Understanding the Quantum Opportunity
Predictions about quantum technology are often fraught with hype and exaggeration, with one commentator even claiming that the quantum revolution will be more significant than the discovery of fire. Nonetheless, emerging quantum technologies will bring to market significant new capabilities as well as economic and strategic opportunities—and these will require supportive policy attention. To that end, here is a beginner’s guide to some key terms related to quantum tech, and some questions that the emerging quantum opportunity raises for policy makers.
“Quantum” at a Glance
The field of quantum physics studies the universe at the atomic scale—the world of individual atoms, electrons, and photons where the laws of classical physics begin to break down. In this strange environment, particles behave unpredictably and in ways that are still not entirely understood.
Few quantum phenomena have fascinated the world of physics like entanglement, in which the measurement* of one particle can have an equal effect on an “entangled” particle across space. Particles at this scale also exhibit what is known as superposition, in which they exist in several different states at once until measured.
Though there is still much to be studied and understood about the realm of quantum physics, scientists and engineers are hard at work around the world trying to exploit these bizarre properties. Quantum information science and engineering (QISE) is a catch-all term for harnessing quantum phenomena like entanglement and superposition for scientific, commercial, or military applications. Even without an understanding of the underlying physics, the potential implications are obvious:
Quantum Communications: Entanglement allows for the instantaneous, non-intercept-able transfer of information across space. Quantum-enabled communication devices could theoretically relay data back-and-forth securely and without latency.
Quantum Computing: Given that a quantum particle exists in several states at once, a quantum-enabled computer can run several simultaneous computations using the same packet of information (known as a “qubit”). This has significant consequences for cybersecurity, since a sufficiently powerful quantum computer could quickly decrypt algorithms meant to stifle classical computers. Quantum computers also promise to revolutionize machine-learning and artificial intelligence.
Quantum Simulation: Quantum computers, given their ability to digest large quantities of data, will be able to significantly outperform present-day computer simulations. Quantum modeling of molecules, proteins, and their interactions may facilitate the rapid discovery of new, life-saving drugs, more efficient fuels, or more powerful batteries.
Quantum Sensing: Quantum-entangled particles arrayed in a network of sensors will be able to detect patterns and disruptions with far greater sensitivity and accuracy, enabling advances in everything from earthquake detection and weather forecasting to military reconnaissance.
According to most experts, the first quantum computer capable of solving a commercial problem that a classical computer cannot feasibly solve is potentially decades away. Unsurprisingly, exploiting the properties of the subatomic world is highly technical and requires exotic materials, processes, software, and supporting technologies.
*At the atomic scale, there is no way to measure or “look at” a particle without altering its energy-level or state in some way.
The Industry Is at an Inflection Point
The industry today is at an inflection point, moving from advances in research and development and towards practical and tangible products and services for the market, a trend particularly visible in business attitudes and investment:
Shift from Research to Development: Firms active within the industry are shifting away from investment in basic research and towards the development of software, equipment, and materials that will operate, maintain, and support quantum devices. Firms that specialize in these supporting technologies are seeing growth as a result. The industry has signaled it is moving past proving feasibility of quantum applications.
Getting Quantum Ready: Many firms in industries who stand to benefit from quantum technology are taking steps to become “quantum ready,” expanding relevant personnel and organizational capacity.
Growing Venture Investment: Meanwhile, the venture capital space continues to invest more in quantum. According to data from McKinsey, the total funding for quantum start-ups doubled from $700 million in 2020 to $1.4 billion in 2021.
The “Chicken and Egg” Problem
With the technology maturing rapidly, a key concern is whether the ecosystem to support the development and scale up of a competitive U.S. based quantum exits. Competitive and in-demand products are necessary to grow the supportive ecosystem of suppliers, service providers, and encourage the growth of a skilled workforce. But without the benefit of this ecosystem in the first place, it is difficult for new applications to be funded, developed, and commercialized.
Scaling the Quantum Industry
While the United States is widely considered a leader in QISE, there is no guarantee that it will reap the economic and security advantages that come with this research leadership. Emerging industries in the past have fallen into the “invent here, produce there” trap, in which U.S. innovators develop a technology, but outsource its manufacture abroad.
Other nations have in place significant scale-up infrastructure to turn new research ideas into competitive products for the market. Germany’s Fraunhofer Institutes, Japan’s Keiretsu’s, Korea’s chaebols, and China’s state-owned enterprises exemplify different models for pulling together significant capital, technical expertise, and marketing know-how to navigate this inflection from research to market. The United States lacks equivalent institutional structures and needs to assemble a constellation of public-private partnerships—networking research, capital, workforce, and manufacturing capabilities—to help emerging quantum technologies make the transition to market. Supporting public policies and new partnerships are required to overcome a series of challenges. These include:
The Quantum Talent Shortage: The United States at present lacks sufficient domestic talent to fill positions at all levels of the quantum workforce, from Ph.D. physicists to graduate engineers and trained technicians. U.S. universities and firms also lack dedicated talent pipelines for providing students with industry-relevant skills and connecting them with opportunities. Like many high-technology sectors, the U.S. also has a high reliance on foreign nationals in its quantum industry and academic sphere, necessitating immigration reform to keep these individuals in the United States.
An Immature Quantum Ecosystem: As noted earlier, many U.S. quantum start-ups are producing technologies for which a robust market and established customers do not exist yet. This makes obtaining sustained venture capital funding extremely difficult since investors typically seek short- or medium-term returns on their investments. It also makes it challenging to manufacture quantum devices at-scale since materials and other supporting supply chains are still developing or non-existent.
Limited Government Procurement: The U.S. government, which has been an important customer and collaborator for other emerging technologies like semiconductors in the past, is an unattractive partner for many quantum firms today. Not only is the market relatively small, but the process of contracting with the U.S. government has become prohibitively expensive and slow. Meanwhile, the government’s quantum R&D priorities are focused on long-term threats like quantum cyber warfare, while glossing over commercial quantum applications with shorter time-horizons such as sensors and biotech.
A Quantum Value-Chain in a Rewiring World
The U.S. must also consider—along with its allies—what the global quantum value-chain should look like decades from now considering current geopolitical and economic trends.
The semiconductor industry, once an exemplar of the efficiencies gained from globalized production, is now rewiring its supply chains at great cost to become more resilient to pandemics, natural disasters, and geopolitical shifts. Such resiliency needs to be intentionally designed into the global networks supporting a maturing quantum industry.
The quantum revolution presents a major opportunity for the U.S. to take advantage of an emerging technology that portends significant commercial and national security advantages to the technology leader. The United States must work today to empower its domestic quantum industry and grow resilient global cooperative networks with its allies to be ready for the quantum breakthroughs of the future.
Gregory Arcuri is a Program Coordinator and Research Assistant with the Renewing American Innovation Project at the Center for Strategic and International Studies in Washington, DC.