by Scarlett Gao, Martina Gschwendtner, Hussein Hijazi, Nicole Morgan, and Henning Soller
Quantum computing’s massive potential for disruption has traditionally been tempered by its extended timelines for development. A quantum computer able to function at scale might not be viable before 2040—and possibly later. So far, investors have settled in for the long haul, and industry observers have had to look beyond traditional indicators to gauge meaningful progress.
Conflicting signs cloud the outlook. On one hand, global tech companies are spending billions of dollars in an attempt to achieve an advantage in quantum computing, and national governments have allocated significant sums of money to mobilize their scientific communities. On the other hand, higher interest rates have tightened the flow of funding to start-ups, raising the specter of a “quantum winter” in which investment dries up and chokes innovation.
The critical question is whether quantum computing will follow a trajectory resembling space exploration (in which the concentration of investment and a clear goal led to a moon landing in relatively short order) or nuclear fusion (where recent breakthroughs only reinforced the ground still left to cover). Our market research1 at this stage does not show clear indications of a coming quantum winter.
The challenges of achieving quantum computing at scale
One of the exciting but complicating elements of charting quantum computing’s development path is that multiple technologies could be used for its hardware—superconducting circuits, photonic networks, spin qubits,2 neutral atoms, and trapped ions. Each technology has benefits and drawbacks, and companies ranging from start-ups to global tech leaders are racing to conduct experiments to secure their position in the market.
All of these technologies must overcome one or more key challenges:
- High-fidelity two-qubit gates at scale. Maintaining a high fidelity (generally understood to be greater than 99.99 percent) is required for fault-tolerant quantum computers.
- Speed. The limited qubit “life span” (coherence time) requires gate operations to occur at a high enough pace to enable complex computation and to execute the complete computation in a reasonable and meaningful amount of time.
- Multi-qubit networking. On a universal quantum computer, qubits could, in principle, connect to any other qubit on the device to perform gate operations, either directly or through SWAP gates.3 The key challenge for many qubit designs lies in connecting qubits across chips.
- Individual qubit control at scale. The control of individual qubits becomes increasingly complex as the number of qubits increases.
- Cooling power and environmental control. As quantum computers scale, the size and power requirements of the cooling equipment become cost prohibitive.
- Manufacturability. The production of large numbers of quantum computers would call for the automation of manufacturing and testing. While some designs can use existing technologies, others would require the development of new manufacturing techniques.
Gauging market viability
In the coming years, the march toward a functioning quantum computer at scale could pick up momentum. The exact timing remains difficult to pin down, however. Despite the obstacles that lie ahead, two indicators offer cause for optimism.
Level of investment to date
A variety of companies have committed significant funds to the development of quantum computers, algorithms, and applications. Our recent discussions with 22 tech executives, investors, and academics at organizations of various sizes (from start-ups to well-established companies) found that 67 percent will be making investments of more than $10 million over the next five years (Exhibit 1).
Private-sector investments have been complemented by funding from governments around the world, which are engaged in a quest to establish quantum computing primacy. A total of $34 billion in government investments have been announced, although the timelines for distributing funds vary by country (Exhibit 2). China and the European Union account for more than two-thirds of this total. The US government has increased its funding for quantum computing (including $1.8 billion announced in 2022), with a total announced investment of $3.7 billion.
This concentration of funding and resources for quantum computing across the public and private sectors could achieve substantial progress in the next 12 to 15 years. In our conversations with tech executives, investors, and academics in the quantum computing space, 72 percent expect to see a fully fault-tolerant quantum computer by 2035. The remaining 28 percent of respondents believe that this milestone won’t be reached until after 2040.
The quantum computing talent pool
Another challenge for quantum computing is finding enough qualified candidates to ensure this technology reaches its full potential. In our discussions with tech executives, investors, and academics, they were nearly split on whether the talent market was sufficient to satisfy demand: 45 percent noted a talent shortage, while 55 percent reported no trouble finding qualified candidates.
The disparity could be explained by several factors. Small start-ups grow out of university research labs and typically have direct access to skilled candidates. Larger companies might have less of a connection to these talent pools and find it more difficult to attract employees with the appropriate level of knowledge.
A company’s size also has a bearing on its outlook: since many quantum computing companies are still in the early stages of development, they have a limited need for talent. As organizations start to scale, qualified candidates will be at a premium.
Where a company focuses in the quantum computing stack also affects its talent equation. The development of quantum computing hardware and coding language calls for employees with specific skills. In contrast, more workers are familiar with the high-level algorithms that support quantum computing, suggesting talent won’t be a bottleneck for this part of the stack.
Initial indications suggest quantum computing companies will have sufficient funding and talent to weather uncertainty in the years to come. With these foundational elements in place, the industry could be positioned to experience the next breakthrough sooner than expected.
Scarlett Gao is a consultant in McKinsey’s London office, Martina Gschwendtner is a consultant in the Munich office, Hussein Hijazi is a consultant in the Dubai office, Nicole Morgan is a consultant in the Prague office, and Henning Soller is a partner in the Frankfurt office.
1 Our research included interviews with 22 tech executives, investors, and academics in the quantum computing space at organizations of varying sizes.
2 Qubits = quantum bits.
3 A SWAP gate “swaps” the state of two qubits.