Transcript | The Quantum Economy 2.0

We’re currently in the quantum economy 2.0. What was 1.0, you ask? We clear all that up with someone who spent over two decades at NIST. We’ll also explore the business outlook for various quantum technologies in this episode of The Post-Quantum World. I’m your host, Konstantinos Karagiannis. I lead quantum computing services at Protiviti, where we’re helping companies prepare for the benefits and threats of this exploding field. I hope you’ll join each episode as we explore the technology and business impacts of the post-quantum era.

Our guest today is the president of CJW Quantum Consulting. Carl Williams, welcome to the show. He’s interesting, background-wise, because he also spent over 23 years working at NIST, and that’s certainly a name that appears on this podcast from time and time. Great to have you here.

Great to be here, Konstantinos.

Do you want to tell us a little bit about your background — the whole NIST angle. You were there quite a while, so you must have seen it all emerge right before your very eyes.

I have a PhD in very low-temperature atomic physics. I started coming in and engaging with people at NIST in the late ’80s, early ’90s. It was at NIST in 1994 when the first workshop on quantum information, quantum computing and quantum communications was held. The meeting was shortly after Peter Shor had discovered Shor’s algorithm, but this was the first meeting I know of, workshop, solely focused on quantum. I was just a visitor there in the background, but it was a lot of fun. In 1998, I came into NIST full-time. I’d spent a lot of time there in engaging, writing papers, doing research, collaborating.

In 2000, I agreed to coordinate the quantum information programme that we started in that year. I’ve been doing quantum information for more than two decades, and the formal programme at NIST is now more than two decades, even though there was some earlier work from Dave Wineland out in Boulder back in the early 1990s. I’ve watched the whole thing. In 2008, I went to the Office of Science and Technology Policy and set up the first interagency working group around quantum information science, where we basic set government policy on this field. I’ve been involved in setting policy directives and everything else. It’s been fun watching things build out.

All the way back in 2002, we had our first meeting with industry around this area, and there were people even back then who were watching this field — there were companies watching and wondering where the field was going. And we had a meeting in 2002 with industry, and 2007, ’12, ’14 and ’15 — so you can see the increasing pace. Everybody had been knowing this technology was coming, and now, there is a moving train.

Back then, every meeting was, “Yes, it’s 10, 20 years away,” and then it became three to five years away, and now, it’s still three to five years away or something, but, yes, it’s obviously more real. You talked about how you were setting policy, so I’m assuming it’s that approach that you’re bringing to your entire new venture, your consulting firm that you created — this experience at helping companies figure out. I just want to ask you, what made you decide that you wanted to start consulting?

I want to watch the quantum 2.0 economy grow out. I’ve been involved in this for a long time, and I don’t want to help any one company. I want to help the ecosystem as a whole. A lot of issues are coming. This a hard topic. Depending on the activity, if you look at the quantum computing companies, most of them believe that they will be spending more money than they bring in until around 2030 or so. It’s going to take a long time for this economy to grow out, and yet, because it’s so radical, so revolutionary, so disruptive, companies that think that they can adapt and adopt on this technology at the last moment, well, they’ll be too late.

This is a hard one to learn because it is very disruptive. I hate that word — disruptive — or revolutionary, because it gets so misused. But again, think of what the 20th century would be like without the transistor or laser. Those are just component technologies. Quantum information of science is a whole technological field.

Taking a step back for listeners, you used the term “quantum economy 2.0,” and it’s going to be appearing all over the show notes and everything. If someone had to think of what defines the quantum economy 1.0 and then how it becomes 2.0, what would the 2 be, and what would that defining moment be that made it go like that? In the web, we know what that is: It’s when they went from static websites to interactive websites, and then now, to everything web 3.0, they’re hoping will be blockchain based. What makes quantum economy 1.0 different from 2.0?

