Quantum Computing for Sustainable Value Creation — Maëva Ghonda Exclusive Interview

Quantum Computing for Sustainable Value Creation

Two years ago the corporate giant — Sumitomo Corporation — launched its enterprise-wide Quantum Transformation (QX Project) to revolutionize society with quantum technology. So, today we meet the exceptional leader who founded this extraordinary initiative: Mr. Masayoshi Terabe, Head of Quantum Transformation (QX) at the Sumitomo Corporation.

Maëva Ghonda: Thank you for joining the Executive Talks of the Quantum AI Institute. We feature the global innovators shaping the future of quantum computing. Today, we welcome an exceptional leader who has been a great partner to me: Mr. Masayoshi Terabe, Head of Quantum Transformation (QX) at the Sumitomo Corporation.

Founded in 1919, the Sumitomo Corporation is now a massive global enterprise that generated 4.7 trillion Japanese yen in revenue in the fiscal year that ended on March 31, 2021. The corporation is headquartered in Tokyo, Japan. It has more than 900 companies and greater than 70,000 employees worldwide. And, it has 112 locations across the globe, in addition to the 22 locations in Japan.

In 2020, Mr. Terabe joined the Sumitomo Corporation and launched the Quantum Transformation Project (QX) to sophisticate the Sumitomo Corporation’s existing businesses and to create new businesses using quantum technology. Fundamentally, QX is a project to revolutionize society with quantum technology. Before joining Sumitomo, he was leading quantum computing application demonstrations in mobility services, factories and air mobility control.

Mr. Terabe is also an associate visiting professor at Tohoku University in Japan. He received his Master degree in Quantum Engineering from Nagoya University in 2007.

Maëva Ghonda: Mr. Terabe, Welcome! Thank you very much for joining me today. What led you to quantum computing?

Masayoshi Terabe: I have always had a desire to change the world through technology. I was a hardware engineer and while exploring various hardware, I saw news about quantum computers. I thought it would change the world! I started research and development about seven years ago, when there were not many application-side efforts in the world.

Maëva Ghonda: What were you doing before launching the Quantum Transformation Project at Sumitomo?

Masayoshi Terabe: I have been an engineer all my life in the automotive industry. The automotive industry is currently in a time of great change. Automated driving, mobility services, EVs, etc. are changing the value of cars. In such a situation, I was conducting demonstrations in factories using quantum computers and mobility services to create new values.

Maëva Ghonda: Quantum Transformation is a highly visible, enterprise-wide initiative. How are resources at the Sumitomo Corporation mobilized around the QX Project to ensure sustainable value creation?

Masayoshi Terabe: Our company is focusing on Digital transformation (DX) and we are positioning QX beyond that. We envision an exciting future and our colleagues who share our vision are cooperating with us from various business divisions.

Maëva Ghonda: What exactly are you challenged to transform with the QX Project?

Masayoshi Terabe: We are developing future applications utilizing quantum computers. For this purpose, we are using our wide business fields from underground to outer space as test beds to envision what kind of future we can create with quantum computers and to demonstrate it with our technology partners.

Image Credit: Masayoshi Terabe / Sumitomo Corporation

Maëva Ghonda: During my Climate Change conference last month, you indicated that you are focused on challenges for social innovation with quantum computers. What do you mean by “social innovation” please?

Masayoshi Terabe: The goal is to create and implement applications that will change society through quantum technology, such as eliminating traffic congestion and reducing CO2 emissions. I believe that quantum computers have such great potential, and I believe that the quantum industry will be accelerated by creating such applications.

Image Credit: Sumitomo Corporation

Maëva Ghonda: The Sumitomo Corporation has integrated sustainability in its growth strategies and business goals as the senior leadership team aims to turn the business portfolio into one that is compatible with a sustainable society. For example, some of your company’s goals in this area include the following: to reduce the group’s CO2 emissions by 50% or more by 2035, to aim for carbon neutrality by 2050, and to shift to businesses with low environmental impact.

Image Credit: Sumitomo Corporation

While the climate crisis cannot be solved by any single innovation… How can quantum computing companies lead the charge and drive transformative changes as it relates to climate action?

Masayoshi Terabe: Quantum computers have the potential to solve the problem of bloated data center power with their overwhelmingly low power consumption. Also, the computational power of quantum computers could solve the problem of adjusting supply and demand, which is becoming increasingly difficult due to the increase in renewable energy. These are only a few of the possibilities, and I believe that various applications will be increasingly demonstrated.

Maëva Ghonda: How many people are on your QX Project team right now?

Masayoshi Terabe: More than 10 people, including inside and outside of our company. There are experts in businesses such as aviation, energy, and finance, as well as experts in quantum technology, AI, optimization, and IT.

