doing, and the implications that may pose for your business.
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Consider both opportunities and risks. As with any new and untried business proposition, organisations must consider the risks as well as the opportunities. Any future issues with quantum may seem trivial in light of geopolitical instability, supply-chain issues, talent shortages, soaring inflation, and more, and so the investment in quantum should be proportionate. Nevertheless, when it does land, quantum has the potential to be extremely high-impact: both in terms of the potential for competitive advantage, but also because of new strategic risks it might pose, such as the potential to crack today’s encryption. As such, leaders need to monitor the potential risks closely.
Navigate based on probability. When you don’t know what the way ahead looks like, a smart approach is to proceed with caution, adjusting as conditions dictate. This could serve businesses well as they venture into quantum waters. Making decisions based on perceived probabilities, knowing that not every decision will pay off, will be essential risk management. By taking quick, iterative steps based on what looks likely, even if there are no major gains there will be little chance of serious losses and, either way, valuable lessons will be learned and knowledge acquired.
The emergence of quantum computing has the potential to revolutionise business in the coming years. Leaders would be well advised to begin stepping up their research initiatives to explore its possible application in their organisations. It’s time to start planning for the quantum future.
Piers Clinton-Tarestad is Quantum Computing Leader UKi, EY, Justin Ging is Chief Product Officer, Atom Computing, and Denise Ruffner is Chief Business Officer, Atom Computing.