The reality is, almost all the technology that we have today exists because of quantum mechanics. The transistor exists because there’s band gap and you can use it as a switch. That comes from the fact that quantum mechanics has quantised energy levels. There’s nothing strange about that. The laser exists because of the wave properties of light. We have a lot of technology impact. Tremendous amounts of technologies are based on quantum 1.0 — the so-called semiclassical properties of quantum mechanics.

Quantum 2.0 uses a lot of quantum 1.0 technology, but it also has two concepts in it that are very strange. These are the concepts that bothered Einstein. In fact, people don’t realise that Einstein spent more of his life trying to prove quantum mechanics incomplete than he did contributing to quantum mechanics. He would make comments like, “God doesn’t roll dice.”

What are these two properties? Well, while a semiclassical object must be on or off, like that transistor, a quantum state, if it’s designed well, it can be both on and off at the same time. An electron in a quantum system would be going to two separate slits at the same time. This process is called superposition. The second one, which is even more weird, is called entanglement. In fact, Einstein wrote a famous paper about the EPR paradox in 1934 that describes this one. It is these strange properties that are quantum 2.0. What quantum 2.0 in technology would do is use those tech things to do new things.

There is at least one example, very robust, of quantum 2.0 in the past century, and that is atomic clocks. This is part of the reason NIST was so good at quantum information sciences, because we’ve been building clocks for 70 years. There are a few examples of this — NMR is another one — but the reality is, almost everything in the 20th century was quantum 1.0.

Quantum 1.0 also limits machines and makes quantum 2.0 required. For example, if you build transistors too small — you make the traces too small — the electron that’s supposed to be here representing one might tunnel and be over there and just throw off everything. We’ve almost reached the limit of quantum 1.0 technology in some ways, so we’re not going to be able to follow Moore’s law forever. That’s why we keep adding cores to CPUs and things.

That’s good. It’s an important thing to point out. This economy that we’re talking about is all the ways that we’re taking advantage of these machines that are purely quantum, and obviously, quantum computing is a huge part of that, but you don’t focus just on quantum computing. You’re interested in other applications of quantum.

This technology is going to have a very broad impact. Again, you can talk about integrated circuits and computers, but whoever thought that I would have a Cray in my hand known as a smartphone? The technology is going to impact communications, it’s going to impact sensing, it’s going to impact a lot of things, and in many ways, the technology will probably get used in many cases for doing better classical sensing.

Again, I want to build the world’s most sensitive single photon detectors, whether in the microwave or someplace else. How do I it? I use some quantum 2.0 concepts and technologies. In fact, if you look at the microwave background and its polarisation, this is all building off of some very sensitive technology from quantum 2.0. It’s going to be everywhere. In fact, in the quantum communications regime, the government published a report this past year on quantum networks. The question is, what is the real use of a quantum network? It may be that the real use of this is a sensing network, not a communication network. There’s a lot we don’t know, and we’re going to have to watch the technology build out to determine what the real value and the real use is.

There’s a huge cost overhead with quantum networks, obviously. We’re going to have to build from the ground up on those. I get excited about quantum networks and their use for interconnect and having quantum computers work as one quantum computer. That is the area I’m super interested in. Do you think sensing will take off first, as far as the use for quantum networks? Sensing already is real — it’s the most real quantum technology, in some ways. How do you think that’ll be affected by the ability to have them all linked up? 

I’ll give two examples. There’s a company called Cerca Magnetics, out of Nottingham, England, where they have taken a bunch of atomic magnetic sensors and built a magnetoencephalography system to look at the magnetic responses from the brain. It no longer requires a person to be confined in a chair with a big object that they can’t move around in. This is very important for studying people who have epilepsy or other things.

This is one example — and those are local networks. You’re not using and taking them between them. They’re just individual sensors. The other one I try to give at times to people when I’m trying to tell people we don’t know what it’s used for is, I talk about building a sensor network set out along, say, the San Andreas Fault. I built this network that is just clocks that are extraordinarily sensitive to the gravitational potential of the Earth, and therefore, can see microtension building up in the San Andreas Fault. I say, you build this, you entangle them, and you can watch this micromotion. Perhaps in 20 years, we’ll be able to predict two weeks early that the worst earthquake to ever hit California is coming. That gives us time to evacuate large parts of the Bay Area, perhaps saving millions of lives.

