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Quantum computing age - Multi-sector disruption

Quantum computing could be as transformational for the global economy as the internet, TV or telephone. The power to solve hugely complex problems could disrupt every industry, creating new opportunities – and risks. But perfecting the tech still presents major hurdles.

The most common question we get asked is – what is a quantum computer? At its simplest, it is a new class of machine with the potential for vastly more power and speed than the so-called “classical” computers we use today.

The second question is – how does it work? Classical computers (such as the one you are using to read this) are built on binary digits that store information as a series of zeroes and ones – otherwise also called a bit. Quantum computers, by contrast, are built of quantum bits, or “qubits”. These can be simultaneously zero and one, enabling them to carry out more calculations. Stringing qubits together creates a machine than can run through possibilities much more quickly than existing computers, and solve problems far more effectively. This is, of course, a simplification of a very complex topic: for more on the theory that underpins the tech, check out the brief guide in our summary*.

The quantum age is already beginning. Although the technology is its infancy, a number of teams have built systems that demonstrate just what it could achieve. And companies are already using it to solve complex problems. These range from manufacturers optimising the route of robots across a factory floor, to grocery stores restocking more efficiently.

Investor and government interest is rising fast. Venture capital investment in quantum computing exceeded USD1 billion for the first time in 2021. A number of existing tech companies are pioneering quantum technologies and applications. Governments have also been pouring billions into research and development in recent years, as policymakers start to appreciate the disruptive potential of quantum computers. China, the US and EU have already made commitments to spend more than USD24 billion.

Venture capital investment in quantum computing in 2021
Commitments to quantum initiaives announced by China, the US and the EU

The next generation of quantum computers could offer solutions to a whole new set of problems. They have the potential to do things even existing supercomputers cannot in two particular areas:

  • Optimisation – quantum computers can analyse problems with many variables and recommend the best solution among a huge range of options; this includes finding better ways to manage networks such as traffic flows through a city, delivery routes, and energy flows across a national or regional grid.
  • Simulation – quantum computers could have the capacity to simulate complex molecules at an atomic level, opening up the potential to facilitate new drug discoveries, battery technologies, chemicals, and even new materials.

We think quantum tech could affect almost every sector of the global economy. It could reshape the way future cities and transport are designed, suggest new ways of cutting carbon dioxide from manufacturing processes, and give banks a new tool for protecting customers from fraud. Please see our infographic (below) for more detail on possible applications. As such, quantum computing could have repercussions for most of the nine key long-term trends* that we focus on in HSBC Global Research.

But there are still huge engineering challenges ahead if quantum is to achieve its full potential. The most advanced machines today have around 100 qubits. To become more powerful, flexible and reliable, the next generation of machines will need at least 100,000 qubits. For now, this is exceptionally difficult to achieve – not least as some existing systems require specialised conditions, such as consistently very low temperatures, and malfunction if they get slightly too hot.

It is not yet clear which type of quantum computer will become the most prevalent. There are three main types being explored today – superconducting, trapped-ion and photonic. Superconducting systems require incredibly low temperatures, but can perform operations especially quickly. Trapped-ion qubits are more stable, but a little slower. Early results suggest that scaling up photonic systems – which use particles of light to carry information – could be a particular challenge. The next few years will further test the potential strengths, limitations and scalability of each design.

Quantum brings new risks as well as opportunities. For example, quantum systems have the potential to crack most forms of encryption used today to protect websites, personal data and financial information. This could present a threat to future cybersecurity and digital infrastructure – indeed, some hackers are collecting data that they can’t decrypt now and are waiting for the day quantum computers become available to do so. We think it is important for businesses and regulators to take these challenges seriously. Now’s the time to prepare for the quantum age.

First published 5th October 2022.

Would you like to find out more? Click here* to read the full report (you must be a subscriber to HSBC Global Research).

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