When I began my tenure here at MLR Media, I am not ashamed to admit that I really didn't know what artificial intelligence was. Check that. I had heard of artificial intelligence, but I simply thought it was the movie Steven Spielberg directed as a tribute to Stanley Kubrick, who wanted to make it but didn't because he didn't think the computer-generated graphics were developed enough at the time (2001's A.I. Artificial Intelligence stars Haley Joel Osment and Jude Law and is incredibly underrated. Check it out if you ever have a spare 146 minutes.).
But now, thanks to the many informative articles I have had a chance to prepare for our pages, as well as the thought-provoking sessions we have had at our conferences, I would say that I have a thorough understanding of what we more frequently refer to as AI.
I hope you feel the same way after having read this issue, which is dedicated to the topic. One term that often accompanies conversations surrounding AI is a term that gives me a feeling similar to what I felt about artificial intelligence in my early days: “quantum computing.”
I don't know about you, but when I see this term, it gives me the shivers. As a nontechnical person, one who becomes anxious by the idea of simply changing a password for a website, quantum computing seems way beyond my expertise. I mean, isn't the word “quantum” based in time travel? Or do I only think that because I was a Scott Bakula fan who grew up in the early 1990s? Anyway, the number one way to face your fears is to confront them, so I figured the best way for me to learn about quantum computing was to do some research online.
According to Josh Schneider and Ian Smalley, who wrote “What Is Quantum Computing?” for IBM's blog, “Quantum computing is an emergent field of cutting-edge computer science harnessing the unique qualities of quantum mechanics to solve problems beyond the ability of even the most powerful classical computers.” This is certainly a useful definition, but of course terms like “quantum mechanics” and “beyond the ability of even the most powerful classical computers” have the potential to make one feel even more underwater than they did when they started the search for information. After reading that blog post, I knew it was time to go to an expert.
Josh Klein is a board member, advisor, and tech and innovation consultant. He is CEO of Indigometrics, founder of H4X Industries, an expert advisor for World 50 Inc. and an expert network member of World Economic Forum. His advisory boards have included BP and Eyrir Venture Management. And we have been lucky enough to have him appear in Directors & Boards as an author and contributor on several occasions, with stories on everything from AI to cryptocurrency to the future of talent to lean transformations. According to Klein, “At its core, quantum computing is a fundamentally new model of computation. Traditional computers operate using bits, which have binary states of either 0 or 1. Quantum computers, on the other hand, use qubits, which can exist in multiple states simultaneously.”
Perhaps sensing that my brain was already beginning to swim all the way from his home in Iceland back to the U.S., Klein added, “The point is that the impact isn't about doing what we already do but faster. It's about solving entirely different categories of problems in entirely new classes of speed.”
The onset of quantum computing has the potential to affect private companies in what Klein calls “three primary arenas of impact”, which are security disruption, competitive edge via optimization and valuation volatility.
According to Klein, quantum computing has the potential to break widely used encryption protocols currently securing things like emails and banking systems. To make things worse, this isn't a task that can be saved until quantum computing matures. Describing the issue known as “harvest now, decrypt later,” Klein says, “Bad actors are already storing encrypted data today to crack it once quantum capabilities appear. This changes the entire life cycle threat model for data protection, because it means we must act now to prevent vulnerabilities to capabilities that will appear later.”
Companies that are able to master the benefits of quantum computing will establish advantages that will leave their competitors struggling to catch up. This is especially true in fields like logistics, pharmaceuticals, energy and finances. Klein presents the examples of route optimization, portfolio risk modeling and new material simulation, which all present opportunities for gains in speed and efficacy.
“Companies who first integrate quantum capabilities will establish insurmountable leads in their industries,” says Klein. “This is because understanding, implementing and operationalizing these capabilities is an arms race for whom the first actors will have an appreciating lead.”
Klein believes as industries transform under quantum disruption, repricing will take place across all market segments, much as it did when cloud and mobile reshaped tech valuations.
“Imagine that same rejiggering across chemicals, banking, automotive, telecom and national defense simultaneously. Quantum is horizontal because it affects the base fundamentals of computation, which are core to all industries. The market will reward those who adapt early.”
Directors are busy people and the issues they need to be knowledgeable about and conversant on change on a seemingly daily basis. With that in mind, you are probably asking, “When it comes to quantum computing, how important is it for boards to know about it, and how fast do I have to become an expert?” The good news is the answer to the second part of that questions is “Never.”
“Boards don't need to become quantum experts, period,” says Klein.
But, he does stress the importance of being literate in quantum computing in the next 12 to 18 months. Among the key responsibilities for boards will be understanding which business lines are most vulnerable or primed for advantage, knowing which vendors and partnerships are moving the needle and with whom you can partner, and having an informed point of view on quantum risk, starting with cybersecurity and data retention.
As boards work to ensure the management of their companies are prepared for the effects of quantum computing, Klein recommends a “dual-track approach” based in risk governance and opportunity stewardship. And as for questions boards should be asking, he says the best queries will be focused on whether the company is engaging with quantum labs, whether the company has personnel or partners monitoring the evolution of quantum computing and whether the company has a budget for experimentation and preparedness.
Because, as is the case with many of the issues facing boards on a daily basis, winning in the field of quantum computing won't be about who has the biggest brain in the boardroom, but which board has the largest and most efficient ability to see around the corner.
“This isn't about managing hype. It's about ensuring optionality and resilience,” says Klein. “Although quantum computing may not hit this year, when it does, the delta between those who prepared and those who didn't will be existential.”