That could get better in the future?

Yes.

Right. Like, MRIs jump out. We think about the use case of machine learning combined with quantum and MRIs. If they can analyse six million MRI scans for people who developed tumors, six months later, they could see the faintest things that a human being couldn’t even detect. Would it be possible, then, to use something like that with these sensors and detect the kinds of pre-ripples that we didn’t even know existed before?

Yes. In fact, every large object, every object, has vibrational motions. This is, again, required by quantum mechanics. The Earth, surprisingly, has them, but until a few years ago, nobody had ever seen any of these motions of the Earth. These are called relativistic geodesy. Effectively, what I’m doing out along the San Andreas Fault is using this to detect a fault line. I could also use it to detect volcanic activity and predict when a volcano might go off.

Again, these sensing technologies could be very sensitive and have very broad implications. I like this kind of example because it can’t be hyped so easily. It is a possibility — I won’t say it’s going to happen — but if somebody uses words like “the quantum internet,” everybody assumes they know this is going to replace the classical internet. Well, it’s not. There’s no hyping of this kind of a concept, because today, there’s no classical technology that could do this.

Yes, and when you’re talking to customers about this kind of thing, are you advising them both on potential uses they haven’t thought of before and its economic impact, or are you focusing more on one side or the other?

What’s important for companies is that they understand how this technology might impact their business model. Some companies care about sensing, some care only about computing, some care about communication, some care about multiple things. You have to look at what the company needs. Then, you can talk about the potential economic impacts it has on them. You have to start from the point of, what is your business model?

Yes, companies want new business models, and I’m all for those new business models, but the main thing to think about is, what’s the potential economic impact of this technology on your current business processes, and then you can begin to think about new things you might do. I prefer going up from that approach because it’s too easy to get hyped on the other path. Unless you’re a startup, it’s just driving down a whole new path, and there are a bunch of startups in their arena.

I was curious, because when we’re consulting companies, usually, we’re going right to the use case. They’ll come and say, “We want to do something with quantum computer,” and then we’ll say, “Well, you do portfolio optimisation, and we can do it probably better with a quantum computer, hopefully.” Then, we go down that path. It sounds like you’re trying to give them that bigger-picture view, too, of what’s possible.

Absolutely. When I talk to a broad audience, I give the example of relativistic geodesy and the sensor network. When I talk to a client, I try to understand their needs, and I often tell them if they’re a big company, they should have a small team inside, because what they need is quantum experts who understand deeply their business, because they will be the ones that will best be able to prepare them.

In fact, all the way back in 2002 — this is one of the things I’ve learned from the companies at the time. Again, at that time — and I usually don’t drop names, but Motorola no longer exists, so I’ll drop Motorola’s name — Motorola was at the meeting, and the VP for Motorola basically said to me, “We just spent three man-years evaluating this technology. It’s not time for us to move.” I thought, “Three man-years — that’s a lot of time and effort.” In some ways, I was shocked, and then I was saying, “How do you prepare? How do you know when it’s time to move?” High-tech companies are all looking at this area because they’re all trying to understand how this technology is going to impact them.

The numbers you hear sometimes about the impact on the economy are huge. I keep hearing the trillion word appearing when they’re talking about this industry over this decade. It’s almost mind-boggling. It’s hard to imagine, but then you start to multiply how many companies are going to play in it and what’s going to be involved, and you quickly get there. Do you use any kind of specific sourcing for generating numbers like that to help customers understand? Is there anything you could trust for predicting that kind of thing? It seems everyone’s guessing.

A bunch of companies have come out with predictions of what the quantum computing market is, and they’re all within a factor two or three of each other. They’ve used different methodologies and approaches. They’re all making fairly reasonable estimates.

