First-mover advantages and challenges TABLE 4 Technology Strategic advantages Timelines of early success Potential pitfalls Quantum computing21 Technological leadership: Early adopters can establish themselves as leaders, setting standards and influencing the development of the ecosystem. Competitive edge: Access to advanced systems early on provides capabilities to solve complex problems faster and more efficiently – a significant competitive advantage. Economic impacts: Quantum computing has the potential to revolutionize industries such as finance, pharmaceuticals and healthcare to drive economic growth and job creation.Commercial (1-2 years): Hybrid quantum-classical algorithms and initial commercial quantum computing applications are developed. Prototype (3-5 years): Quantum error correction and scaling improve significantly, leading to broader adoption in various industries. Experimental (6-10 years): Enhanced error correction and optimization techniques make quantum computing more reliable and accessible. Theoretical (10+ years): Fully fault- tolerant quantum computers are available, unlocking unprecedented computational power.High R&D costs: Significant investment in research and development is required, with no guaranteed returns. Unpredictability: The maturation of quantum computing technology is uncertain, and breakthroughs may take longer than anticipated. Skilled workforce: Building and retaining a workforce capable of developing and utilizing quantum computing technology is a major challenge. Export controls: These could restrict the transfer of quantum algorithms, software and hardware that may be deemed a national security risk for the country. Quantum sensing22 Precision and sensitivity: Quantum sensing offers unparalleled precision and sensitivity, which is set to revolutionize the healthcare industry and is on its way to aid defence and environmental monitoring. New applications: With early investments, it is possible to discover novel applications and markets for quantum sensors, positioning companies as industry pioneers. Data advantages: New data insights can be seen improving decision-making processes and operational efficiencies; however, capitalizing on this still far away.Commercial (1-2 years): Prototype quantum sensors are in the marketplace and initially deployed in niche applications. Prototype (3-5 years): Quantum sensors are integrated into existing systems and expanded into broader markets. Experimental (6-10 years): Quantum sensor technologies are refined and optimized, improving reliability and performance. Theoretical (10+ years): Quantum sensing achieves widespread adoption and standardization.Market uncertainty: The demand for sensors is still evolving, so early adopters may face uncertain returns. Integration challenges: Integrating with existing systems and infrastructure can be costly (e.g. data adoption for decision- making is uncertain). Workforce training: Developing expertise in quantum sensing technologies and their applications requires investment in workforce training and education (e.g. upskilling of healthcare workers) and creation of intuitive interfaces. Export controls: Sensors that have potential military applications (e.g. quantum navigation) may face strict export limitations. Quantum communication and security23Information-theoretic security: Theoretical unbreakable encryption can provide a significant advantage in cybersecurity. Trust and privacy: Early adopters can position themselves as leaders to foster trust and protect sensitive information. Strategic leverage: Countries and companies that lead in quantum communications (networks) can gain strategic advantages in intelligence and secure data transmission.Commercial (1-2 years): Demonstration of practical quantum key distribution (QKD) systems and deployment of quantum random number generators (QRNGs) into cybersecurity systems and critical infrastructure, followed by pilot projects that combine post quantum cryptography (PQC). Prototype (3-5 years): Quantum communication networks expand and are integrated with classical infrastructure. Experimental (6-10 years): More advanced QKD protocols and scalable quantum communication systems are developed. Theoretical (10+ years): Global quantum communication networks are established, enabling secure international data transmission.Technological hurdles: Developing reliable and scalable quantum communication systems presents significant technical challenges such as geostationary equatorial orbit (GEO) and low earth orbit (LEO) satellite 24 communications for QKD. Regulatory issues: Regulation is still developing, potentially leading to legal and compliance challenges. Skilled workforce: Building a skilled workforce capable of developing and maintaining quantum communication systems is crucial and challenging. Export controls: Restrictions could apply to quantum encryption of physical devices that are deemed critical infrastructure. As noted in Table 4, being a first mover in the quantum technology space offers significant strategic advantages, including technological leadership, competitive edge and economic impact. However, these benefits come with risks, such as high R&D costs, technology unpredictability and the challenge of building a skilled workforce. Decision-makers must carefully weigh these Embracing the Quantum Economy: A Pathway for Business Leaders 12

Embracing the Quantum Economy 2024