Bain & Company analysis indicates quantum computing has moved closer to practical, real-world applications over the past two years, with a potential impact of up to $250 billion across industries like pharmaceuticals and finance. This advancement stems from breakthroughs in fidelity, error correction, and the scaling of qubits—the fundamental units of quantum computing. Tech giants including Alphabet, IBM, and Microsoft, alongside government initiatives, are driving investment in this technology, which encompasses quantum sensing, communication, and annealing techniques. While full market potential requires a fault-tolerant computer at scale—still years away—experimentation costs have fallen, enabling broader exploration.
Quantum Computing’s Potential Market Value
Quantum computing holds a potential market value of up to $250 billion across industries like pharmaceuticals, finance, logistics, and materials science. However, realizing this full potential isn’t guaranteed and will likely unfold gradually. Bain analysis suggests the market could range between $100 billion and $250 billion. Currently, the market for quantum hardware and services is less than $1 billion annually, with projections of $5 to $15 billion by 2035—still far from the full potential unlock.
While substantial, realizing this market value faces barriers including hardware maturity – specifically challenges with scaling, fidelity, and maintaining qubit coherence. Algorithm development is also key, with research slowing in new quantum algorithm development, and quantum machine learning – representing about $150 billion of the potential value – remaining largely theoretical. Practical ROI will depend on surpassing current classical computing capabilities.
Cybersecurity is an immediate concern. Although current quantum computers can’t break today’s encryption, a “harvest now, decrypt later” strategy is emerging. Bain’s survey indicates 73% of IT security professionals anticipate quantum posing a material risk within five years, yet only 9% have a roadmap for post-quantum cryptography (PQC). This transition requires significant effort to update cryptographic landscapes and IT stacks.
Key Barriers to Quantum Computing Maturity
Several key barriers hinder the maturity of quantum computing beyond its current state. Hardware maturity presents steep technological hurdles, including challenges with physical scaling, maintaining qubit fidelity and coherence times, and efficient data loading. The difficulty of scaling increases exponentially with qubit count, differing significantly from the trajectory of Moore’s Law. Overcoming these issues is crucial to building a fully capable, fault-tolerant computer capable of unlocking the technology’s full potential, estimated at $250 billion.
Algorithm maturity also poses a challenge, particularly for realizing the projected $150 billion market value in quantum machine learning. While progress has been made in optimizing existing quantum algorithms, the pace of new algorithm development has slowed. Practical applications require advances in these algorithms, as many current targets are already addressed with classical computing—quantum solutions must deliver sustained performance and cost advantages to justify their use.
Cybersecurity concerns are immediate, with a risk of “harvest now, decrypt later” attacks by malicious organizations. While current quantum computers cannot break today’s encryption, the potential exists, and 73% of IT security professionals expect a material risk within five years. Despite this, only 9% of tech leaders surveyed have a roadmap for implementing post-quantum cryptography (PQC), highlighting a critical gap in preparedness.
Advancements in Quantum Hardware and Algorithms
Advancements in quantum hardware are facing steep technological hurdles, despite recent progress in scaling qubits. Key challenges include achieving physical scaling, improving fidelity and error correction, extending coherence times, and addressing bottlenecks in data loading and qubit control. While qubit scaling doesn’t follow Moore’s Law, the potential remains significant, with a market value potentially reaching $250 billion across industries like pharmaceuticals and finance. However, a fully capable, fault-tolerant computer is still years away.
Despite hardware advancements, progress in quantum algorithms (QA) is slowing. While optimizing existing algorithms continues, developing new QAs presents a challenge. Quantum machine learning (QML), projected to contribute about $150 billion to the market, is largely theoretical due to algorithmic and data-loading bottlenecks. Practical return on investment will depend on quantum computing delivering sustained advantages over classical approaches, even as classical computing continues to improve.
Quantum computing’s immediate impact is seen in cybersecurity. Though today’s systems can’t break current encryption, the threat of “harvest now, decrypt later” strategies is real. A Bain survey found 73% of IT security professionals expect quantum to pose a material risk within five years, yet only 9% have a roadmap for post-quantum cryptography (PQC). Transitioning to PQC requires mapping cryptographic landscapes and updating protocols, a process that could take years for large organizations.
73% of IT security professionals expect this to be a material risk within five years, and 32% expect it within three years, though some expect it will take longer.
Bain’s recent survey
Cybersecurity Implications and Post-Quantum Cryptography
Cybersecurity is a pressing concern with the advancement of quantum computing. While current quantum computers cannot break today’s encryption, malicious organizations are adopting a “harvest now, decrypt later” strategy, storing sensitive data for five or more years. A recent Bain survey found 73% of IT security professionals anticipate quantum posing a material cybersecurity risk within five years, with 32% expecting it within three. Deploying post-quantum cryptography (PQC) is becoming a necessity to protect data.
Despite the recognized threat, preparedness remains low. Only 9% of tech leaders surveyed report having a roadmap in place to address the quantum cybersecurity risk. Transitioning to PQC requires a comprehensive process, including mapping cryptographic landscapes, updating protocols, and ensuring compliance. For large organizations with legacy systems, implementing PQC could take years to fully complete, highlighting a significant challenge.
The transition to PQC involves updating IT and cyber technology stacks with PQC-enabled solutions. This need arises because quantum computing has the potential to overcome current encryption standards. Bain’s analysis emphasizes that even if it takes years for quantum computers to crack today’s encryption, proactive measures are vital for safeguarding sensitive data against future decryption threats.
Quantum Computing as a Complement to Classical Computing
Quantum computing is not expected to replace classical computing, but rather to complement it as part of a broader range of solutions. The report indicates quantum computing will play a targeted role, specifically solving certain problems where classical approaches fall short. While a fully capable, fault-tolerant quantum computer is still years away, early applications in areas like simulation and optimization are projected to boost the market to between $5 billion and $15 billion by 2035, though this remains far from the potential $250 billion market value.
The source highlights several technical hurdles preventing immediate widespread quantum computing adoption. These include challenges with physical scaling, maintaining qubit fidelity and coherence, reliable quantum memory, and efficient data loading. The difficulty of scaling increases exponentially with qubit count, differing from the more predictable progress seen with classical computing’s Moore’s Law. Advances in both hardware and quantum algorithms are needed to reach full market potential.
A critical near-term implication of quantum computing is cybersecurity. The report notes a real potential for quantum computers to overcome current encryption methods, leading some organizations to adopt a “harvest now, decrypt later” strategy. While widespread cracking of encryption isn’t immediate, 73% of IT security professionals expect a material risk within five years, though only 9% currently have a roadmap for addressing post-quantum cryptography (PQC).
Quantum computing will not replace classical computing—it will complement it, becoming an important part of a broad mosaic of solutions.