To understand the long-term impact, I try to give another example. You look at how much of today’s world is impacted by the semiconductor industry, because it’s everything, with smartphones, computers and everything else. It’s trillions and trillions of dollars. This technology is, as far as we know, the most powerful technology that will ever be developed based on the laws of physics, because you can’t build something that violates the laws of physics. As a result, I suspect that by the end of this century, it won’t surprise me if 20–30% of the economy depends on this technology in one form or another. It is going to evolve, and it’s going to be very disruptive. Companies that don’t see it coming will lose.

Again, this is something I went back in 2002 to because a different VP of one of the high-tech companies at that time said to me — I asked him, “How do you know when it’s time to move?” He says, “When the ship leaves port, you better be on it, because companies go bankrupt because they miss evolutionary trends, because there are very few revolutionary disruptive trends.” It’s far harder to prepare for those, and companies need to spend more time preparing for those. This is partly why companies are involved today in looking at this field. I am sure some your clients are involved in part because they want to be sure that they are prepared and understand how this might impact them, because you aren’t going to do it at the last moment.

It’s like when we call people either leaders or fast followers or slow followers. Where do you want to be on that, and what will that cost you?

All the time you were at NIST, had you come across something that NIST viewed as an emerging wave, something that’s going to change the world, and then they were just flat-out wrong? I mean, maybe they didn’t publicise it. Quantum, let’s face it, is getting a lot of press, but was there something in that time where it’s like NIST was sure that they had to start warning people or something, and then at the end, they were just like, “I guess it wasn’t a big deal after all”? Did anything like that ever come up to learn from?

No. We all sometimes think we have a cool technology that it’s going to displace something, but it’s a technology. This isn’t one thing; this is a whole set of things. If you ask me to go make a prediction of what’s going to be the most valuable —quantum networks, quantum computing or quantum sensing — I’m going to shrug my shoulders. We can all guess it’s probably quantum computing. If I had to take a guess, I’d put all my eggs there, but I don’t have a clue. I’m saying this — I never saw a broad sector misguessed. People will misguess specifics because you can’t always guess how rapidly something else is going to evolve or something else. On the broad side, not really.

That’s interesting. Some things have been misguessed overall because we didn’t realise how important, like, IT would be. If you go back far enough, everyone’s vision of the future was that by now, we’d have personal jet packs and flying cars, and no one realised that we’d be more focused on IT. That’s why we didn’t bother developing all that other stuff. I was just wondering if there’s anything like that that came up at NIST, and then they were like, “It looks like that wasn’t something we had to worry about after all” behind closed doors or something. I thought that would be entertaining.

No. Not really. Like I said, you missed the application, the specific app: “I never thought you would use it for that.” You get shocked by the fact that somebody comes up with a new way of using a technology or a gizmo. In fact, this is one of the benefits for the young people in this area. To learn a little bit about quantum, look, you want to have a perspective. You’re going to grow up with this technology, and you’re going to have an ingenious thought that none of us ever thought about because you’ve grown up with it. We see this, again, with young people all the time. I know growing up, my daughter could reprogramme my smartphone to do things I didn’t know it could do far quicker than I could ever figure it out. And I’m tech-savvy — I thought.

Yes, the internet was a great example of that when it first appeared. What did we think it was going to be? A billboard and a way to communicate quicker. Who predicted social media and things like — we’re barely scratching the surface there, and I have a feeling that’s going to happen to quantum. The use cases will be pouring forward.

Do you talk to companies, then, about how to find talent and how to build that part of it? It’s not just about investing in the technology — you have to be able to have talent in this space. Are they concerned with that? Have they started asking those types of questions?

A lot of companies are concerned about the talent pool. The pressure is not as bad in quantum as it is in the AI field at the moment, but it is tough. The reality is, many of them are foreigners, so there’s a whole immigration issue, and where you get your talent, and most of the companies, even the small ones, the startups, they’re already looking and saying, “If I’m going to be successful, I have to be international.” So, they’re opening offices abroad. So, there’s the internationalisation. Some part of that internationalisation is sometimes that, “Yes, I want this specific aspect of quantum information. It’s great to open up an office there because of a great talent pool nearby.” All this comes up in talking with companies.

