From basic research to market: Why the recent Nobel Prize in physics matters

By Mena Issler, Niko Mohr, and Henning Soller

The announcement of this year’s Nobel Prize in physics “for experiments with entangled photons, establishing the violation of Bell inequalities, and pioneering quantum information science” was life altering for a couple of reasons. Of course, the recipients—Alain Aspect, John Clauser, and Anton Zeilinger—will now be part of history in recognition of their groundbreaking 1970’s and 1980’s research on quantum entanglement. Their findings also have far-reaching implications for the industrialization and refinement of quantum computers and quantum communication.

The experiments and their results

The research of all three winners focused on entanglement—a phenomenon that is foundational to quantum mechanics but has been the subject of intense debate for the past 90 years. In short, entanglement means that, at the quantum scale, particles may not have well-defined individual characteristics, only common ones. They become entangled and, no matter how far apart they are physically, remain linked. Anything done to one particle also affects the other particle with which it is entangled.

This phenomenon cannot be explained classically and leads to the violation of certain equations, known as Bell’s inequalities, that make it possible to determine whether this “spooky action at a distance” is real. The experiments conducted by Alain Aspect and John Clauser demonstrated conclusively that entanglement does indeed exist, supporting quantum mechanics.

Entangled quantum states can be used to prove not only the theory of quantum mechanics but also that of quantum communication. Anton Zeilinger’s experiments showed that entangled particles can be used to securely transport information over massive distances.

How these principles are being applied today

While the experiments might seem esoteric, they have widespread applications: Aspect and Clauser have made key advancements in preparing and manipulating quantum states. In essence, they have performed the first quantum-computing operations. Today, their techniques and results can be applied to a much wider range of problems and even-more-complex algorithms. For example, some commercial companies are already using the principles of Zeilinger’s research to transport information securely. A few private European banks have even used it to exchange actual money, and pharmaceutical companies are exploring how to apply quantum technology to drug development.

A concerning use on the horizon is decryption. The Shor quantum-computing algorithm can break the RSA algorithm, which is today’s most commonly used encryption protocol. Once a quantum computer that can run the Shor algorithm is built, it will be possible to intercept and view much of today’s encrypted communications and data.

We believe that further commercialization will give rise to important new technologies, such as quantum key distribution or quantum internet.

A call to action for companies

We see two key takeaways from this year’s Nobel Prize in physics. First, executives must have an appreciation for investments in basic research, even if they have no immediate practical applicability. These three experiments were conducted over the past several decades, long before a business use case existed. Yet their progress is helping to usher in a new age of quantum technology.

Second, too much time has already elapsed from the discovery of these innovations to the potential next stages of industrialization and professionalization. Companies need to be on the alert and build dedicated teams and capabilities in quantum technology to capture the opportunities that emerging technologies offer. These teams should evaluate early use cases of quantum computing that might be relevant to their industry—for example, finance, pharma, and energy and sustainability—and increase their preparedness for secure quantum communications today. One natural first step is to identify data that needs to be secure for decades to come but might be prone to “harvest now, decrypt later” attacks.

Companies should also engage with the emerging quantum ecosystem to foster dialogue and identify opportunities to collaborate and speed developments.

As impressive as the findings of Aspect, Clauser, and Zeilinger are, they will be followed by more breakthroughs that challenge conventional wisdom and get closer to making quantum technology commercially viable. Companies should take steps now to ensure they are ready for this exciting future.

Mena Issler is an associate partner in McKinsey’s San Francisco office, Niko Mohr is a partner in the Düsseldorf office, and Henning Soller is a partner in the Frankfurt office.

The authors wish to thank Michael Bogobowicz, Scarlett Gao, Martina Gschwendtner, Anna Heid, and Matija Zesko for their contributions to this post.

For further readings on the applications today, visit McKinsey’s insights on quantum technologies.