Chapter 1
Quantum outlook and intentions
Quantum-generated disruption will occur within the next five years, believe surveyed UK executives.
Despite the hype and uncertainty surrounding quantum computing, many of the executives who completed our survey are convinced of its development trajectory and potential impact. For example, nearly half (48%) believe quantum computing will play a significant role in their industries by 2025. The vast majority (97%) think quantum will disrupt their industries — as well as the UK economy — to at least some extent by 2027.
What is the cause of such optimism? Our survey was designed to ensure that respondents were familiar with the concept of quantum computing, so that we could understand in more detail what UK companies and public sector organisations thought, and were doing. Consequently, of the 1,516 individuals who received the survey, only 501 qualified to complete it. Of these respondents, almost two-thirds (64%) claim a high level of understanding of quantum computing and all have some knowledge. Almost the same figure — 65% — say that their organisations have a high degree of interest in developing quantum capabilities. Despite the lack of any notable differences in the demographics between those who completed the survey and those who did not — such as the geographic region, industry sector or size of the organisation— we recognise that there is inevitably a more positive bias towards quantum within the sample of respondents.
Apprehensiveness about competitors’ plans is also contributing to quantum zeal. Almost half (47%) of the respondents believe rival firms are working to develop quantum computing capabilities or at least evaluating its potential. Only 3% think the technology is not on their competitors’ agendas.
The practitioners we interviewed for the study — all of whom are closely involved in their organisations’ quantum-related efforts — are more circumspect about the timing of commercialisation and impact. Yet, they are confident that quantum computing will eventually have a disruptive impact.
“We're several years off from full-scale quantum computers, but banks like ours are looking at the potential value now,” says Philip Intallura, Global Business Lead for Quantum Computing at HSBC. “Our current priority is to develop our understanding and focus our research effort on things that, ultimately, we can apply within the bank.”
Morag Watson, Senior Vice President of Digital Science & Engineering at energy firm BP, avoids predicting time frames for maturation. “That risks missing the disruption when it comes, because you won't be out there spotting the weak signals,” she suggests. However, there is already quantum impact for BP. “We are doing work in areas of non-pure quantum computing, building algorithms and use cases, for example, in optimisation.”
According to Paul Coby, Chief Information Officer of Johnson Matthey — a sustainable technologies company — “Taking a five-year view, quantum is just over the horizon. IT’s role at this stage is to support our R&D team, including by finding them the compute power they need in the cloud. Then, we’re trying to understand what the applications will be for quantum.”
Steve Brierley, Chief Executive Officer of Riverlane — a Cambridge, UK quantum engineering and software firm developing an operating system for error-corrected quantum computers — also takes the long view. He emphasises that whilst the most transformative applications require quantum computers with far more qubits than are currently available and with the ability to correct data errors, learning and experimentation have huge benefits today. Nevertheless, he says, “Quantum will be a hugely disruptive technology, causing shifts in business models. The biggest risk for companies is failing to recognise when this shift is happening.”
Chapter 2
Use-case exploration
Research into commercial applications that quantum computing can enable is well under way.
As we said in 'Becoming ‘quantum ready,' quantum computers are not just faster versions of classical computers — they are fundamentally different. Not all calculations currently conducted by classical computers can be accelerated. But there are certain types of problems for which quantum computers are perfectly suited, many of which are of strategic importance to organisations in all sectors. This has promoted an increasing focus on real-world exploration and experimentation in recent years. In the UK, during this ‘pre-commercialisation’ phase, organisations are focussed on identifying those use cases most likely to generate value.
We presented respondents with five categories of applications and asked them to identify those with the greatest potential for their sectors. The most frequently cited categories overall involve the use of quantum computing to enhance artificial intelligence and machine learning (ranked first, for example, by financial services respondents), and in simulation and modelling tasks (involving, for example, better understanding of new materials or chemical reactions).
However, there is considerable variation across industries. For example, respondents from health and life sciences firms, and from power and utilities companies point first to optimisation-related tasks — possibly in response to pricing, power distribution or supply-chain challenges. A large majority (72%) of the TMT respondents — perhaps reflecting a heightened awareness within this sector of the possibility of cyber attacks — say cryptography-related tasks are their top priority for quantum computing use, although it is unclear the extent to which related quantum communications and security technologies may be contributing to these levels of awareness. Nearly two-thirds of the respondents (61%) in advanced manufacturing and other fields of industrial production — where the development and protection of intellectual property is vital — say the same.
