10,000 word survey Quantum computing will be on the commercial market within five years
Recently, IQM Quantum Computers, OpenOcean and Lakestar, in association with The Quantum Insider (TQI), released the State of Quantum 2022 report. This is a new study that explores how the readiness of business leaders for quantum technology varies across key geographies and industries; specifically, the paper provides insights on how quantum companies, supported by public and private funding, can bridge the gap between the speed and direction of quantum technology development, and their customers' plans.
"In which country do you mainly work?" (n=174)
66% of businesses surveyed identified software development as a key priority for quantumisation investment; 76% of respondents agreed that the skills crisis is causing a slowdown in quantum innovation; 63% of business leaders expect to have a commercial use for quantum computing in the next five years; and 91% of business leaders surveyed are already investing or planning to invest in quantum computing.
In summary, the core findings of this survey include.
1) A thriving ecosystem of industry customers continues to grow as investment figures in quantum hardware and software rise: each party supporting the technology with significant R&D budgets to commercialise it over the next decade.
2) A dedicated quantum leadership position: a Chief Quantum Officer will become critical as boards assess the rapid growth of quantum computing and the multiple opportunities it offers companies commercially.
3) Having focused leadership will be critical in taking steps to address the quantum skills shortage that is holding back progress, and in building a long-term people strategy for investment and adoption of the technology.
4) A high percentage of industry leaders see the potential of quantum technology in a range of specific applications, particularly in cyber security, finance and healthcare.
5) There is a renewed focus on the need to support the development and advancement of full-stack quantum technologies. While prioritising investment in software, the survey revealed that industry customers believe that running quantum hardware is currently unsustainable for their operations, noting the large proportion of the budget required to run quantum hardware.
From 2017 to 2021, investment in quantum grows five-fold: from $400 million in 2017 to a new high of $2.2 billion in 2021, and it's not going to slow down; total government spending and commitment to quantum technology is in the tens of billions, with new plans and initiatives being announced regularly. The Boston Consulting Group estimates that quantum computing could create $450 billion to $850 billion in value over the next 15 to 30 years. 90% believe that their company operations will be transformed by quantum computing by 2030. Customer interest and appetite for quantum investment is high, and it is now up to the quantum industry to listen to this quantum state and take action: to ensure that this engagement is matched by continued progress in developing and bringing quantum use cases to market.
01A Quantum Practitioner's Perspective - Terra Quantum
Markus Pflitsch, CEO and founder of Terra Quantum
As the saying goes, software eats the world. This will be no different in the quantum space. We are currently at a stage of technological development where quantum software, if we deploy it in the right way, already offers huge immediate potential for optimising and improving business performance compared to hardware. Today's world is built on a broken computing stack, with classical algorithms running on classical computers. By relying on this classical approach to computing, we are also prevented from solving some of the world's biggest and most critical problems. Quantum holds the solution, the question is how to execute on that technology. We need a complete computational stack built on quanta, but quantum hardware is not yet truly scalable.
This raises the question: how do we deploy quantum software today to deliver real industry performance gains?
Industry leaders are tired of discussing quantum technology developments measured in 5 to 10 years or more; business leaders want to see real applications and tangible solutions today. At Terra Quantum, we are committed to this vision: unleashing the power of quantum technology to deliver powerful and meaningful solutions and enable today's organisations to unlock some of their quantum potential.
Together with our subsidiary QMware, we have come up with the world's first unique hybrid approach to a global quantum cloud, allowing customers to use both current quantum hardware and simulated quantum bits. By combining algorithms running on both local and simulated quantum bits, we can dramatically improve business performance through quantum applications.
There are three key categories of our algorithms: optimisation, simulation and machine learning. We offer end-to-end capabilities in quantum algorithm design, quantum computing and quantum security, designed to deliver the next level of performance to the enterprise today.
It is critical to double down on the commercialisation of quantum now, as the technology continues to grow. Quantum technology has a wide range of potential applications, providing solutions for a variety of multi-billion dollar industries, including logistics, aerospace, financial services, automotive, chemicals, utilities and healthcare. Many of these companies share the common problem of making the most of complex data sets and vast networks of requirements. Quantum algorithms have potential use cases that can be scaled up and replicated across different industries. For example, the use of quantum to enhance image perception and recognition can be applied to both self-driving cars and greatly enhanced medical diagnostics. In addition, Terra Quantum is working with an industry leader in Europe to optimise route planning for trucks to reduce idle miles, able to minimise costs while supporting sustainability goals.
Looking ahead, the future is bright for Quantum. There is great potential for quantum software to grow and prosper. Quantum hardware continues to scale, and performance is accelerating as native quantum chips begin to advance and eventually surpass analogue quantum bits. One of our biggest challenges as an industry is to win over the unconvinced, the potential customers who don't see the promise of quantum technology. The key to doing so is to connect the technology to their priorities: customers ultimately care about driving business performance.
