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Fraunhofer discussion on quantum computers - 11.7.2019

”Companies shouldn’t wait to concern themselves with quantum technologies“

In January of this year, IBM brought the first commercially viable quantum computer to the market. Experts around the world are working hard to develop systems with previously unimaginable possibilities. Dr. Erik Beckert from Fraunhofer Institute for Applied Optics and Precision Engineering and Mr. Pascal Spano, Head of Research at Metzler Capital Markets, spoke about the opportunities and risks of this new technology.

Spano: Media coverage gives us the impression that the quantum computer era is just around the corner. Mr. Beckert, how much longer will it be before our systems are fully stable?

Beckert: It’ll probably be another two to five years before the quantum computer is used in daily life. While several research groups around the world are still investigating the basic mechanisms, industrial giants like Google and IBM are already busy developing quantum computers. IBM, for example, already offers a publicly accessible web interface to the first simple quantum computer prototype. 

Spano: Why is the quantum computer head and shoulders above all currently available supercomputers?

Beckert: In contrast to the binary coding of conventional computer science, i.e. "0" and "1", quantum computers use quantum mechanical states or so-called qubits. These can exist in so-called superposition states. Put simply, they can be in "0" and "1" at the same time, allowing arithmetic operations to run simultaneously. Using quantum computers, complex problems can be solved with relatively few qubits. 

Spano: Computer chips have become smaller and more powerful over the years. For decades, chip manufacturers adhered to what’s called Moore's law, meaning the number of circuit components on an integrated circuit doubled every two years. Now, however, manufacturers seem to have reached the physical limitations of chip miniaturization. Do you believe quantum computers will replace today’s PC any time soon?

Beckert: For conventional PC architectures, the usual applications will continue to exist for the foreseeable future. They will not be replaced by the quantum computer.

Spano: What are the greatest strengths of the quantum computer over conventional computers in your opinion? 

Beckert: The full potential of quantum technologies is currently difficult to assess. The current state of the quantum computer is often compared with the first "conventional" computer from the first half of the 20th century. Quantum communications today can be compared to the beginnings of the internet in the 1970s. With some optimism, the rapid advancement of "conventional" technologies leads us to predict similar advancement in quantum technologies. The next decade will provide concrete answers about important applications in quantum technologies and computing. It is assumed that the quantum computer is excellently suited to address special problems and implement complex solution algorithms, for example for simulation purposes.

Spano: The volume of data in the capital markets is increasing steadily. We already have specialized investment companies that evaluate news and data streams to help identify trading signals. We are confident a lot more is yet to happen here. 

Beckert: The quantum computer’s wide range of potential applications becomes apparent during simulation of complex problems, in the rapidity of database research, or in the speed with which complex, specific mathematical problems can be solved. This also makes the quantum computer interesting for players on the capital market. We already have the first start-ups, e.g. JoS Quantum GmbH, that want to use quantum computers to simulate problems related to the capital market. 

Spano: The potential is enormous. Despite all the euphoria, is there also a downside? 

Beckert: Definitely. The quantum computer is deemed a serious threat to conventional cryptography and thus to the confidentiality of communications.

Spano: Could data encryption therefore become a problem?

Beckert: Yes. For example, a special qubit-based algorithm, the so-called Shor algorithm, has proven to be very effective in performing prime factorization, which is fundamental for conventional, math-based cryptography. With today's computers, the time and effort necessary for such computing operations is unreasonable. Although cryptographers are currently working on so-called post-quantum cryptography methods, we still don’t have any mathematical proof that this can’t also be solved using special algorithms.

Spano: Data is the fuel of a digital economy and must be transmitted quickly and, above all, securely. Trust is the main currency here. I’m thinking of Industry 4.0, the Internet of Things, and the flow of goods and money on the global markets. 

Beckert: Although quantum technologies pose a threat to confidential, encrypted communications, they also provide solutions. So-called quantum cryptography aims to implement encryption physically rather than mathematically. Apart from cryptography, the quantum computer is not seen as a threat but as a potential addition to existing tools and processes in simulation and design for numerous fields of knowledge. The quantum computer's capabilities are expected to provide solutions, especially where solving problems in the foreseeable future with today’s computing power would require excessive effort in terms of time and/or costs.

Spano: In our discussions with companies, this topic comes up most frequently in biotechnology, especially in preclinical research where numerous complex molecules and substances are tested for their potential pharmacological efficacy. Recently, for example, the German pharmaceutical and specialty chemicals company Merck announced a cooperation with a start-up company that programs quantum algorithms for such simulations. This seems like an ideal field of application for quantum computers. Is now the right time for companies to look into this new technology? Or should we wait until the first functioning devices go live? 

Beckert: Companies should already be looking at quantum technologies. It’s definitely time to take a closer look at the development of quantum computers and the approaches for their application. In addition to pharmaceutical companies, companies active in the automotive, chemical process engineering and financial sectors are already doing this because the availability of quantum computers must be regarded as given in the medium term and their use can bring a competitive advantage.

Spano: Germany has brought forth several technological innovations, but the business with them has been done elsewhere. This is somewhat regrettable. Germany offers excellent higher education in many disciplines, but we often fail to keep the best brains in the country because we don’t foster an environment that promotes putting that knowledge into practice. In your opinion, how is Germany positioned when it comes to quantum computers?

Beckert: Although quite a bit of basic research in the field of quantum computers is located in Germany and Europe, Europe is less known when it comes to quantum computers because commercial and application-related players from the USA, such as IBM, Google and D-Wave, tend to dominate the quantum computer news. 

Spano: The EU and Germany recognize that quantum technology holds high promise for the future. At EU level, subsidies totaling EUR 1 billion have been granted, and the German government alone has promised EUR 650 million. While this is an important signal for German research, these sums are put into perspective when we consider that Google alone spent more than USD 20 billion on R&D last year. Do we tend to think small rather than big?

Beckert: The EU and the individual national European governments all recognize the need to invest in quantum technologies; in fact, there’s a lot of hard work going into this at the moment. It’s important to have concrete roadmaps for identifying basic research needs, but at the same time, initial investments in fields of application for quantum technologies must also be made. Such investments include quantum cryptography, quantum sensor technology, and the quantum computer.

Spano: Many thanks for this interview.

Dr. Erik Beckert

Dr. Erik Beckert studied mechanical engineering at the Technical University of Ilmenau, where he also received his doctorate in 2005. In 2001, he joined the Fraunhofer Institute for Applied Optics and Precision Engineering (IOF) where he currently fills the function of group leader for micro-assembly and systems integration. In addition to projects in laser and space technologies, Dr. Beckert is also responsible for quantum communications and quantum imaging. In this context, he is involved in large funding projects that set up exemplary quantum infrastructures for physically bug-proof communications between two or more parties.

Pascal Spano

Pascal Spano joined Metzler in 2017 as Head of Research in our core business area Capital Markets. Prior to joining Metzler, from 2013–2017, he was cofounder and Managing Director of the German FinTech startup company PASST Digital Services GmbH in Cologne. Before that he headed the Cash Equities division  at UniCredit Group in Munich and Frankfurt/Main, Germany for two years. From 2007 to 2010, Mr. Spano was Head of German Research for Credit Suisse Ltd. Prior to that, he worked for ten years at Deutsche Bank's Global Markets Research division and helped build up the research activities for ABN Amro in Frankfurt/Main and London, UK. Mr. Spano completed a banking apprenticeship and, alongside his work, he studied managerial economics at the University of Hagen in Germany. He has been a member of the German Association for Financial Analysis for 20 years.

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