By David Kindt
The Next Technological Revolution
Every once in a while, a technology appears that does not solely improve one sector but fundamentally reshapes entire economies. The car and the aeroplane transformed mobility and global connectivity, the personal computer and the internet transformed how people work, communicate, and access knowledge. Today, artificial intelligence (AI) is revolutionising our entire economy across healthcare, finance, manufacturing, media, logistics, and basically every other industry.
While this transformation is still ongoing and it feels hard to overestimate the implications it will have on our future lives, there is already another such innovative technology lurking in the not-so-distant future: quantum technology.
Quantum technology can be divided into three main categories: quantum computing, quantum communication, and quantum sensing. All three have their importance, but quantum computing is by far the most important one, and has the ability to secure a huge geopolitical advantage for the country that achieves the deciding breakthrough. It will amplify additional breakthroughs across the wider innovation ecosystem and make decryption of the most commonly used form of data encryption possible. [1]
The Magic Behind Quantum Computing
Regular computers work on a system of bits that are either on or off. The core innovation behind quantum computers is that they use so-called quantum bits (or qubits), which can be in both states (on and off) at the same time — a situation called superposition. The computational advantage can be demonstrated using the example of a maze that the computer has to navigate through. A classical computer has to try each path one by one. A quantum computer using qubits, however, is able to simulate the different paths simultaneously. As a result, quantum computers can solve certain problems far more efficiently and much faster than classical systems. [2]
Economic Advantages and Q-Day
The most obvious reason why states care about reaching quantum supremacy is the economic potential it offers. McKinsey estimates that the three main quantum technologies could gain up to $100bn in market value by 2035 and about $200bn by 2040. The field with the highest potential, however, is quantum computing, whose global market size is predicted to rise up to $72bn by 2035 [3]. The reason for this is its high probability of fundamentally changing multiple different sectors.
One of the industries that is expected to be influenced strongly is the healthcare industry. Drug discovery, for example, could become cheaper and faster because quantum computers are capable of creating high-precision simulations of molecular interactions [4]. The same logic applies to materials science, as quantum computers could be used to predict molecular behaviour to identify more advanced and sustainable materials. In the financial services sector, significant changes can be anticipated as well. As quantum computers can process vast datasets and solve complex optimisation problems far more efficiently than classical computers, financial forecasting could become even more accurate [5]. Advanced forecasting will also help the energy sector because energy can be stored more efficiently when demand and supply can be predicted more accurately. [6]
Beyond its economic potential, quantum computing also carries significant security implications. A large share of today’s global digital infrastructure depends on data encryption methods that are expected to be decryptable by quantum computers around 2035. The day this becomes possible is referred to as “Q-day”. The nation that reaches this point first could gain major advantages in surveillance, intelligence, and cyber operations. Diplomatic communication, military systems, financial transactions, and critical infrastructure would all become vulnerable. [7]
At this point, quantum communication comes into play. It uses the principles of quantum physics to transmit information in a way that makes any interception immediately detectable. Yet, even this does not fully eliminate the risks, as bad actors could already store data and decrypt it once the technology becomes available — a strategy known as “harvest now, decrypt later“ [8]. Therefore, even before the arrival of “Q-day”, sensitive information is already at risk.
A Race of Two Systems
The two most important states in the quantum race are China and the United States of America (USA). China selected the development of quantum technology as a national priority in 2016. The USA followed in 2018 with the National Quantum Initiative[9]. Since then, both countries have pushed forward aggressively, but with two very different approaches.
The USA is largely dependent on corporate investment from large technology companies such as Google, IBM, Intel, and Microsoft. Furthermore, there is significant reliance on start-ups [10]. The US leads with 77 out of 274 worldwide quantum start ups, and in 2024, just two of these raised almost half the total deal value in the quantum sector. And there is also substantial public investment. Over the last years, the USA has announced about $6bn in investments in quantum technology. [11]
China, on the other hand, follows a state-led highly centralised model. About half of quantum publications are backed by a state-linked entity, the National Natural Science Foundation of China[10]. In its 14th quinquennial plan, China committed to spend more than $15bn on quantum research [12]. In 2025, it also announced investment of around $136bn towards emerging technologies [11]. As China is highly secretive about its investments, however, it is difficult to determine exactly how much of that money is allocated to quantum technology.