At Terra Quantum, we see ourselves as a business and performance enhancement company first and a quantum company second. Standing at the start of this revolution, we feel excited and responsible for the applications and tools we are developing. Europe has a great opportunity to lead this journey, build a strong and thriving ecosystem of disruptive start-ups and promote European tech sovereignty. We are ready to take an independent leadership role in the quantum revolution and to be pioneers of technological solutions and real-life applications that shape a bright future for human prosperity.
02Blueprint: Trends in quantum applications and strategic planning
The business decision-makers who responded to this survey showed great confidence in the potential of quantum. This confidence is evident not only in their stated beliefs, but also (and perhaps more tellingly) in their budgetary investments and their organisational positioning: companies of all sizes and verticals are now going to great lengths to ensure that they are in the strongest possible position to take advantage of the coming advances in quantum technology.
The IQM-OpenOcean-Lakestar survey shows a high appetite for investing in real use cases and adopting the technology. 70% of business leaders surveyed said they are using and developing real-life use cases; only 4% are not using and have no plans to adopt quantum technology in the next five years.
Customers are taking the necessary steps to prepare and plan for the expansion of quantum computing in their business. 77% of respondents said they are confident that their organisation is ready to use quantum computing; leaders in the UK are more confident in their organisation's quantum readiness (85%) and preparedness than leaders in the US (78%) or France (69%). This readiness is critical to quantum readiness.
Businesses are supporting this by taking concrete action to make themselves quantum ready: 91% of business leaders surveyed have already invested in quantum computing or plan to do so.
"To what extent do you agree or disagree with the statement that quantum computing will only be useful for businesses to implement specific applications?" ; (n=174)
Large corporations are supporting quantum as an important part of their industry's future. Boeing, for example, has partnered with IBM to speed up the time it takes to test and optimise materials. This important component of the aerospace industry relies on months of long hours to test and certify materials for use in aircraft, slowing innovation at every step; quantum computing is supported by Boeing to improve the efficiency of these aerospace material evaluations, including understanding how materials respond to environmental conditions and more advanced capabilities for estimating service life and performance.
In the study, 83% of companies are spending at least 10% of their R&D budgets on quantum, while 80% plan to invest at least $500,000 and 61% plan to invest $1 million or more in quantum over the next three years. As a result, the amount these companies are investing in quantum computing is high as a percentage of total R&D spending and in absolute terms.
How much does your organisation plan to invest in quantum over the next three years?
This varies by geography. Companies in the US are more than twice as likely to invest $20 million or more than companies in the UK (13% vs. 5%). The differences around the world reflect the differences in the quantum ecosystem, with distinct research centres in Europe, the US and China; there is also the issue of concentration of corporate users, with many quantum companies being attracted to large multinational companies in the US and China.
Investment from the private sector is being supported by significant public funding for quantum. According to The Quantum Insider, the top five governments worldwide for quantum support (deployed and announced) include
China: ~$5 billion plus
Germany: US$3 billion
USA: US$2.8 billion
UK: US$1.2 billion
EU: US$1.1 billion
Companies generally seem to believe that their investments in quantum technology are producing the desired results: 67% say their quantum strategy is consistently meeting or exceeding its objectives (compared to 10% who say their strategy is not). For those who are not satisfied with the results their quantum strategy is producing, the most common reasons relate to several key areas.
Lack of skilled professionals
Funding
R&D
Time
These areas of shortage are closely linked to the key priorities that business leaders have for quantum over the next three years. The top three strategic priorities for quantum are accelerating R&D cycles/reducing time to market (53%), recruiting skilled people for quantum technologies (52%), and expanding funding to invest in product/solution development (44%). Certainly, recruiting more technical staff will help address the talent shortage, while accelerating R&D and expanding funding will help identify new use cases, aid development, and generally drive their adoption across the enterprise.
03A journey through the quantum age, some open views ......
Ekaterina Almasque, General Partner at OpenOcean
As an early investor in cutting-edge technologies, OpenOcean is passionate about supporting emerging leaders in quantum computing in Europe. We believe in anchoring nascent industries by investing in successful teams. Our mission is to help these teams build a strong ecosystem on top of their technology platform, accelerating long-term adoption and growth. Our founders learned first-hand the value of this approach when they were involved in building MySQL and MariaDB (the "M" in the LAMP stack), which is the foundation of the Internet as we know it today.
In 2018, when the IQM quantum computer was spun off from Aalto University and the VTT Technical Research Centre of Finland, OpenOcean believed in the vision that quantum computing would revolutionise the world of high performance computing. Today, we continue to support that vision by accumulating positive evidence that we are indeed on a journey to the quantum age; most recently, we participated in IQM's €128 million Series A funding round as they build Finland's first 54-bit quantum computer. Thanks to their unique co-design approach, IQM's quantum processors can significantly reduce hardware requirements, such as the number of quantum bits or gate depth, compared to conventional machines.
