Hype aside, what is quantum computing, really?

In order to get ready for what’s next in a constantly changing business world, we can’t really wait for the future before we start living it. That’s why, with our feet firmly planted on the ground in today’s reality, we must also simultaneously be preparing for jobs that don’t currently exist, using technologies that haven’t been invented, to solve problems we haven’t yet identified.

It isn’t easy to get the ball rolling. A recent study by research consultant CB Insights, for example, revealed that while 85% of strategy executives in more than 600 top companies say disruptive innovation is very important, they don’t walk the walk: 78% of their innovation portfolios are allocated to incremental, not disruptive, change. Some of them might argue that thinking big and betting large is just too much of a risk in a period of constant change.

It seems that just as we get data analytics and robotic process automation down, up pops a new form of machine learning or artificial intelligence. Quantum computing (QC) is one such emerging technology, and, by all accounts, is poised to be the next really big thing.

So, what exactly is quantum computing?

One helpful metaphor often used to compare conventional and quantum computing is to think of a coin. In a traditional computer processor, a transistor is either 0 or 1 — heads or tails of the coin. But if you spin the coin on end, you can say it is both heads and tails at the same time. Rather than encoding information using 1s and 0s, a QC qubit can represent a 0 and a 1 at the same time, known in physics as superposition. This single difference lets qubits conduct vast numbers of calculations all at once, massively increasing computing speed and capacity. Multiply that one coin by dozens more and you have an exponential increase of possible 0 and 1 combinations, representing a mind-boggling level of computational power.

One expert described it as the computing tool to solve what more typical computers have yet to figure out, or, in other words, solving what have up to now have been known as “intractable problems” — too complicated for traditional computers because those can focus only on a relatively limited number of tasks at a time, whereas a quantum computer can consider thousands of possibilities simultaneously. And, being probabilistic, rather than deterministic, it returns a lot of very good answers in a very short amount of time along with a set of additional good alternatives from which to choose.

How will society use it?

Factoring very large numbers is an example of an intractable problem for today’s conventional computers and forms the basis of the encryption methods used to guarantee the security of credit card information for online shoppers. However, before you get concerned that QC will add to existing headaches over cybersecurity, the flip side of this very large number property is its ability to disturb any attempt to “spy” on it, thus also making QC a strong ally in creating even safer, more secure encrypting techniques.

Beyond cybersecurity uses, technologists also look forward to the time that quantum computing power can be used in other intricate and highly complex modeling, such as weather forecasting, climate change predictions, streamlining air traffic control, improving financial analysis, troubleshooting manufacturing and supply chain problems, and in biochemistry and “bioinformatics” that will contribute to treating and curing intractable diseases like cancer.

QC’s impact on the tax function

At EY, we are engaged in research about the technological and societal “revolution” that will succeed our current Digital Age, which is being called the Neuro Society era. We are exploring the possibilities that will come with QC and other advances that actually embed technology in humans, while also collaborating with our own “ecosystem” partners from business, government and academia on the impact of all these new technologies on humanity. We call it Humans Inc., and we’re asking probing questions such as “What is our approximate lead time on preparing for this new era?” and “How do we ensure humanity is preserved?”

No one really knows whether QC and neuro breakthroughs are 3, 5 or 10 years out; as a result, it’s hard to predict exactly how they will impact the tax function. However, here are a few projections:

1. We certainly can envision QC’s capacity for processing massive amounts of data and its exponentially faster computing speed having a positive impact on financial planning and tax compliance and planning processes. We also foresee it contributing to predictive analytics reports that equal or surpass what human analysts are capable of doing today.
2. Quantum computing is being heralded as the apex of data security. Even though a quantum computer could crack many of today’s encryption techniques, predictions are it will also create a new hack-proof standard of security. This means filing taxes and tax data could be safer in a few years than it is today.
3. Even though quantum computers will be better at complex tasks, traditional computers will still be the go-to for everyday tasks such as desktop publishing and spreadsheets. Although tax professionals may not need to learn how to use a quantum computer in the foreseeable future, it’s imperative that they stay abreast of the changing tech landscape so they achieve a useful level of awareness and understanding.

The computing solution for the next 100 years

Some experts say QC is the computing technology for the coming century, and the race is on among leading technology companies to be the first to build a meaningful quantum computer. Due to its potential for widespread impact — in business, government, medicine, law enforcement, education and more — there’s talk of developing a national strategy around it, bringing all of the affected constituencies together to help shape QC’s future role.

Staying out in front of relentless technological developments is demanding and often confounding, but it will prove rewarding for those who embrace the journey and ultimately reap the long-term value. Quantum computing definitely will play a role in taking current artificial intelligence capabilities to an entirely new level of performance for tax and many other business disciplines and services.

Portions of this article appeared in the September 27, 2018 edition of Information Management.

The views expressed are those of the author and do not necessarily reflect the views of Ernst & Young LLP or any other member firm of the global EY organization.

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