ESG factors are criteria that help investors evaluate companies according to their take on environmental issues, people, and communities as well as their internal system of practices and procedures. Since the current report addresses the entire quantum computing industry, the general characteristics of this industry will be referenced, rather than those of each individual company. However, as a nascent industry, it is important to evaluate its future impact on the world and society in general.
Environmental
Environmental
Taking into consideration all the devices in the information and communications technologies (ICT) sector and the energy required for charging, wireless connections, and data usage, the “digital economy” already has a large energy footprint.100 Data centers and cryptocurrency mining are considered to be among its most energy-intensive elements. The overall energy footprint of the ITC ecosystem is expected to increase in the next ten years,101 and its carbon emissions, which have already been proven to be on par with those of the aviation industry,102 are still increasing.
In this scenario, the rise of quantum computers brings both concerns as well as good news. On one hand, operating a quantum processor itself doesn’t require much energy, and scaling up the number of qubits doesn’t significantly increase the energy requirements. On the other hand, because most quantum computers have to operate at very low temperatures (sometimes close to absolute zero), refrigerators and cooling systems become the main sources of energy consumption.
Salvatore Mandrà, together with scientists from NASA’s Ames Research Center in California, Google, and Oak Ridge National Laboratory, designed qFlex, a quantum simulator used to compare NISQ devices to conventional supercomputers in terms of the energy required to solve the “random circuits problem” (a problem used by Google to claim quantum supremacy). The research showed that the energy requirements on a supercomputer were between 21 and 97 MWh, while the NISQ device used only 0.42 kWh (4.2×10−4 MWh).104
Since quantum devices haven’t been scaled up yet, and given the difference between the technologies used to build qubits, the power consumption of these devices cannot be estimated. It is highly likely that energy consumption will strongly depend on the device’s architecture, the technology employed to build qubits, the number of qubits, and their entanglement as well as on the number of times the algorithms have to be run on the system in order to provide the results.
However, avid supporters of quantum technology consider the energy costs implied by running quantum devices to be insignificant compared to the benefits these computers could bring in terms of applications and problem-solving.
Through practical applications in chemistry and development of materials, as well as through optimization solutions, quantum computers might lead to significant breakthroughs in terms of power generation, transportation and storage, new and more efficient material design, and optimized transportation routes, which in turn have the potential to reduce global CO2 emissions.105
Social (human factor)
Social (human factor)
The social impact of the quantum ecosystem can be analyzed from two perspectives: the people who will be employed and those who will be indirectly impacted.
Currently, the quantum field builds on the experience and formal education provided in areas such as physics, engineering, and computer science.
Only recently have formal education programs been developed specifically for the topic of quantum computing. While there are a number of academic backgrounds and experiences that are very helpful for advancing this field, it is also very important to find common ground and a shared understanding. The situation began to change when renowned universities and research centers started to offer postgraduate, PhD, and post-doc programs in the field of quantum technology.
However, because this field requires highly specialized people with a relatively unique mix of interests and skills, it is currently struggling with a shortage of human resources. This problem is even more relevant since the technology is moving from the lab to the industry, and highly specialized people are needed not only in universities and research labs, but also in the business sector.
Besides developing public programs to educate students and produce a new generation of quantum scientists, another strategy employed by governments and companies alike has been to encourage specialists in different fields to re-skill and enter the quantum field. This has been done through various governmental programs (e.g., the MIT xPRO program, which is supported by the US government) or through training programs and consultancy projects that experts in the quantum field can offer to companies from different industries.
This approach helps to extend the pool of quantum specialists. At the same time, it includes the industry perspective and know-how, which might help with developing more targeted quantum applications and identifying specific real-world problems to be solved. Since it is difficult for mathematicians and theoretical physicists to envision the issues other industries face, a mix between academic knowledge and business acumen is paramount.
One positive and important aspect of the emerging quantum field is its diversity and openness toward including women, both at an academic level and as business managers and quantum specialists. Women in Quantum, a program developed by One Quantum in collaboration with Honeywell and IBM, aims to promote female scientists and their accomplishments in this domain. Investment platforms also mention this particular category (women-run quantum companies).
In terms of social impact, it is envisioned that quantum computers will have a huge positive influence on society, mostly through their practical applications – development of new drugs and precision medicine, optimization of evacuation plans in case of natural disasters, new material development (e.g., to be used for implants), etc.
Governance – regulations, ethics
Governance – regulations, ethics
Given that this field is still in its infancy and quantum devices haven’t reached their potential yet, the area remains unregulated. Governments and policymakers are currently exploring the potential of universal quantum computers, as well as the dangers they might bring. For example, in 2020, the Republican Party in the US proposed the “Advancing Quantum Computing Act”,106 which would help the government map out “America’s quantum reality”, the quantum strategies of other nations, and the potential impact on the domestic US market and supply chain. Based on the findings, the bill calls for US Congress to receive a series of recommendations regarding policies and rules to promote quantum adoption while simultaneously limiting and preventing possible hazards and misusages.
The advent of quantum computers will have many legislative implications. Regulations regarding data privacy will have to be extended, and clear rules will need to be defined to establish responsibility when it comes to the consequences of quantum computations (especially in the medical field).
At an organizational level, companies in this sector do not yet have a set of rules or best practices that could guide their activity and prevent them for misusing this technology. If this technology should fall into the wrong hands, the problems it could bring might surpass its envisioned advantages. Governments are starting to investigate its potential implications, and once the first breakthroughs become reality, they might put in place the first guidelines for a responsible and dependable application and codes of conduct.
