Guest Comment: The Chances of the Quantum Revolution

Let us imagine that Nicholas wanted to find the shortest route of a round trip on which he would like to please children with gifts. Could a computer help him with that? Computer scientists refer to this question as the “traveling salesman problem”, which belongs to the class of “NP-complete” problems. That means: Even the most powerful computers and the best software quickly reach their limits when looking for a solution – in terms of computing time.

The complexity of the problem results from the fact that the number of conceivable travel routes grows explosively the more intermediate destinations St. Nicholas wants to go to. While twelve different routes are possible with five stations, there are already 181,440 with ten stations. With eleven stops there are 1.8 million and with twelve stations there are already 20 million different routes.

Up to this point a modern computer could just calculate the shortest route. But even at 20 stops, the program would have to run for hundreds of years to come to a solution. A new key technology could help: the quantum computer.

Quantum computers make use of certain quantum mechanical effects, which gives them an enormous speed advantage over classic computers for special tasks. Last year, for example, Japanese researchers managed to use a special quantum chip to solve a traveling salesman problem with 22 stations that would have taken a high-performance computer more than a thousand years to complete.

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The search for the shortest routes has countless practical applications – from route planning for parcel services and aircraft fleets, the optimization of supply chains and traffic flows to the design of microchips, the transmission of data packets in telecommunications networks and genome sequencing.

Private venture capital plays a big role

Quantum computers can show their superiority not only in special optimization problems such as the problem of the traveling salesman or portfolio decisions in the financial sector, but also in complex simulations (for example of molecules for biochemical applications) and in the field of artificial intelligence (for example for pattern recognition Basis of neural networks).

In all major economic areas – USA, China, Europe – the strategic importance of the new quantum technologies has been recognized, which in addition to quantum computers also includes quantum communication and quantum sensors. As cross-sectional technologies, they influence so many branches of the economy that no industrialized country can afford to lag behind in terms of technology.

McKinsey recently examined the global competitive situation. According to this, both the USA (around 2.1 billion US dollars), Great Britain (981 million) and Canada (658 million) have invested significantly more in quantum technologies than the EU (294 million) over the past ten years. Private venture capital investments in particular played a role here: they accounted for more than half of total investments. Global investments have skyrocketed since 2019.

In terms of state funds that are to be made available for quantum technologies in the future, the EU is in second place with an announced 7.2 billion dollars (of which around three billion from Germany) – behind China (15 billion) and ahead of the USA (1.3 billion dollars) Billion). When it comes to patents, Chinese and Japanese inventors are the best. In terms of scientific publications, on the other hand, the EU ranks first – just ahead of China. However, American publications are most frequently cited. India, the EU and China have the largest talent pools in terms of university graduates in relevant disciplines.

Accelerated drug development

As far as the user industries are concerned, experts see the greatest potential for disruption for quantum computers in the chemical and pharmaceutical industries. There, simulations of molecular processes could, for example, drastically accelerate drug development. Otherwise, the telecommunications industry in particular is pushing its first applications, followed by the finance, automotive, and aviation and defense industries, among others.

On the other hand, insurance companies, transport, logistics and energy companies are often still in pre-competitive tests. So far, hardly any activities are known in the health care and public sectors. From a German perspective, what does it take to be one of the winners of the quantum revolution in the long term? I see three main areas.

First: The user industries should already now systematically integrate quantum computing into their business. Quantum algorithms can already be used profitably in practice. Technically, many applications are still based on transitional solutions that combine quantum and conventional computing systems.

The barriers to entry are comparatively low: the services can be obtained via the cloud and do not require users to invest in hardware themselves. It is important to get started on the topic early – in order to gain competitive advantages, but also to warm up in the quantum world before there is a breakthrough in powerful quantum computing hardware.

Bundling of forces is necessary

Second: The Federal Government should coordinate its funding initiatives more closely in order to make more targeted use of synergies, for example between the programs of the Ministry of Research and the Ministry of Economic Affairs. This bundling of forces should take place in close collaboration with the “Qutac” industrial consortium, which aims to bring industrial quantum computing applications to market maturity.

As an exception, the government should also reconsider the very broad approach to technology funding. From today’s perspective, it is not yet certain which technical platform will prevail for quantum computers. Funding according to the watering can principle, however, carries the risk that it will not reach the critical mass for decisive breakthroughs with any technology. In addition, we need a training offensive that, in addition to the theoretical basics, also primarily addresses application-relevant skills.

Third: Deeptech start-ups play a crucial role in the quantum ecosystem – even if the media attention has so far mainly focused on American IT corporations. Venture capital investments in this area require a lot of patience and deep pockets. The state can support the commitment of private investors, but should not limit itself to the role of sponsor. It would be at least as important that he himself be one of the first customers of the new key technologies and thus give the quantum revolution the decisive boost.

We now have the unique opportunity in Germany and Europe to convert our strong position in research into economic strength and a sustainable competitive advantage. We shouldn’t miss it.

The author: Ann-Kristin Achleitner is Distinguished Affiliated Professor at the Technical University of Munich, where she held the Entrepreneurial Finance Chair from 2001 to 2020. In business, she is a member of the supervisory boards of Linde and Munich Re. She is also involved as an investor in young growth companies.

More: Amazon develops its own quantum computer.

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