Quantum Computing for Business: A Growing Potential
By Floriane Charles
Quantum computing has recently surfaced as an upcoming innovation. While the concept emerged in the 1980s, to this day there are no perfectly functional quantum computers available for use, but there have been advancements which deserve a closer look. The main advantages of quantum computers are their speed and ability to perform much greater calculations than classical computers. This allows for better analysis in fields such as medicine, space exploration, and business areas like finance.
Quantum vs. Classical Computers
In order to truly understand the potential of quantum computing for business, one must first understand the differences between classical computers and quantum computers, along with how the latter works. While classical computers run on what we call bits, either 1s or 0s, quantum computers have qubits, which, using the concept of quantum mechanics, could take both values at the same time.
Furthermore, quantum computers use the concept of entanglement to link those qubits together in order for them to influence each other. Entanglement, also often called “spooky action at a distance”, refers to the odd property found in quantum physics where subatomic particles are linked to each other. For example, a pair of entangled electrons will have one spinning one way (let’s say up) and the other spinning, for the sake of this, down. If a physicist were to measure the spin of one of these electrons and found it was up, we would instantly know that the other electron is spinning down. However, because of one of the main principles of quantum physics which states we do not know which way the particle is spinning until the observer acts on it (measures it), it can be both spinning up and down until the measurement. Similarly, a qubit in a quantum computer can be both a 1 and a 0. When one is declared a 1, the other entangled qubit will be a 0. In classical computers, bits are processed sequentially, but in quantum computers, the entanglement allows for the state of one to influence another and thus, to intrinsically converge on the right answer far more quickly.
Moreover, the answers given by a quantum computer are probabilistic: questions are run multiple times giving a sample of possible answers, therefore increasing confidence in the best answer provided. So, while a classical computer struggles with running a question multiple times over and over, a quantum computer actually strives on it. In reality, quantum computers do not just do things faster, they do them completely differently.
Quantum Computing for Finance
As previously mentioned, quantum computing could potentially greatly contribute to the field of finance. More specifically, it can revolutionize what is known as high-frequency trading (HFT). A quantum computer’s abilities to make accurate predictions well ahead of time would be crucial to trading. Today, decisions on Wall Street are made milliseconds after an event has occurred. Wouldn’t it be preferable to make that decision even before? In a scheme where an investor would like to evaluate the distribution of outcomes under an extremely large number of scenarios generated at random, a classical computer and copula are insufficient. A quantum computer could not only do this easily, it could even predict the value of the stocks in question for the next 100 years. Or it could simultaneously go short and long on every stock in the world. However, it could do those things without anyone knowing, which could cause issues. In that perspective, while trading ahead of the market would be possible with quantum computing, the increasing difficulty to detect it could possibly exacerbate issues with rogue traders.
Quantum Computing for the Business World
In addition, there are more general applications of quantum computers with the power to revolutionize the world of business. With speed as one of the main selling points of quantum computing, one can imagine many scenarios in which this ability would benefit their day-to-day operations. Examples include things such as calculating the most efficient delivery routes for supply chains, data analysis, or boosting machine learning. David Schatsky, managing director and leader of the US Innovation group's Trend-Sensing Program at Deloitte LLP, stated: “if corporate executives have certain analytical workloads that could take them weeks to run and they could do it almost instantaneously, how would that change the way they make decisions, or the risks they’re willing to take or what products and services they can offer to customers?” Any business could benefit from the use of such a computer, which is why today governments and companies have and are both investing in research. According to Deloitte, the field has attracted US$147 million in venture capital in the last three years, and US$2.2 billion in government funding globally. Google has announced it is working on quantum processes that it could make available to companies over the cloud, while Microsoft said last fall it was ready to go from research to engineering with its quantum work.