Related content
Views from practitioners
According to Elena Strbac, Global Head of Data Science Innovation at Standard Chartered, quantum machine learning holds especially high potential in the financial services sector. “The use cases include the prediction of trading signals in financial markets, credit-decision outcomes and environmental impacts that are key for sustainable finance,” she says. Philip Intallura of HSBC sees quantum-powered portfolio-optimisation generating gains for many financial institutions in the next several years, “Just a 1% or 2% improvement in portfolios could be very significant from a commercial and customer-value perspective.”
In power generation and natural resources, quantum computing is being explored across all areas of the upstream and downstream value chain — from assisting drill-path discovery in extraction, to the efficient transportation and distribution of liquefied natural gas. “Optimisation is a current focus for BP,” says Morag Watson. For example, her team is writing quantum-ready algorithms supporting the acceleration of complex computing tasks, such as in logistical and maintenance activities. Chemistry is another focus, with potential application for the development of new lubricants and battery materials.
In the advanced manufacturing sector, quantum capabilities stand to have a major impact on the execution of R&D tasks that currently require significant computer processing power. Glenn Jones, Research Manager in the Johnson Matthey Technology Centre, has hopes for using quantum to discover new materials or to make substantial improvements to existing ones, such as catalysts and electrocatalysts. “Quantum computing is likely to help us simulate the behaviour of such materials with much greater precision than is currently possible,” he says. More widely in manufacturing, quantum computing and related technologies can help on the factory floor, through process optimisation and quality assurance, and even in the design of components (for example, by accurately simulating aerodynamics).
“Quantum simulation also holds great potential for drug discovery, once life sciences firms can accurately simulate proteins and their interactions,” says Piers Clinton-Tarestad, Partner, Technology Risk at EY. The great advantage offered by quantum computing is in significantly accelerating drug discovery. Piers pointed to a significant amount of research and investment, and strategic activity by commercial entities in this space.
Outside of computing, utilities, organisations such as Northumbrian Water, are exploring the use of quantum-sensing technology to address specific infrastructure challenges. Chris Jones, the company’s R&D Manager, says it is planning to use quantum gravimetric sensors to locate underground pipelines and other equipment, adding that construction, telecommunications and other types of utility companies could benefit from adopting the technology. “Any organisation with buried infrastructure should be interested in using quantum sensors to map subsurface assets,” he says. He also believes that quantum computing could eventually be used to support inversion modelling to generate patterns of gravimetric measurements — currently a difficult computational challenge.
To complement the survey, we also conducted secondary research to gather intelligence (from publicly available English-language sources) on the use cases that large companies are actively pursuing in several sectors around the world. Whilst a significant number of these announcements discuss the cybersecurity implications of quantum computing, most use cases that we discovered are focussed on value creation and acceleration through new or improved revenue streams, or on sustainability, via improved product design, materials discovery and more general operational efficiencies. In particular, the data suggests a wide range of exploration in the automotive and transportation, financial services, and advanced manufacturing sectors.
Moreover, the timeline of sample use-case activity suggests that experimentation is increasing exponentially as more organisations become familiar with the transformative potential of universal fault-tolerant, error-corrected quantum computers.
Chapter 3
Becoming quantum ready
More UK organisations need to start laying the groundwork for their future use of quantum computing.
In keeping with their overall optimism, most survey respondents say that their firm will be taking concrete steps within one and two years to prepare for the arrival of quantum computing in their organisation. Within this timeframe:
- 72% will have embarked on strategic planning relating to quantum computing
- 68% will have set up a pilot team to explore its potential for their businesses
- 71% will have appointed executives to lead quantum computing efforts
However, only between 25% and 33% of the respondents say that they have begun undertaking such measures already. Leading the way are companies from the TMT, advanced manufacturing, and consumer products and retail sectors. For example, 56% of the advanced manufacturing firms have begun strategic planning and 52% have established, or are in the process of establishing, a pilot team. Among consumer products and retail businesses, 50% have assigned, or are assigning, someone to lead their quantum computing initiatives.
Interestingly, the gap between industry sectors — in terms of their overall reported readiness — is relatively small, despite some sectors (including TMT and financial services) often being much further ahead in related technology areas, such as high-performance computing and artificial intelligence. For example, 65% of the financial services organisations report a high level of understanding of artificial intelligence, compared with a UK-wide average of 52%. This could simply be due to the nascent state of the quantum computing industry in general, or because organisations are gaining greater clarity around potential use cases, driven in part by news of what their competitors may be doing.
Most respondents have also begun or will soon begin efforts to understand the wider quantum ecosystem — the broader network of quantum computing researchers, start-ups and technology firms. Within two years, nearly two-thirds (65%) of the organisations say that they will be actively monitoring the progress of vendors of quantum computing technology. Even more (71%) expect to have begun setting up partnerships with relevant suppliers or specialists by then.