We have also seen the success of other players, including in particular IBM's recently announced 433-bit quantum machine, the largest ever built. The results of this survey show that the market is embracing these technological advances, with only 10% of survey respondents cautious about the emergence of functional use cases and 63% of business leaders expecting to see commercial use cases in the next five years.
At the processor level, the hardware battle is being won, but many challenges remain in terms of scaling. As OpenOcean is traditionally a software investor, it is exciting to see that 66% of companies see software development as a key priority for quantum investments. Companies will need to start thinking strategically about how they will operate in the quantum era; many of the benefits of the quantum advantage are still being identified, but it is important that companies start to understand how quantum software can and will be integrated into their existing stacks.
It may be useful to draw analogies between quantum and classical paradigms to predict the scale of software requirements, from the NISQ era, to application-specific machines, to fault-tolerant general-purpose quantum computers. To counter the 33% of businesses who think we will only achieve application-specific usefulness, we will need a quantum operating system as a gateway to advanced applications. This may be something for the future, but we are already seeing software components emerge alongside hardware at the control and architecture levels, with a lot of activity in both the startup ecosystem and the larger enterprises.
At the control level, a key issue is the stability of the noise-sensitive quantum bits and the imperfection of the overall system, which leads to the need for tedious manual work by highly skilled scientists today. For this reason, there is plenty of scope for automation of quantum bit tuning and optimisation: this will only increase as we scale to larger numbers. While this is something that can be developed in-house by hardware vendors, we are seeing software startups gaining traction, the biggest being Q-CTRL from Australia, which has received $43.4 million in funding from the likes of Airbus, Sequoia China and In-Q-Tel.
We can also look at the short-term software game at an architectural level, and in the longer term we expect to see quantum cores, error correction and Q-RAM. here are a number of software start-ups doing work that is critical to unlocking the multi-billion dollar quantum computing market: the most established company is Riverlane from the UK, which has raised $24.1 million from Amadeus, Molton and Cambridge Innovation Capital raising $24.1 million; Riverlane is initially focused on error correction, which is also designed to address the inherent instability of quantum bits, with the long-term goal of becoming a universal quantum operating system.
At a higher level, there is powerful software emerging, with the likes of Google, AWS, Microsoft and IBM all launching open source quantum circuit programming and even early machine learning frameworks. We are excited to see these developments and the emphasis on open source to help drive the quantum software community forward. However, at this level, simulators are still commonplace and hardware details heavily influence the results.
Looking down the road, we can find the basic software that allows these frameworks to run effectively on scaled-up quantum hardware. It is at this level that we need to see significant investment over the next few years in order to move smoothly into the quantum era.
04The benefits and opportunities of quantum
"Where will your organisation place the main areas of its quantum investment in the next 3 years?" (n=174)
Quantum is a broad category that encompasses a large number of technologies, each of which offers different possibilities for businesses.
When it comes to investment, there are many different aspects of quantum and there may be money to concentrate on them, but some will naturally not generate as great a return as others. As quantum technology develops further, the areas considered to hold the greatest promise are likely to change dramatically.
However, the current trend is that end users are seeking full-stack solutions to their business problems, making software investment a favourable proposition alongside hardware commitments. 66% of companies surveyed identified software development as the main priority for quantum investments, with application development being the second highest priority (54% of companies) and expanding a company's internal talent pool the third highest priority (49%). This relative prioritisation of application and software development may be due to the high costs involved in quantum hardware development and the need for specialist skills and tools, leading to a desire to leave physical fabrication to hardware experts.
According to The Quantum Insider, private investment in quantum software rises dramatically from 2017-2022, from $50 million (in 2017) to $700 million in 2022. When business leaders talk about where they think they will be investing in five years' time, the trends are largely similar, with software development and application development most likely to be seen as investment priorities (by 57% and 53% respectively). One change from the current priorities is that building a company's own infrastructure becomes slightly more important (47% consider it a priority), while expanding the internal talent pool is slightly less likely to be considered a priority (down to 39%). This may indicate a long-standing willingness to work with external service providers to integrate the necessary expertise into the respondents' operations.
Research groups and companies around the world are exploring or investing in a number of competing approaches to building quantum computers. One large division between approaches is those based on the gate model, where quantum structures are created with quantum bits, problems are solved with quantum circuits, and methods such as quantum annealing are used to solve problems with systems that can be optimised to the lowest energy state. Gate-based quantum computers are much more difficult to build and maintain, but offer much more powerful and flexible potential uses, while annealers are much less flexible in terms of applications, but much easier to create and maintain. The category of gate-based computers can be further divided into a number of approaches. Some approaches create quantum bits by using superconducting electronic circuits kept at very low temperatures, others use ions trapped in an electric field, still others use spinning charge carriers (spin-based quantum computers), and others include the use of photons (optical quantum computers), neutral atoms and others.
