Part III: The sectors of business-case quantum
The pharmaceutical, chemicals, automotive and finance sectors are set to gain the most in the short-term from the business cases of quantum computing. Here are some things to know:
As the possible applications of quantum technology push total stakeholder value into the billions, one of the first sectors to benefit directly are said to be Cloud-based services. Whilst mobile or personal quantum computing isn’t expected to fully mature as technologies this decade, the Cloud may just be the main way for all early users to use quantum technology (in fact, many of the providers of Cloud computing now even provide experimental quantum computer access as well), until the larger ecosystem matures.
Outside of the Cloud, however, with conservative estimates putting the value at stake to be as high as $700 billion, the major industries that are set to drive growth include chemicals, automotive, finance and above all, pharmaceuticals. The four major archetypes of quantum computing use-cases include quantum optimisation, quantum factorisation, quantum simulation and quantum linear algebra for machine learning and AI.
Pharmaceuticals
Quantum computing has the potential to completely revolutionise the R&D of molecular structures in the biopharmaceuticals industry, apart from also providing value in production as well as further down the value chain. McKinsey opines: “…in R&D, for example, new drugs take an average of $2 billion and more than ten years to reach the market after discovery. Quantum computing could make R&D dramatically faster and more targeted and precise by making target identification, drug design, and toxicity testing less dependent on trial and error and therefore more efficient. A faster R&D timeline could get products to the right patients more quickly and more efficiently—in short, it would improve more patients’ quality of life.”
All three aspects of the supply-side – production, logistics and the supply chain – are set to benefit from quantum computing standards. Calculations from experts state that while it may be difficult to estimate the exact revenue or patient impact from such advances, “…in a $1.5 trillion industry with average margins in earnings before interest and taxes (EBIT) of 16 percent (by our calculations), even a 1 to 5 percent revenue increase would result in $15 billion to $75 billion of additional revenues and $2 billion to $12 billion in EBIT.”
Chemicals
Quantum computing is all set to improve production, supply-chain optimisation and R&D in the chemicals sector. Consider, for example, that quantum computing contributes positively to improve the design of catalysts. “New and improved catalysts, for example,” writes McKinsey, “could enable energy savings on existing production processes—a single catalyst can produce up to 15 percent in efficiency gains—and innovative catalysts may enable the replacement of petrochemicals by more sustainable feedstock or the breakdown of carbon for carbon dioxide usage.”
With regard to its contribution to the annual $800 billion production costs of the chemicals industry (half of which relies on various catalysis standards), this could result in up to a 10% efficiency gain – to the tune of up to $40 billion in value.
Automotive
The automotive industry too can gain directly from quantum computing to R&D, production design, mobility and traffic management and supply. The technology could be applied, for example, to decrease costs of manufacturing and shorten cycle times by optimising aspects such as multi-robot processes like welding, gluing or painting.
In the context of an industry that has an annual $500 billion in production costs, value of up to $24 billion could be created a year.
Finance
Although quantum computing use-cases in finance are a bit more forward looking, the short-term benefits, especially in portfolio and risk management, seem a rather lucrative option. Efficiently quantum-optimised loan portfolios which focus on collateral could allow lenders to improve their offerings – maybe even reduce interest rates and free up more capital. McKinsey reports that while “it is early—and complicated—to estimate the value potential of quantum computing–enhanced collateral management, but as of 2021, the global lending market stands at $6.9 trillion, which suggests significant potential impact from quantum optimization.”
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