This ecosystem is growing fast. “We've seen rapid development over the last two years and the pace of growth is accelerating,” says BP’s Morag Watson. From universities and a few big technology firms, the ecosystem has expanded to include a plethora of start-ups and acquisitions are increasing. “If such expansion continues, we could see the initial signs of an economically viable supply chain for quantum computing,” says Morag Watson.
The importance of skills and awareness in readiness
Organisations must also build the necessary skills and knowledge in the business to harness quantum. Asked what other measures their firms should be taking to become quantum ready, respondents assign highest priority to several aspects of skills and knowledge development.
We believe that skills and awareness in quantum technologies are enablers for other important areas of readiness, such as maintaining awareness of technical developments in quantum computing and building partnerships with participants in the wider ecosystem. It will be increasingly important for organisations to have sufficient internal expertise to monitor for signals of disruption, see through the hype and avoid large imbalances in knowledge when seeking to engage with the ecosystem in more significant exploratory activities.
All practitioners we interviewed are engaged in quantum awareness-building in their organisations. Morag Watson says, “Our team's role is to educate the company and get the right people involved in order to be quantum ready, such that, when the full universal quantum computer is available, BP can fully leverage the technology.”
At HSBC, Philip Intallura and his research team are building quantum knowledge among managers and employees. “We're investing significantly in training programmes in quantum to upskill not just the engineering team, but the whole organisation,” he says. “Everyone should have a basic awareness of what quantum computing is, at the very least to be able to identify potential use cases.”
The skills and knowledge that businesses will require to exploit quantum technology extend well beyond the technical. “As we get further into it, we'll need to bring much more of a business-analyst approach to understand how quantum will fit within our existing operating and asset-management practices,” says Chris Jones of Northumbrian Water. “That’s got to go hand in hand with ongoing technology development.”
Most survey respondents agree. The biggest skills challenge with quantum computing, say 55%, will not be in finding people who can make the technology work, but in finding business leaders who know how to take advantage of it.
Chapter 4
What should business and technology leaders do next?
There are specific actions organisations can take today to begin their quantum computing journey.
Quantum computing technology is maturing fast and as this study shows, UK organisations need to get ready.
Companies and public sector bodies yet to embark on preparations should consider taking the following five steps:
- Monitor for signals of disruption: R&D teams, long-range planners and risk managers should scan the technical, and trade ‘press and read’ analyst reports and competitor announcements about developments in quantum computing, and related technologies. You should not be taken by surprise by sudden progress in the development of quantum computers or your rivals’ efforts to exploit them.
- Evaluate your organisation's readiness: You should create a pilot team — preferably reporting to the business leadership — to gauge where quantum computing could enhance future products, services and business operations; the maturity of current ecosystem relationships; and availability of relevant skills. This should also include the evaluation of the exposure of current data and processes to risks (such as security) posed by the technology, and developing a road map for mitigating their impact.
- Research and explore use cases: Having identified areas that could benefit from quantum computing, you should study use cases in the business and consider external collaboration, tapping into networks of other like-minded organisations.
- Scope out the ecosystem: The number and scale of technology suppliers and other potential quantum partners is growing, and evolving. You should determine not only which partners are best positioned to help with sample problems, but also which are likely to have the staying power needed to address future strategic initiatives.
- Educate, educate, educate: Like artificial intelligence and machine learning before it, quantum computing can seem inaccessible to non-specialists. But, alongside other managers and employees in your organisation, you need to become familiar with quantum computing’s capabilities — in theory and practice. Your specialists should be designing training programmes accordingly. As with previous emerging technologies, the best education is often experimentation — there is a dramatic difference between reading the theory and seeing it in practice.
Finally, Piers Clinton-Tarestad of EY recommends that companies see these steps as iterative and inter-related: “This report reveals a disconnect between the pace at which industry leaders expect quantum to start significantly transforming businesses and their general preparedness for its impact. Maximising the potential of quantum technologies will require early planning to build responsive and adaptable organisational capabilities. Quantum readiness is not so much a gap to be assessed as a road to be walked, with next steps being regularly revisited as the landscape evolves. Businesses that expect industry disruption within the next three to five years, therefore, need to act now.”
Summary
Quantum computing is rapidly advancing towards commercial viability. Some UK organisations are taking steps to prepare for this, including through the exploration of use cases and internal awareness-building efforts. It is difficult to predict the rate of quantum’s maturation, but first-mover advantage awaits those ready to tap the enormous computing power it will deliver.