In fact, what I want to do with the companies is, what are the common issues that need to be solved, overall, to ensure the quantum economy grows? What can I do with you and three or four of your competitors together that will raise the boat, because I believe the big high-tech companies are going to compete against each other royally and robustly, and everything else.

What’s important is that we create the ecosystem necessary for them to succeed. That means having a good supply chain, being sure that we’re doing technology protection in a manner that both protects them and allows them to compete globally. It’s looking at all the big issues that evolved, and on the technology-protection piece, how we do technology protection today has evolved from the time of World War II. It’s not been relooked at. This is a great time to relook at how we do it because, again, every company wants to protect its intellectual property, and yet, they need to have a global supply chain and offices in many places and locations. It has to be an international effort, not just a one-country effort.

On the topic of an international supply chain, recently, I thought it was interesting that we’re starting to see examples of blocking certain types of technology from leaving, let’s say, the U.S. That’s already starting again. It almost felt like the crypto wars again and the days where we wouldn’t allow a certain level of encryption to be sent overseas. We’re starting to see that now. The U.S. doesn’t want to send certain quantum computing technology to China, for example. That’s already appearing. How do you think that’s going to shake out?

I would look at it that it’s not just the U.S. It is the high-tech companies that no longer trust. China’s government has passed official policies that theft of intellectual property from others is perfectly OK, which it’s not. You have to ask, well, what are the norms that we’re going to compete around worldwide? Everybody has to agree by the same norms. Then, there will still be people who disagree and go to court and fight and everything else, but at least there has to be a foundation or a basis for fair and equitable exchange and engagements. And that cannot include, “Well, the only way you can sell in my country is to turn over your intellectual property.”

What would you see as the biggest work that needs to be done for a trusted international supply chain first to keep this growing, because it’s obviously important?

We all have to agree upon the rules. We all want to also create an environment where we can help ensure that companies don’t get their intellectual property stolen. Governments have a responsibility to help protect the economic engines that drive their economies. That protection should not be about helping steal, but it should be about helping ensure that those who want to steal, whether they are cyber criminals or nation-states that don’t respect intellectual property, are protected, because prosecuting somebody after they’ve stolen the crown jewels, the company’s already lost. It’s much better to prevent those interactions.

We have to take a much more proactive stance, and as countries around the world agree, we’re going to do this and work collectively to protect what I would increasingly say, multinational corporations. Again, many of the big companies, if you look at them, the fraction of their profits that are made abroad and everything else are quite large. They manufacture abroad, and they do many other activities. We have an interest in protecting them because this is what drives the world’s economy, and, of course, all of us tax it. This is how our governments pay for each other. There’s a real responsibility to do this in a fair, equitable, responsible, open and transparent manner.

When we talk about things that could affect the entire economy when it comes to quantum technology, one of the biggest ones is, obviously, this threat that we need post-quantum crypto to prevent. NIST has, of course, been working on the finalists for ciphers. Working in that, did you get the sense that they were working on it just in case one of the big companies developed a machine powerful enough to reverse, let’s say, RSA or something, or were they worried that there was something private going on, like some kind of nation-state developing a machine that might not have been in the public eye?

We have monitored and followed the evolution of this field enough that I don’t think there is any real nation-state big effort going on that’s going to surprise us. All the quantum businesses around the world know each other. We’ve been playing with this and talking about it for years. Back in the mid-2000s, IBM talked with our cybersecurity folks, which is where our crypto is done, and we started looking at companies and everything else. We continue to monitor the companies, and we look at their road maps and everything else.

We basically got to a point where we decided we had to go and begin to come up with new algorithms to replace the two asymmetric algorithms essential to establishing a good, secure communication link. Those are signature-based things and authentication-based algorithms. The AES, the symmetric piece, does the encryption for the final transaction is more or less safe.

