Quantum Computing To Create Up To $850 Billion Of Economic Value By 2040: BCG

The Boston Consulting Group has reaffirmed its projection that quantum computing will create $450 billion to $850 billion of economic value globally, sustaining a $90 billion to $170 billion market for hardware and software providers by 2040. BCG had in 2021 published its forecast for the quantum computing market.

According to BCG's report, despite a 50% drop in overall tech investments, quantum computing attracted $1.2 billion from venture capitalists in 2023, underscoring investor confidence in the technology. Governments around the world are also making big investments in the technology, and quantum computing is expected to play a central role in national security and economic growth. Public sector support is expected to exceed $10 billion over the next three to five years, the report showed.

In its 2021 report, BCG expected the market to mature in three phases, and this is still the case. The phases are: noisy intermediate-scale quantum (until 2030), broad quantum advantage (2030-2040) and full-scale fault tolerance (after 2040). Despite maintaining confidence in the projected economic value of quantum computing, BCG's previous assumptions for near-term value creation in the first phase have been optimistic and now revised.

According to BCG, the first phase has not lived up to expectations because of two factors: technical hurdles in hardware development are proving tough to overcome and competition from classical computing has been fiercer than expected. Artificial intelligence has exceeded expectations in scientific fields, offering viable alternatives for previously difficult to solve problems.

However, by leveraging analogue methodologies, quantum machines can still deliver tangible value, especially in materials and chemicals simulations, ranging from $100 million to $500 million a year, during the first phase, the report noted.

Despite being a notable reduction from BCG's 2021 projection, this adjustment is not anticipated to significantly affect the market for hardware and software providers. BCG still predicts a provider market valued between $1 billion and $2 billion by 2030, driven by three factors:

Public Sector Support: As it has done in the past with technologies such as semiconductors, internet and GPS, the public sector is providing substantial support through orders and grants. BCG estimates that public orders already support over half the market, and due to existing programme announcements and geopolitical importance of quantum technologies, this demand should be sustained for the next three to five years.

Corporate Investments: Leading corporations are investing in enterprise-grade quantum capabilities. BCG's 2023 publication on quantum adoption tracked more than 100 active proof-of-concept projects among Fortune 500 companies, amounting to $300 million.

Supply Chains: Providers can generate revenue by forming supply chains that involve equipment such as controls, dilution refrigerators, lasers, vacuums and software. According to BCG's research, supply chain spending will make up 5% to 10% of quantum computing hardware and software revenue this year.

“While there are clear scientific and commercial problems for which quantum solutions will one day far surpass the classical alternative, it has yet to demonstrate this advantage at scale. Nonetheless, the momentum is undeniable,” said Jean-Francois Bobier, a partner and vice president at BCG and a co-author of the report.