At this point, it is clear that the race is still on to establish a practically usable and commercially viable method of quantum computer. However, the study found that superconducting quantum computers are dominating corporate attention. 49% of the companies surveyed are either using them now or plan to use them within the next five years, a much higher figure than for other types of quantum computers. The next most successful are trapped ion quantum computers (24%), quantum annealers (23%), and spin-based quantum computers (22% of companies use or plan to use them). All other gated models of quantum computers are only used or expected to be used by a combined 20% of companies in the next five years.
More companies in the survey use or plan to use quantum software applications (68%) than use or plan to use any individual type of quantum computer. Quantum software development kits (QSDKs) for developing quantum algorithms and quantum-inspired technologies such as quantum emulators or 'digital annealers' are also more widely used than most types of quantum computers, at 46% and 39% respectively: this indicates a clear interest from end users wishing to experiment with quantum and quantum-inspired technologies.
As quantum hardware capabilities increase, research organisations around the world continue to push commercial applications of quantum computing into supercomputing and high performance computing. As seen from the business leaders surveyed, this has made possible a new era of quantum software applications, as more powerful machines are available for them to run on.
The research institute of the German Research Centre Jülich (FZJ) broke a major milestone in the European quantum field in January 2022 when it put into operation the continent's first quantum annealer with more than 5,000 quantum bits. This is the first example of a commercial quantum system in Europe, and its designers aim to incorporate it into a supercomputing infrastructure. If successful, this could be an example of a quantum computer working directly with a supercomputer and will have direct commercial applications.
Looking elsewhere, the Q-Exa project of the IQM and the Leibniz Centre for Supercomputing (LRZ) in Germany plans to deliver a state-of-the-art 20-bit quantum computer based on superconducting circuits that will be integrated with a superscale system.
Another impressive example of gate-based quantum computing is the "Zuchongzhi 2.1" at the University of Science and Technology of China, which will be unveiled in 2021. With 66 superconducting quantum bits, Zuchongzhi 2.1 is estimated to be millions of times faster than a classical computer. For some complex calculations, it can be implemented in a few hours in the years required by the world's most powerful supercomputers.
When it comes to quantum hardware, the most common deployment (used by 49% of enterprises) is hybrid, mixing on-premises and cloud-based infrastructure. Being entirely on the cloud is the second most common deployment (26% of enterprises), while only 18% of enterprises use an entirely on-premises infrastructure. Cloud computing enables the industry to use quantum computing, providing enterprises with affordable quantum processing power, training and the ability to explore proofs of concept to address a number of challenges. This is known as Quantum as a Service (QaaS) and has huge transformative potential.
As the development of the access toolkit reaches maturity, we will also reach a stage of 'seamless' integration: mainstream applications will be able to invoke quantum-trained models, simulators or optimisers, just as they interact with computing clusters or supercomputers today.
A hybrid model combining in-house systems with QaaS could play an important role in the future commercial utility of quantum. This model would also address business leaders' concerns about the cost of quantum hardware. 61% of business leaders believe that the current cost of running hardware to support quantum computing is unsustainable for their business. In fact, 65% of respondents said that more than 20% of their organisation's technology budget is taken up by costs associated with running quantum computing hardware. With dark clouds gathering over the global economy, managing these costs is critical to encouraging strong and sustainable uptake of quantum technology.
Once enterprises have established their quantum infrastructure, they will plan for a range of different uses of the technology in their business. The use cases that businesses are most likely to investigate are the use of quantum for analytics and statistical modelling (56% of businesses), for R&D (54%) and for supply chain optimisation (35%).
Examples from Japan Post Bank, Mercedes-Benz and Mitsubishi Chemical are illustrative here. Japan Post Bank recently launched a project with A*Quantum, a start-up specialising in quantum computer software development technology, to optimise truck dispatch processes between post offices; Mercedes-Benz and Mitsubishi Chemical have both partnered with IBM to investigate how quantum computing can be used to optimise battery chemistry.
These use cases are driven by the range of benefits that the business leaders surveyed most expect to see from quantum.
56% expect to have the ability to solve entirely new types of problems
53% of business leaders expect to improve operational efficiency
52% predict improved speed and resolution of highly complex problems
43% expect to reduce the time spent processing data
There is a clear link between these benefits: they are all linked to executing processes in a more streamlined way, or with greater speed and efficiency. It seems likely that the desire for improvement in this area is a key motivator and driver of quantum investments.
05IQM Quantum Computers: a shortcut to quantum superiority
Dr Jan Goetz, CEO and co-founder, IQM Quantum Computers
Large-scale scientific computing is in a period of transition. Fitting more transistors onto microchips will become extremely difficult and expensive in the next decade, and will eventually become impossible. This difficulty will start to hinder technological progress sooner than we realise. iQM's position is that we are nowhere near the limits of computing in our time. Through a full-stack approach to building quantum computers and delivering them to the premises, through quantum acceleration of high performance computing centres, and through a co-design approach, IQM can create a fast track to quantum dominance.
