Quantum computing is set to transform multiple Industries while creating up to $850 billion in annual value by 2040, according to a new study by Boston Consulting Group (BCG).
The belief that quantum computers will solve key issues that are beyond the grasp of regular computers – a milestone known as quantum advantage – has increased rapidly in the last twelve months, according to this new report published by Boston Consulting Group (BCG), titled, What Happens When ‘If’ Turns to ‘When’ in Quantum Computing?
Investors are stepping up their investments in quantum computing, with two-thirds of all equity investments in the sector occurring since 2018, stated BCG Research.
Through 2017, the investments reached $600 million and over the next three years, that sum nearly quadrupled, added BCG. At the same time, corporations are dramatically increasing their QC investment, with a recent Gartner forecast predicting that 20% of companies will devote resources to quantum technology by 2023, up from 1% in 2018.
Jean-Francois Bobier, a BCG partner and director, and a co-author of the report, predicts the acceleration will continue. “Recent advances and roadmaps from major hardware companies such IBM, Google, Honeywell, IonQ, PsiQuantum and others have increased the confidence that we will have machines powerful enough to tackle important business and society problems before the end of this decade,” said Jean-Francois Bobier. “Impacted companies and governments should get prepared for an accelerated timeline.”
Engineering the Quantum Bits
Major advancements in quantum computing technology are driving this increase in investment, as are expectations of significant performance and profit increases as a result of this new capacity. Quantum computing, according to BCG research, would unleash new value across numerous industries, generating up to $850 billion in annual value by 2040 (see exhibit).
Much of the new investment is being directed toward the challenge of developing lower cost and more reliable quantum computing hardware, according to BCG. Researching and engineering the quantum bits (qubits) that power the computers is extremely difficult and expensive.
$800M Investments in 2021
Quantum computing received $675 million in equity investments in 2020, with $528 million of it going to hardware development. The previous year, a total of $211 million in venture funding was split equally between hardware and software. With almost $800 million in investments, BCG expects 2021 to surpass past records.
BCG predicts a race between five competing quantum hardware technologies over this decade. As of today, they would all bear unique performance and scalability tradeoffs, and the jury is out on which ones will achieve a decisive advantage. Large, established companies such as IBM, Google, Honeywell and Amazon Web Services (AWS) are heavily investing beside well-funded startups such as IonQ, which went public this year at an estimated initial valuation of $2 billion.
Another of the report’s authors, Matt Langione, a BCG principal, projected a major increase in institutional and corporate investment in quantum technologies.
“The critical change since we last surveyed the market two years ago is the rise of corporate interest and investment. That was the last domino to fall after governments and equity investors began investing heavily,” said Matt Langione. “Building quantum computers will require not only hardware and software innovations, but also use-case innovation: businesses will need to identify and scope high-value problems for quantum computers to tackle. That is happening now, and it’s happening with vision and imagination across many industries – not just pharma and financial services, but energy and retail. Businesses of all kinds are realizing that this isn’t the kind of industry that you’ll simply be able to buy your way into once it matures.”