Image Credit: Sumitomo Corporation

Maëva Ghonda: To prepare for our discussion today, I read your company’s financial statements and the many investor reports from your company’s Investor Relations (IR) team. During my research, I also reviewed your Corporate Transformation initiatives — referred to as CX in your company’s IR reports. And, the DX activities from your Digital Transformation Center (DX Center) are pretty remarkable. Your DX Center, which launched in 2018, had 15 members in its first year then expanded to 150 members and 300 projects within a 36-month period (by 2021). An accelerator program was also added to your DX activities.

The DX Project appears to be quite successful based on published outcomes. It is stated that these activities have helped introduce: cost reductions, sales growth, more sophisticated decision-making among other positive outcomes for the corporation. Is the QX Project that you created modeled after the DX Project?

Masayoshi Terabe: Yes! We define QX as the transformation after DX. Through DX, a digital infrastructure for various businesses has been created. And, this kind of digitalization is very important for the use of quantum technology because it goes from analog to digital and beyond that to quantum.

Maëva Ghonda: Since your aim with the Quantum Transformation Project is to “create new value” by combining Sumitomo Corporation businesses with quantum computers… Are you anticipating a similar growth trajectory for your Quantum Transformation (QX) Project?

Masayoshi Terabe: As a project, we want to grow as well. And as a business, we want to grow exponentially rather than the same. Since we are using something new, quantum technology, I would like to take on the challenge of creating a discontinuous future rather than improving our existing businesses.

Maëva Ghonda: Are you planning to expand your team? When do you plan to hire more? What type of talent are you seeking?

Masayoshi Terabe: Yes, we are discussing it internally. Ideally, we would increase the number every year.

I believe we need a diverse group of members who understand software within quantum technology, application specialists, business development staff, creators, etc., different from those in the quantum specialty organization.

Maëva Ghonda: Will you launch a QX accelerator program?

Masayoshi Terabe: It is interesting. We have a hardware startup accelerator program and CVC (corporate venture capital), so we already have that capability. I think it would be very interesting.

Maëva Ghonda: What is your ultimate goal for the QX Project?

Masayoshi Terabe: The goal is to create new applications that can only be realized with quantum computers. Although much of the research into applications for quantum computers is still focused on improving existing businesses, I think when quantum unique applications are created, quantum computers will create significant value.

Maëva Ghonda: Which quantum technology systems are you using for the QX Project?

Masayoshi Terabe: We are using D-Wave quantum annealing in the field of optimization and gated quantum computer-based systems in areas such as AI and finance, in collaboration with Classiq technologies in Israel and in-house simulators. Our focus is on applications, so we will continue to experiment with different software and hardware.

Maëva Ghonda: Why did you select those options for quantum hardware and quantum software?

Masayoshi Terabe: Gated quantum computers are still too small to test optimization applications, so quantum annealing is more suitable. Applications created for quantum annealing can be implemented in the future on gated computers using algorithms such as QAOA, making them compatible.

Maëva Ghonda: How do you access quantum technology presently?

Masayoshi Terabe: Right now, we have cloud access to machines in Canada and the U.S. because it is a test. In the future, on the day real-time applications are implemented, quantum computers will need to be implemented in Japan or on-premise.

Maëva Ghonda: Who are your external partners for the QX project? What is each partner’s role?

Masayoshi Terabe: In Japan, we are working with Tohoku University, Keio University and SCSK.

Tohoku University specializes in quantum annealing, Keio University in gated software, and SCSK is an IT company in our group. SCSK is good at system development, so we are working on this with a view to implementing systems in the age of quantum computers.

Overseas, we are working with Classiq technologies in Israel. They make gated software. And, I think their software will contribute greatly to the expansion of the quantum industry because it will allow people to develop applications without specialized knowledge.

Maëva Ghonda: Are you seeking more partners? Who are ideal partners for your QX Project?

Masayoshi Terabe: We are looking for an industrial company that can work together to create and sell applications for the quantum age. For example, they could have businesses in energy, transportation, etc., and create new applications by combining them with our business fields. We expect that combining quantum technology with these businesses will bring great value.

Maëva Ghonda: Are you investing in external quantum technology companies?

Masayoshi Terabe: Yes. We have invested in Classiq Technologies in Israel twice and we are in conversation with other companies.

We have CVC globally and we are always looking for partners. Our CVC locations are in North America, Europe, Israel, Asia, and Japan.

Maëva Ghonda: Can any quantum company approach you for funding? Are you targeting specific types of quantum companies to fund?

Masayoshi Terabe: Of course! I am primarily interested in application and software companies. But, I would also like to talk with companies that I would not expect to work with because I can find new business possibilities by talking with new companies.

Maëva Ghonda: What do you hope to achieve in the next 12–24 months?

Masayoshi Terabe: We would like to evolve our air mobility operation control system using quantum computers that we are starting now into a project that will lead to a more concrete business and our quantum computer ready smart city concept into a more concrete demonstration project. I also hope to create many more projects and to collaborate with more people.

