Canadian organizations expect quantum computing to be mainstream by the end of the decade but most need to step up investment to harness benefits and manage risk: KPMG

Vast majority plan to invest but barely half are actively prepared for its arrival or have fully assessed risks

TORONTO, May 31, 2023 /CNW/ - Six in 10 (59 per cent) Canadian organizations expect quantum computers – capable of solving problems exponentially faster than ordinary computers - to become mainstream by 2030, finds new research from KPMG in Canada. Despite most believing the technology is coming, barely half (53 per cent) say they are preparing for its arrival or have fully assessed (55 per cent) the risks associated to their organizations.

The Case for Quantum (CNW Group/KPMG LLP)

"Quantum computing could be the biggest revolution since the beginning of modern computer science," says Alexander Rau, a partner at KPMG in Canada's cybersecurity quantum risk practice. "The early adopters of quantum could unleash a massive data processing and analysis advantage over their competitors in the market."

Quantum computers can analyze an almost infinite number of possible solutions to a problem to find the one that's the most viable, says Mr. Rau. "Quantum computing will improve and expedite artificial intelligence (AI), manufacturing processes, drug and chemical development, weather forecasting and financial modelling, among other things. For companies to realize the full potential and benefits of quantum computing, they need to start strategizing, planning and investing now."

KPMG in Canada surveyed 250 large corporations – 90 in Canada and 160 in the U.S. – and found that while only 17 per cent of Canadian companies have made investments in quantum to date, as many as 85 per cent plan to do so within the next five years.

When asked what types of problems they were looking to address with quantum computing, nearly a quarter (23 per cent) of the respondents are looking at it to improve business practices, such as manufacturing, logistics and distribution, 19 per cent to improve their security, and 18 per cent are to improve their AI capabilities.

Key Survey Findings:

• 59 per cent of large Canadian corporations expect quantum computing to become mainstream by 2030 (vs. 78 per cent of U.S. companies surveyed), while 31 per cent are unsure of the timeline (vs. 16 per cent of U.S. companies)
• 53 per cent are preparing for the arrival of quantum computing (80 per cent of U.S. companies)
• 55 per cent have fully assessed the risks associated with quantum computing (73 per cent of U.S. companies)
• 85 per cent have either already invested in quantum or plan to within the next five years:
• 17 per cent have already invested (vs. 36 per cent of U.S. companies)
• 20 per cent plan to invest within the next six months or are currently evaluating their investment plans (vs. 34 per cent of U.S. respondents)
• Another 48 per cent plan to invest in quantum computing solutions within the next five years (vs. 25 per cent of U.S. respondents)
• 16 per cent are currently using quantum computing or quantum computing simulators (41 per cent of U.S. respondents)
• 30 per cent are currently designing quantum computing strategies and are evaluating it in a few areas (26 per cent in the U.S.)

Cracking Codes

While Canadian organizations recognize the potential of quantum computing, they are also concerned about the risks, with 56 per cent saying they are "extremely concerned" about the potential of quantum computers to break through their data encryption and six in 10 (59 per cent) believing "it's only a matter of time" before cybercriminals start using quantum to decrypt the most-common cybersecurity protocols. 

Despite these concerns, only one quarter of organizations are prepared for the potential threats posed by quantum computing. Four in ten (39 per cent) say they are not prepared while 37 per cent are unsure.

"Organizations need to understand that hackers and cybercriminals will be quick to use quantum to decipher encrypted data. If an organization isn't focused on developing its defences now, they will be at risk of mega-data breaches that will result in major losses, reputational damage and possibly lawsuits," says Rau.

The KPMG survey finds that six in 10 (62 per cent) say they need to do a better job evaluating their company's security to ensure their data remains secure, while nearly half (48 per cent) fear their organization will wait until quantum technology has matured before it does anything about it.

"Current encryption standards that would take a traditional computer many years to crack will take a quantum computer less than a day to decrypt," warns Feite Kraay, IBM Alliance Director, KPMG in Canada. "It's important that as companies invest in and adopt quantum computing solutions that they also simultaneously assess potential vulnerabilities and establish an action plan for their data protection infrastructure."

Other key highlights:

• 39 per cent are not prepared for the potential threats posed by quantum computing, (61 per cent of U.S. companies) and another 37 per cent are undecided (vs. 16 per cent of U.S. companies)
• 56 per cent of Canadian companies are "extremely concerned" about the potential of quantum computers to break through their data encryption (vs. 67 per cent of U.S. companies)
• 59 per cent say "it's only a matter of time" before cybercriminals will use quantum computing to decrypt the most common cybersecurity protocols (vs. 73 per cent of U.S. companies)
• 57 per cent are "extremely concerned" that cybercriminals will use quantum computing to decrypt even the most-sophisticated encryptions (vs. 68 per cent of U.S. companies)
• 62 per cent say they need to do a better job evaluating their company's security to ensure their data remains secure (vs. 81 per cent of U.S. companies)
• 48 per cent fear their organization will wait until quantum technology has matured before it does anything about it (vs. 64 per cent of U.S. companies)

For more insights on quantum computing, visit KPMG's blog series by Alexander Rau and Feite Kraay:

Canada: Into the qubitverse - KPMG Canada
It gets worse before it gets better - KPMG Canada
Everything ends online - KPMG Canada
Breaking the law - KPMG Canada
Slow and steady wins - KPMG Canada

About the KPMG Canada poll

KPMG in Canada researched the opinions of 250 companies in Canada and the U.S. about quantum computing and artificial intelligence (AI) between February 21-26, 2023, using Sago's Methodify online research platform. Of the 250 companies, 90 are based in Canada and 160 are in the U.S. The majority of respondents included Information Technology Directors, CEOs/business owners and Executive/Senior Vice Presidents. 55 per cent of companies are private and 45 per cent are publicly traded. The companies surveyed have annual gross revenue between $500 million and over $50 billion.

About KPMG in Canada 

KPMG LLP, a limited liability partnership, is a full-service Audit, Tax and Advisory firm owned and operated by Canadians. For over 150 years, our professionals have provided consulting, accounting, auditing, and tax services to Canadians, inspiring confidence, empowering change, and driving innovation. Guided by our core values of Integrity, Excellence, Courage, Together, For Better, KPMG employs more than 10,000 people in over 40 locations across Canada, serving private- and public-sector clients. KPMG is consistently ranked one of Canada's top employers and one of the best places to work in the country. 

The firm is established under the laws of Ontario and is a member of KPMG's global organization of independent member firms affiliated with KPMG International, a private English company limited by guarantee. Each KPMG firm is a legally distinct and separate entity and describes itself as such. For more information, see kpmg.com/ca 

SOURCE KPMG LLP

For media inquiries: Roula Meditskos, National Communications and Media Relations, KPMG in Canada, 416-549-7982, [email protected]