1) Quantum acceleration for high performance computing centres
IQM's quantum integration capabilities can combine the two worlds of classical high performance computing and quantum computing, where certain computational tasks are specifically assigned to quantum processing units (QPUs) and the two technologies run in parallel. This combination will accelerate overall computing performance where specific parts of extremely difficult calculations are handled by the QPU, accelerating these tasks exponentially.
2) Delivering a fully integrated in-house quantum computer
IQM's offering is also unique in that IQM's quantum computers can be located on any site and customers can access this hardware in complete security, thereby accelerating research capabilities and speeding up innovation.
IQM has a world-class team of quantum experts who train customers' personnel in building, operating hardware and software algorithms, and in safe and effective maintenance. With its experience in building national projects, IQM offers a rapid way to gain a significant lead in building national quantum ecosystems.
3) Accelerating innovation through application-specific co-design
As this study highlights, one of the most demanding competitive struggles for any company is to prioritise the right problems, the right value drivers and to stay ahead of the curve as the pace of development accelerates. The challenge is to adopt the right technology, to innovate constantly and to maintain continuous improvement to stay relevant. Great companies constantly look at things differently and invest in unconventional approaches to innovate faster and deliver more value to their customers.
4) How can you prepare your company for the quantum age?
Today, it is clear that building critical knowledge for the upcoming quantum age has become an imperative for major industries and leading organisations. It is simply too big a transition to ignore and leave out. The easiest and fastest way to start building quantum readiness is to find a partner with the right technical capabilities and start discovering entirely new ways to accelerate innovation.
At IQM, we work with visionary companies on innovative projects where quantum computing expertise and commercial design meet to address the most demanding applications. This innovation means that in partnership we will work together to design the best adaptation of quantum hardware and algorithms to solve industry-relevant problems.
The aim is to bring a quantum advantage to business problems through optimised algorithms and application-specific quantum processors that classical supercomputing resources simply cannot solve alone.
5) The important question for business leaders is which quantum approach to choose?
Through IQM's co-design approach and the recently announced quantum bit type, the unimon quantum bit, IQM is continuing to innovate and drive quantum computers towards useful applications.
Another important advantage of quantum technology is a sustainable solution to the energy challenges of supercomputers. Reducing the energy consumption of data centres and servers, which contribute significantly to the growing climate crisis. As the global competition for quantum leadership becomes even more important in the coming years, there is no better time to start building quantum readiness for the future. said Dr. Goetz, CEO of IQM: "I am convinced that Europe will lead the world into the quantum era with IQM's quantum computers."
06Building a quantum-ready team for the future
"What barriers, if any, are preventing the adoption of quantum computing technology in your organization?" ; (n=174)
Companies seeking to move towards quantum are faced with a large number of challenges: a lack of sufficient qualified experts makes it very difficult to build quantum teams; without the right team, both quantum adoption and the development of the technology are likely to be slowed down.
In September 2022, the World Economic Forum (WEF) released their insight report The State of Quantum Computing: building a quantum economy, discussing the increasing difficulty of finding "qualified people with previous work experience in business or engineering" in an "already scarce talent pool, as" companies are struggling to find people with the right skills in the emerging quantum job market". However, despite the predominance of highly technical roles, more diverse roles, such as marketing and sales roles requiring previous work experience, are beginning to emerge, indicating a maturing market.
This report confirms these findings from the World Economic Forum. The study found that 91% of companies have already established or plan to establish a team around quantum technology within the next year. However, once a team has been established, other obstacles emerge; disagreements exist around the most important roles within these teams. While 31% believe that quantum research scientists and 18% believe that quantum business translators play a major role in the team, 38% believe that the key role should be filled by quantum software engineers.
Uncertainty about how to structure change as quantum technology gradually enters the workplace may slow its adoption by businesses. As quantum evolves, talent attraction is also becoming a prominent issue. It is becoming increasingly difficult for businesses to hire the right people who can do what is needed. 58% of business leaders surveyed responded that a lack of in-house skills or a qualified workforce is holding back their use and adoption of quantum.
This is inhibiting growth across the industry. 76% agreed that there is a skills crisis when it comes to quantum computing talent, which is slowing down innovation. They believe that this issue needs to be brought to the forefront and addressed as a priority for all leaders. When asked to articulate how their skills crisis is slowing progress and innovation, qualitative comments from respondents included "recruitment difficulties", "delayed implementation", and "existing teams being forced to do more work ".
Government funding for quantum is most widely distributed between China, the US, the UK and the European Union (EU), with this side showing a push to increase the existing talent pool by expanding access to technology and enabling accelerated research.
The UK government was one of the first to establish the National Quantum Strategy's National Quantum Technology Programme (NQTP) in 2014, which has now reached an investment of nearly £1 billion; meanwhile, in 2020, the US government committed to spending $625 million on five quantum information research centres; in the EU, the bloc continues to invest to expand the use of quantum computers, with the European Joint High Performance Computing Project recently announced the selection of six sites across the EU to run the first EuroHPC quantum computers.