Over time, both countries have developed their own areas of strength. The USA has a notable lead in quantum computing, as American companies are able to produce quantum computers with significantly higher qubit counts than Chinese companies [10]. China, in contrast, is the clear leader in the field of quantum communications and has already established a 2,000-km secure communication network connecting cities from Beijing to Shanghai [13]. In quantum sensing, the two countries remain at a similar level. [10]
Quantum technology is no longer just a futuristic concept, but a new strategic battlefield of geopolitical competition. With the USA and China pursuing different paths and leading in different areas, the race remains unresolved yet. But once a decisive breakthrough in quantum computing is achieved, the entire geopolitical order could change. The implications would extend far beyond economics, reshaping power structures in cybersecurity, intelligence, and military strategy. In this emerging landscape, technological leadership in quantum systems may ultimately become one of the defining determinants of global influence in the 21st century.
Edited by Adrian Kai Fraile Itagaki.
References
[1] U.S.-China Economic and Security Review Commission. (2025, November 18). Vying for quantum supremacy: U.S.-China competition in quantum technologies.
[2] Financial Times. (2023, May 3). Quantum computing. https://ig.ft.com/quantum-computing/
[3] McKinsey & Company. (2025, June 23). The year of quantum: From concept to reality in 2025. https://www.mckinsey.com/capabilities/tech-and-ai/our-insights/the-year-of-quantum-from-concept-to-reality-in-2025
[4] McKinsey & Company. (2025, August 25). The quantum revolution in pharma: Faster, smarter, and more precise. https://www.mckinsey.com/industries/life-sciences/our-insights/the-quantum-revolution-in-pharma-faster-smarter-and-more-precise
[5] World Economic Forum. (2025, January 17). Quantum technology and its business impact. https://www.weforum.org/stories/2025/01/quantum-technology-business/
[6] World Economic Forum. (2025, January 8). Quantum computing and energy forecasting. https://www.weforum.org/stories/2025/01/quantum-computing-energy-forecasting/
[7] Boston Consulting Group. (2025, October 15). How quantum computing will upend cybersecurity. https://www.bcg.com/publications/2025/how-quantum-computing-will-upend-cybersecurity
[8] Federal Reserve Board. (2025). Harvest now, decrypt later: Risks and implications. https://www.federalreserve.gov/econres/feds/files/2025093pap.pdf
[9] Chou, A., Manyika, J., & Neven, H. (2025, January 7). The race to lead the quantum future. Foreign Affairs. https://www.foreignaffairs.com/united-states/race-lead-quantum-future-chou-manyika-neven
[10] The Economist. (2024, December 31). China is catching up with America in quantum technology. https://www.economist.com/business/2024/12/31/china-is-catching-up-with-america-in-quantum-technology
[11] McKinsey & Company. (2025, June). Quantum technology monitor 2025. https://www.mckinsey.com/~/media/mckinsey/business%20functions/mckinsey%20digital/our%20insights/the%20year%20of%20quantum%20from%20concept%20to%20reality%20in%202025/quantum-monitor-2025.pdf
[12] McKinsey & Company. (2023, April). Quantum technology monitor 2023. https://www.mckinsey.com/~/media/mckinsey/business%20functions/mckinsey%20digital/our%20insights/quantum%20technology%20sees%20record%20investments%20progress%20on%20talent%20gap/quantum-technology-monitor-april-2023.pdf
[13] ScienceDaily. (2025, March 19). Quantum communication network developments. https://www.sciencedaily.com/releases/2025/03/250319142833.htm
[Cover picture] Kvistholt, T. (n.d.). A red light inside a structure [Photograph]. Unsplash. https://unsplash.com/fr/photos/une-lumiere-rouge-qui-se-trouve-a-linterieur-dune-structure-7dRmpT3vxV8
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