But those other pieces, we begin to realise NIST has a long history of understanding how long it takes to replace all the public key infrastructure. This is a decades-long effort. We’re in a race now, and the race is a race between getting the algorithms there, getting standardised, getting them out in place and having companies act in a quick and responsible manner at the same time as the hardware companies are pushing their technologies farther and farther.

We will call it a race because, at least at the moment, we believe we’re reasonably confident that we can get enough of the crypto replaced and it’s not a real risk to the global economy, but that will require everybody to do their part. That means people replacing all their crypto infrastructure in their companies, including on the back ends, which they may not know they have, and hoping that the general-purpose quantum computer that can break reasonably good encryption. Some people still use legacy stuff, and there are a lot of small devices that have legacy stuff, but at least almost all the important stuff should be replaced in time before this computer comes around and is widely accessible.

Yes. I definitely don’t believe in the whole conspiracy thing, though — there’s some secret quantum computer we don’t know about, or anything like that. For me, the big surprises are going to come either from some technology we hadn’t thought up yet, like a way to make a better cubit or a way to make machines work together, like interconnect. That’s going to be one of those two surprises that will get us there faster than we might have anticipated, but I don’t think it’s some secret machine that’s lurking in the world. It just seems hard to keep something like that quiet.

Konstantinos, I agree with this. It is still possible that something disruptive may come along, but each year that we go another step, when you look at the road maps, these companies have numerous hard problems to solve. Then, relying just on the technology side, some of them are on what I would call the classical side of it. You look at the very low temperature cryogenic system you would need for some of these devices. This is a massive cryogenic system. We have examples of that. We use them at CERN, but they exist in very specialised locations, not running a computer.

So, there are going to be engineering hurdles. Some of them we haven’t even thought of yet, you know — when we try scaling — so it’s always going to be tricky.

I appreciate you sharing your decades of insight here. This was a great conversation, and thanks so much for joining me.

It’s my pleasure, Konstantinos. It was a lot of fun, and I look forward to further engagement.

Now, it’s time for Coherence, the quantum executive summary where I take a moment to highlight some of the business impacts we discussed today, in case things got too nerdy at times. Let’s recap.

The quantum economy 2.0 features the use of superposition and entanglement in technology, unlike quantum 1.0, which was based on semiclassical technology like the transistor. This new economy will feature quantum computing, sure, but also networks and sensing. Sensing is already resulting in better medical scanning and will be applied in other fields, like improved detection of coming earthquakes.

Many companies involved in quantum computing will be spending more than earning until around 2030. Starting too late will make it hard to play catch-up, though. Companies need to consider now what their business model is and what impact quantum will have on it later. When do you enter the fray? How much staff will you need to participate? Consider how quantum 1.0 affected our economy last century. Transistor-based tech is found in trillions of dollars’ worth of industry. Quantum 2.0 could be 30% of our overall economy this century.

There may already be global supply chain issues in quantum 2.0. China has been known to not respect intellectual property rights. We’re already seeing export regulations similar to what happened in the early days of cryptography. NIST is selecting new ciphers to combat the threat that powerful quantum computers will close to cryptography, but companies will have to do their part and replace obsolete cryptography. This includes digging into legacy areas they may not even have accounted for. It takes time to replace crypto, and the time is now.

That does it for this episode. Thanks to Carl Williams for joining to discuss the quantum economy 2.0, and thank you for listening. If you enjoyed the show, please subscribe to Protiviti’s The Post-Quantum World, and leave a review to help others find us. Be sure to follow me on Twitter and Instagram @KonstantHacker. You’ll find links there to what we’re doing in quantum computing services at Protiviti. You can also DM me questions or suggestions for what you’d like to hear on the show. For more information on our quantum services, check out Protiviti.com, or follow ProtivitiTech on Twitter and LinkedIn. Until next time, be kind, and stay quantum curious.