How to work with a quantum computer?
At this point, the quantum community envisions that a handful of companies will build and scale up quantum devices. These will then be accessible via a cloud for the vast majority of corporate clients.
Given the steep learning curve, the physical conditions required for the device to function, and the highly specific know-how needed to build, develop, and maintain such a device, it is highly improbable (at least with the current knowledge and understanding) that small companies or even individual users would buy or build their own quantum computers.
Therefore, the key aspect in working with quantum computing is to build partnerships that benefit from the specific know-how of each partner.
Denise Ruffner, former Chief Business Officer at Cambridge Quantum Computing (CQC), offers these recommendations:107
- Educate yourself and learn about the technology.
- Speak to several service providers and assess their methodology, communication methods, and potential. Look for scientific depth along with quantum computing depth. You don’t only need somebody who can code on a quantum computer, but somebody who also understands the science behind your industry.
- Discuss the industry-specific problems and challenges the company is facing with your partners.
- Choose a problem that is suitable to the level of development of current quantum devices (approach the problem from a scientific point of view). Specialists will translate that problem into a mathematical model, which will then be translated into a quantum algorithm.
- Set milestones to monitor the progress.
- Work alongside partners (don’t externalize the entire process) so you can benefit from multiple perspectives and learn from each other’s approaches.
The importance of being an early adopter
The importance of being an early adopter
Quantum computing is an innovative field, and its adoption comes with numerous challenges. The need to understand basic quantum computing principles, the steep learning curve and scarce expertise and the lack of certainty regarding future developments are only some of the drawbacks when it comes to its adoption.
Roger’s model classifies innovation adopters according to their willingness to accept the new technology. While only a very small minority lead the way and actually develop and implement the innovation, the rest prefer to wait, evaluate the results obtained by other companies, and act only when they are convinced of the advantages, or are forced by competition or changes in the environment.
While a delayed response might prove to be a wise strategic decision in some situations, in the case of quantum computing, the situation might be different. The main reason why early adoption is advisable is the steep learning curve.
On one hand, it takes significant time to build what IBM calls an in-house “quantum center of competency”, which involves choosing the right partners and technologies, developing or buying expertise, getting access to the necessary infrastructure, and adjusting work processes.
On the other hand, the quantum industry is already talking about an imminent breakthrough that has the potential to revolutionize several industries.
Therefore, the organizations that already have a foot in the field and are familiar with the technology can take advantage of the applications much faster than others and thus, claim industry leadership.
The technological advancements in the quantum field are not linear or incremental but abrupt, radical, and unexpected, and might take many business players by surprise if they are not already up to speed. Besides high financial and human resource costs, a company playing catch-up after a breakthrough has already taken place will not only incur high financial and human resource costs, but also suffer major losses in comparison with the companies that can immediately take advantage of the breakthroughs. IBM has even talked about a “winner-takes-it-all” scenario for certain industries, where companies without fast reaction speed and relevant intellectual property will quickly lose their competitive advantages.
Another reason why entrepreneurs should start early to build up knowledge and design quantum-ready strategies is that in some industries, the product’s lifetime is between 15-30 years (e.g., aeronautics, space, energy infrastructure, etc.). Future advancements in quantum computing will significantly impact the products in one or more phases of their development cycle or company data security. Companies should therefore be prepared to integrate possible applications or devices into the products or infrastructure.
References
[100] Bryan Walsh, “The Surprisingly Large Energy Footprint of the Digital Economy,” August 14, 2013, https://science.time.com/2013/08/14/power-drain-the-digital-cloud-is-using-more-energy-than-you-think/.
[101] Anders S. G. Andrae and Tomas Edler, “On Global Electricity Usage of Communication Technology: Trends to 2030,” Challenges 6, no. 1 (June 2015): 117–57, https://doi.org/10.3390/challe6010117.
[102] Nicola Jones, “How to Stop Data Centres from Gobbling up the World’s Electricity,” Nature 561, no. 7722 (September 12, 2018): 163–66, https://doi.org/10.1038/d41586-018-06610-y.
[103] Jeremy Hsu, “How Much Power Will Quantum Computing Need?,” IEEE Spectrum: Technology, Engineering, and Science News, sec. Tech Talk | Computing | Hardware, accessed October 25, 2020, https://spectrum.ieee.org/tech-talk/computing/hardware/how-much-power-will-quantum-computing-need.
[104] “Quantum Computers Vastly Outperform Supercomputers When It Comes to Energy Efficiency,” Physics World, May 1, 2020, https://physicsworld.com/a/quantum-computers-vastly-outperform-supercomputers-when-it-comes-to-energy-efficiency/.
[105] Jean-François Bobier, Jens Burchardt, and Antoine Gourévitch, “A Quantum Advantage in Fighting Climate Change,” Boston Consulting Group, 22 January 2020, https://www.bcg.com/en-ch/publications/2020/quantum-advantage-fighting-climate-change.
[106] H. Morgan Griffith, “Advancing Quantum Computing Act,” Pub. L. No. H.R.6919 (2020), https://morgangriffith.house.gov/uploadedfiles/advancing_quantum_computing_act.pdf.
[107] Honeywell, Transforming Life Sciences with Quantum Computing.