“We would like to evolve our air mobility operation control system using quantum computers into a project that will lead to a more concrete business and our quantum computer ready smart city.” — Mr. Masayoshi Matt Terabe, Head of Quantum Transformation (QX) at the Sumitomo Corporation

Maëva Ghonda: Please explain this vision of a quantum computer ready smart city concept.

Masayoshi Terabe: We envision an experimental city where quantum computer applications are demonstrated and implemented in daily life, and the quantum applications spread around the world starting from that city. For example, the smart city we are developing in North Hanoi, Vietnam, is a huge city that will take 20 years to complete. We are building it from scratch, so we can include various technologies such as digital technology. I am sure that 20 years from now, when the city will be completed, quantum computers will be all over the world. So, we would like to build the city with that era in mind.

Of course, it is impossible to predict what kind of applications will emerge, so it would be great if we can build a foundation that allows us to test various things.

Maëva Ghonda: What are your longer term objectives? What do you hope to accomplish by 2025? By 2030?

Masayoshi Terabe: I hope to use quantum computers in real business applications. Even if it is not a quantum computer itself, I would like to create applications that can seamlessly move into the quantum age using quantum ready algorithms, such as quantum inspired technology, and put them to practical use.

Maëva Ghonda: What are your strategic priorities for QX at this time?

Masayoshi Terabe: I think it is important to involve more people on the business side in the quantum world. Applications cannot be realized only with quantum knowledge. Our company has more than 900 group companies, ranging from underground to space, and we have a wide range of demonstration fields. So, I think that we can work on various areas in the future.

Maëva Ghonda: What do you mean by business side?

Masayoshi Terabe: These are people who can drive applications. When creating applications for quantum computers, it is necessary to have not only knowledge of quantum computers, but also people who can envision what kind of problems need to be solved and what kind of business development can be expected. Although there are many engineers in the quantum computer world today, we need to increase the number of such businesspersons.

Maëva Ghonda: What are priority quantum applications for the QX Project?

Masayoshi Terabe: In terms of early implementation, there are applications like the staffing optimization we did for the logistics warehouse. These things can be implemented without a quantum computer, but we are working on them with an eye toward the quantum computer era. In terms of making major changes in the world in the future, things like the flying car traffic control I mentioned earlier are important.

Image Credit: Masayoshi Terabe / Sumitomo Corporation

Maëva Ghonda: Please tell us about your Autonomous Vehicles Project. What do you hope to accomplish with this project and in what time frame?

Masayoshi Terabe: Flying cars have not yet taken to the skies and are still more than a decade away in the future. I believe that the timeline of quantum computers, the technology of the future, fits very well with these future topics.

Maëva Ghonda: How much have you accomplished thus far?

Masayoshi Terabe: We have been able to demonstrate the system in combination with OneSky’s air traffic control system in the U.S.

OneSky’s system manages flight schedules in real-time, keeps track of weather conditions, signals conditions, and the location of other flying vehicles. Since these external conditions are constantly changing, it is very important to manage them in real-time. However, it is very time-consuming to optimize the entire operation with a classical computer, so we have high expectations for quantum computing.

Maëva Ghonda: Why did you choose this project?

Masayoshi Terabe: It was because we had a highly enthusiastic person in our company who was developing a flying car business. This kind of project could not proceed without the passion of the individual.

Maëva Ghonda: Is this your favorite project thus far?

Masayoshi Terabe: Yes!

Maëva Ghonda: Why does it excite you? Why is this project special to you?

Masayoshi Terabe: In order for many flying cars to fly, it is necessary to read wind, radio waves, and many other conditions in real time, and we believe that quantum technology will speed up the realization of this technology and could significantly change society. I also enjoy working with the people involved because they are all excited about the future.

Maëva Ghonda: You are now in your second year of this exciting journey leading Sumitomo Corporation’s Quantum Transformation Project, QX. What has been the most challenging part of your current job thus far?

Masayoshi Terabe: Using a quantum computer to control the traffic of flying cars. The commercialization of flying cars alone is difficult. The practical application of quantum computers alone is difficult. So, combining the two will be even more exciting and difficult.

Maëva Ghonda: What can we expect from Sumitomo’s QX project by the end of 2022? What do you hope to accomplish this year?

Masayoshi Terabe: We hope to launch and announce several new application demonstration projects.

Maëva Ghonda: What is your longer term vision for the project?

Masayoshi Terabe: The goal is to create applications that can only be realized with quantum computers in the future, and to change the world for the better. That is what Quantum Transformation is all about.

Maëva Ghonda: What are you most excited about for the next 5 years?

Masayoshi Terabe: I believe that there will be many achievements in the world that will surpass existing computers in more practical applications. I am excited to see what kind of computers and software will emerge that can be used for what kinds of applications. I hope that the accumulation of such examples of the superiority of quantum computers will accelerate the development of quantum computer technology as well.

Image Credit: Masayoshi Terabe / Sumitomo Corporation

Maëva Ghonda: Mr. Terabe, Thank you very much for another great conversation. Your fantastic support and expert insights are always greatly appreciated.

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