This work echoes efforts across the private sector to nurture the next generation of quantum research and talent; this investment is reflected both in funding and collaborations with quantum start-ups and in funding for university research programmes around the world. For the past four years, the Royal Bank of Canada has been following this path, funding quantum research at the University of Waterloo and forging a new partnership with quantum software startup Multiverse Computing: all part of its efforts to use quantum computing to solve the financial industry's most complex challenges.
Tackling the skills crisis depends on companies having access to high-quality quantum education and training. However, 45% of companies rely primarily on in-house experts to do this. This poses a long-term problem. Primarily, experts are under increasing pressure to take on additional responsibilities in a company that is currently understaffed. On top of these duties, they are also required to provide quantitative education and training for existing employees and new recruits. Collaboration with external organisations may provide a short-term solution for these companies as they take the necessary steps to build and develop their quant teams.
The leadership's view and strategy for quantumisation is crucial here. Leadership sets the tone for quantumisation and provides the structure and direction for the development of the business. However, there is an equal divide between companies on who should be responsible for driving this progress and innovation.
Much of the disagreement centres on whether quantumisation falls within the remit of the CIO and IT, or whether a new dedicated role is needed: the Chief Quantum Officer (CQO). the CQO role is primarily found in quantum-focused organisations, but its proliferation may not be limited to research and development.
In an interview with The Quantum Insider, Shai Philips, president of Psirch, said: "As of now, this function seems to be largely limited to new companies developing quantum technologies ...... [but] that's not to say that larger, more established companies working on early adoption of quantum ...... will not begin to create similar senior titles for quantum leaders, perhaps even at the C-suite level."
29% believe that the CIO role will include quantum. In addition, 64% said that the CQO will become almost as important or as important as the CIO. Defining clear roles and responsibilities for hybrid computing and quantum will ensure that the technology does not fall off the radar of the enterprise and will lay the groundwork for the gradual commercialisation of quantum in the coming decades.
According to the survey, "finding the necessary expertise" is the main concern of business leaders in implementing quantum computing and giving it the right functionality to integrate into the business, even more than cost effectiveness, technical limitations and market competition.
When considering the adoption of quantum technologies, it is clear that concerns around the underlying talent gap dominate. The results show that there are three prominent barriers to the adoption of quantum technologies.
1) Lack of in-house skills or qualified workforce. This shortage has the potential to cause companies to take half-measures and become reluctant or even unwilling to transition and embrace quantum computing.
2) The overall immaturity of quantum computing technology. Concerted action is needed by the private sector and government to advance quantum technology standards and industry consortia. Businesses should be included in this discussion in the form of advisory boards and think tanks to create a holistic quantum strategy. Businesses need a clear guide and roadmap to measure the progress of quantumisation and when they are ready to realise some or all of the benefits.
3) The lack of developer skills. The role of developers is critical to the management and progress of quantum computing. Without the right people to operate the different technologies used in quantum computing, it is likely that its commercialisation will be further delayed.
07The way forward direction: commercial applications of quantum computing
"Please select the top three industries that you think will be most affected by quantum computing" (n=174)
There are limitations for companies considering a move towards quantum computing, and the research shows that many are in a state of 'fragmentation'. In fact, 44% believe that the software and tools currently available are not advanced enough to deliver real-world applications on the quantum, while 44% believe they are advanced enough. Business leaders highlighted a number of issues that were seen to affect the usefulness of software and tools. These included
Cost effectiveness
Hardware issues
Investment
Talent
The central theme explored in this survey concerns the divide between the technological advances of the quantum industry and the ambitions and plans of end users, and when asked whether they believe that current discussions about quantum computing exaggerate its realistic capabilities, the response was mixed: more than half (56%) of business leaders disagreed that it is over-sold. For an early-stage technology, this is clearly a strong and growing belief that the current discussion about quantum and all its potential has not gone too far. Indeed, customers are ready and are slowly planning for volumes across the economy. According to the survey results, the 3 most suitable industries for transformation are healthcare (58%), cyber security (58%) and finance (55%).
1) Healthcare, including drug discovery and drug research
The healthcare sector has always struggled with time. Traditional computing often struggles to keep up with the demands of modern healthcare, with long runways to research new treatments and the inability to analyse patient data at scale to enable rapid and personalised care. With the enormous processing power of quantum computing, the field could transform detection and diagnosis, drive the development of new drugs and revolutionise biomedical imaging.
US biotech company Biogen is experimenting with quantum technology to enhance the treatment of neurological disorders. Quantum optimisation, sampling and machine learning algorithms can be used to accelerate drug discovery. Boehringer Ingelheim, a Google Quantum AI partner for the past three years, is another pharmaceutical company pioneering quantum computing to accelerate and optimise the healthcare industry; their goal is to deliver innovative and cutting-edge new drugs in the future.
2) Cybersecurity
The impact of quantum computing on cybersecurity has been widely discussed. Theoretically, its increase in processing power compared to classical computing will allow traditional encryption algorithms to be broken. This stems from traditional cryptography that relies on solving complex mathematical problems; a barrier that would take years for a traditional computer to solve would only take minutes or hours for a sufficiently powerful quantum computer.
To solve this problem, companies are looking for new ways to do so. Technology company Cisco is one of the leaders in exploring potential solutions for quantum key distribution, and Cisco even has its own R&D team piloting quantum computing; the risk of bad actors using quantum technology to profit maliciously has raised concerns in several sectors, particularly the banking industry. Banco Santander has a programme to investigate the risks posed by quantum computing to public key ciphers; in Denmark, Danske Bank is looking at the development of ultra-secure cryptosystems based on quantum physics; in Canada, the Royal Bank of Canada has a long-standing cyber security lab developing cyber security use cases for the company.
3) Finance
The financial sector faces a complex set of challenges to meet the demands of the modern economy, many of which are beyond the capabilities of classical computing. In response, banks and wider financial services companies have begun to invest in and identify use cases for quantum.
In the UK, Natwest is working with the 1QBit algorithm and Fujitsu Digital Annealer to drive rapid decision making for the bank's £120 billion High Quality Liquid Assets (HQLA) portfolio. In Germany, Allianz is testing the use of quantum computing for option valuation and quantifying operational risk: there are also a large and growing number of partnerships between the industry and quantum companies; and in March 2022, HSBC announced a three-year partnership with IBM to explore how quantum computers can be used for pricing and portfolio optimisation, to achieve net zero targets, and to identify and resolve fraudulent activity .
Atos, a global leader in digital transformation, also announced its Life Sciences Centre of Excellence: a centre with cutting-edge technologies in quantum, high performance computing and artificial intelligence, supported by Atos' products, services and expertise in these areas; Atos experts work directly with genomic and biodata research scientists to help drive discovery and innovation in the life sciences.
Despite the optimism and ambition about the future of quantum computing, the enterprise view of today's technology is clear: the focus today is on building application-specific use cases; even, 33% of enterprises believe that quantum computing will only enable application-specific usefulness.
An example of an application-specific quantum processor is IQM's co-designed quantum simulation of nanoscale NMR. In a recent paper, the IQM team demonstrated that a noisy medium-scale quantum computer could be used to simulate and predict nanoscale nuclear magnetic resonance.
How many (percentage) of respondents agreed with the following statement? (n=174)
The idea of building a 'general purpose' quantum computer capable of performing any everyday function is promising, but for this group these long-term goals are not an immediate priority. But as with any disruptive technology, there are those who say "no". In the case of quantum, companies are not completely rejecting the value of quantum computing: 10% of respondents believe that quantum computing will never be useful in everyday use.
The rest of the respondents clearly believe that the implementation of quantum computing is a matter of "when" rather than "if".
Sixty-three per cent believe that commercial quantum computing will be on the market in five years; 90 per cent believe that their company's operations will be transformed by quantum computing by 2030, and 83 per cent predict that commercial quantum computing will be on the market in 10 years. Differing views on the timeline for the commercialisation of quantum computing may influence companies' current quantum investments and the speed at which they move towards quantum readiness. It is worth noting that if commercial quantum computing is defined as winning large partnerships and consulting contracts (often with government support), then it is already happening. On the other hand, if one is referring to mature enterprise use cases that are relevant to many vertical industries and generate billions of dollars, then that is where more progress needs to be made.
Similar to the statistics around CQO and CIO leadership positions and their roles, these statistics suggest that companies have different ideas about the speed of implementation of quantum computing. However, the vast majority of respondents believe that within 5 to 10 years, commercial quantum computing will hit the market and change our world.
08Lakestar's take on the quantum software conundrum
Stephen Nundy, Partner and Chief Technology Officer, Lakestar
There is no doubt that the hardware side of quantum has received a significant amount of attention and investment. In fact, 73% of Quantum's investments since 2018 have been in hardware startups. As a multi-stage, pan-European investor, Lakestar has a strong, broad portfolio of software companies. As a result, Lakestar says quantum software companies are now a key area of focus for this emerging computing paradigm.
"We fundamentally believe that in order for quantum to reach its full potential in the short and long term, we must encourage investment and experimentation in quantum software to enable its early adoption, which is a natural growth for existing platforms and technologies already in development."
1) The quantum status quo
While most quantum-based solutions may still be years away, early use cases are emerging and are already happening today and are already more effective than traditional approaches. While these may not necessarily be the 'step change' or 10x advantage in the headline, they do provide the first signs of validation: as quantum technology continues to mature, it is already showing clear advantages over existing approaches, which will ultimately enhance today's business models based on the business value involved.
Quantum technologies offer potential solutions in the fields of optimisation, simulation and machine learning, ideally suited to complex modelling problems such as drug discovery, new batteries, cryptography, new materials, etc.
Use case 1: Workflow scheduling optimisation for the Volkswagen Group
Determining the optimal flow of tasks on an assembly line, such as quality inspection and paint shop optimisation, is important to maximise the productivity and utility of machines and resources. However, this is a classically tricky problem with high-dimensional, non-linear and complex constraints. With Volkswagen, Terra Quantum is able to optimise this process using its hybrid quantum algorithms, going beyond best-in-class classical solutions and opening up a whole new window of opportunity for industrial companies in a wide range of industries.
Use case 2: Enhanced image recognition for the Volkswagen Group
Image recognition is one of the main use cases for machine learning. However, the large number of parameters that must be taken into account means that computation times are long and expensive. With Terra Quantum's hybrid quantum machine learning and black-box optimisation, image recognition is able to respond to an increase in the size of the search space within the expected running time. Ultimately, this resulted in improved training of the image recognition task while using a much smaller dataset.
Use case 3: Collateral optimisation for large global banks
Optimising collateral is a huge and challenging task for global financial institutions, with approximately $19 trillion of collateral in the global market. The problem of optimising these obligations is one of enormous complexity, with clients needing to choose from a portfolio of thousands of assets to meet these obligations, each falling under a different quality standard.
For a large global bank with nearly €500 billion of collateral, Terra Quantum's hybrid quantum solution is able to achieve funding efficiencies of up to 6 basis points (bps) compared to the best available classical solution. When applied to all debt, this has a potential P&L impact of over €200 million. There are other emerging use cases involving logistics optimisation, flight planning etc.
2) Mainstreaming quantum integration
In order to make these quantum-inspired use cases possible and accelerate them, the entire software stack must be considered, not just the hardware, as engineering teams look to seamlessly integrate quantum into existing platforms.
This is a huge opportunity for stack productisation, especially for software companies that abstract away the complexity of gate logic and instead focus on features and processes that are consistent with today's existing software stacks while providing compatibility with today's computing paradigm. For example, an API-style quantum product would provide users with API access to a quantum-driven solution without the user even having to know it is quantum-driven, or needing to be a quantum engineer themselves.
Lakestar says we fundamentally believe that quantum technology will be introduced into other mainstream technologies, before the team fully localises it.
3) An all-encompassing cloud for the enterprise
History has taught engineers not to get involved in a single hardware game, so there is an innate desire for engineers to be able to change hardware to solve current problems and adapt around a price point where they are willing to pay for performance.
Lakestar's view is that quantum will make no difference. As the team experiments with these first quantum applications, they will want to write quantum code that, when it comes online, can run on a myriad of nascent hardware (e.g. superconductivity, trapping ions, etc.), which is particularly important because the first available hardware is not necessarily the best choice for the long term.
Furthermore, as native quantum hardware technologies are developed, hybrid cloud solutions will be key. This allows hybrid quantum software applications to be executed on a combination of classical or quantum hardware, using either 'analogue quantum bits' or 'physical quantum bits', depending on runtime requirements and technology availability.
Quantum cloud platforms, such as QMware, another company in the Lakestar portfolio, are building this software stack for multi-hybrid (public or private) cloud access, in a world where engineers can be hardware agnostic.
The open quantum architecture allows for the integration of new quantum hardware and scales computational performance as the hardware matures, thus providing users with the latest and highest performance computing power, both classical and quantum-based, in a novel shared memory architecture, with the flexibility to work with the hardware vendor of their choice.
The private cloud implementation enables QMware customers to gain additional benefits such as high availability, no queuing times and an unlimited number of users utilising up to 40 simulated error-free quantum bits. These private containers are set up to the highest security standards, protected by European GDPR security guidelines and implemented in a GAIA-X compliant environment.
09Conclusions and outlook
This report has made one thing clear: quantum computing is becoming a growing reality for business leaders around the world; with investment in the quantum space increasing across the board, the industry customer ecosystem is now thriving.
Businesses are taking steps to investigate the opportunities of this technology and support its commercialisation through significant investment over the next decade. Companies now need to get this strategy right over the next decade and beyond. As boards consider the multiple opportunities of quantum computing, many will begin to move into dedicated quantum leadership roles.
In fact, 64% of business leaders surveyed said that the CQO will become almost as important as the CIO. This focused leadership will put the business in a strong position to address some of the challenges of slowing investment and technology adoption.
The skills crisis in the quantum space remains a major issue for the industry: 76% of respondents believe that the skills crisis is causing a slowdown in innovation.
The quantum industry now needs to ensure that the technology meets the growing interest and investment of industry customers. While industry customers are prioritising investment in software development (66%), at the same time, customers report that quantum hardware is currently unsustainable for their operations and takes up significant budgets just to run.
Addressing these issues will require a renewed focus on developing and advancing full-stack quantum technologies.
Original report：
https://meetiqm.com/uploads/documents/State-of-Quantum-2022-report.pdf
