5G and the impact it will have on our global economy
Our Marketing Researcher in the U.S., Hanif Haghshenas, PhD, took a deep dive into 5G and how it will shape our economy for years to come. By 2023, one billion users are expected to have access to 5G technology. With speeds as high as 500Mbps to 1Gbps, 5G is all set to push our data transfer capabilities to a whole new level.
According to Qualcomm, by 2035 there will be around $12 trillion worth of 5G related services, including mission-critical services, enhanced mobile broadband and massive IoT advancements. Plus, industries such as retail, healthcare, education, transportation and entertainment.
Qualcomm predicts the 5G value chain will generate up to $3.5 trillion in revenue in 2035, and support as many as 22 million jobs. Qualcomm also forecasts that 5G will boost global GDP growth by $3 trillion cumulatively from 2020 to 2035.
A report from PSB Research, which surveyed over 3,500 people, including business decision leaders, analysts and tech enthusiasts, found that as a result of 5G:
- 91% expect new products and services that have yet to be invented
- 87% expect new industries to emerge
- 82% expect small business growth and more global competition
- 85% expect it to make companies more globally competitive
- 89% expect increased productivity
Notably, an economic impact study conducted by IHS Markit and validated by Dr. David Teecethe indicates that 5G will catapult mobile into the exclusive realm of General Purpose Technologies, like electricity and the automobile, that provide the foundation for massive innovation, give rise to new industries and benefit entire economies. This will happen as 5G advances mobile from a set of technologies connecting people to people and information to a unified fabric connecting people to everything. According to the study, in 2035, when 5G’s full economic benefit should be realized across the globe, a broad range of industries – from retail to education, transportation to entertainment, and everything in between – could produce up to $12.3 trillion worth of goods and services enabled by 5G.
What is 5G?
Unlike previous generations of mobile network, 5G is unlikely to be defined by any single form of technology. It’s often referred to as “the network of networks” because it binds together existing and future standards, including current advanced LTE (4G) networks.
To be clear, 5G isn’t an extension of 3G and 4G networks but rather a network that combines Wi-Fi, 4G, wireless access technologies, and millimeter wave. The 5G technology also leverages various aspects like cloud infrastructure, virtualized network core and intelligent edge services.
Beyond a simple performance increase, 5G is set to open up a whole new set of use cases. From superfast mobile broadband with no need for landlines, to smart factories, to car to car and also car to infrastructure communication, to self-driving vehicles, to holographic technology. Moreover, we will see the arrival of 5G phones and devices such as 5G TVs, and remote health care for patients. As the name implies, 5G technology is the fifth generation of mobile networking systems. 5G is set to be the fusion of high-speed data collection and computation with billion of devices.
Key features of 5G:
Here are some features discussed by 5g.co.uk:
- Faster Speeds – 5G is set to be much faster than previous generation networks – some are saying as much as 100 times faster than existing 4G networks. To get more specific, 5G may offer speeds as fast as 10Gb/s. This would mean the ability to download a full HD movie in under 10 seconds on a 5G network, compared to 10 minutes on 4G. Some estimates see 5G being even faster than that.
- Lower Latency – 5G will also have much lower latency. We’ll see much less delay or lag when we’re using our phones and other devices. With 4G networks, latency is typically around 40-50 milliseconds. With 5G it should be 1 millisecond or less, which is undetectable to the user.
- Greater Capacity – 5G will have greater capacity, meaning the networks will be able to cope better with many high-demand applications all at once – from connected cars and IoT (Internet of Things) devices to virtual reality experiences and simultaneous HD video streaming.
- Reliability – 5G is expected to be ‘ultra-reliable’, meaning no dropped calls or connectivity, which will allow more ‘critical’ use cases such as those related to digital health and connected cars.
- Flexibility – 5G networks promise to be more flexible — network slicing allows a physical network to be divided into multiple virtual networks so the operator can use the right ‘slice’ depending on the requirements of the use case.
- Improved Battery Life – While all this sounds like it might drain your battery pretty quickly, actually 5G is being tipped to extend the battery life of devices by up to ten times
What 5G means for the auto manufacturing industry?
The first generation of self-driving cars may come into play with the transition to 5G. With the help of 5G, smart city and autonomous cars can work hand-in-hand. Your car will sense and choose the optimal route by coordinating with your ETA at work based on traffic data communicated from other cars and the roadways.
Vehicle-to-Everything (V2X) & Vehicle-to-Vehicle (V2V) communication: According to a report by IHS, by 2035, 5G will bring $1.4 trillion in sales in sectors like agriculture, mining, construction, and transportation. 5G supported Vehicle-to-Everything (V2X) communication will play a key role in enhancing the efficiency of traffic and reducing collisions. Meanwhile, Vehicle-to-Vehicle (V2V) communication allows vehicles to sense obstacles beyond the line of sight, with the aid of shared video information between cars and shared data from pedestrians and infrastructure.
How 5G will generate revenue for auto manufacturing industry?
Fixing latency issues: Since 5G will be able to swiftly transmit data, more connected devices could be set up by companies without the fear of an overcrowded network. Ericsson’s investment arm, Ericsson Ventures, has invested in a company called Realm, which has developed a mobile platform that focuses on providing real-time support for instantaneous delivery of applications supported by iOS, Android and a variety of cloud environments. Ericsson Ventures VP, Paul McNamara, calls it the “edge cloud”. Realm CEO Alexander Stigsen discussed the investment as helping to “solve the biggest mobile development challenges, and fulfill the potential of ultrafast 5G networks, powerful mobile devices and limitless developer imagination.”
How 5G will Transform Construction Machines
The advantages of a faster, more reliable 5G network represent a huge step forward in connectivity for any sector. It opens up great potential in the construction industry for processing mobile data, which impacts the ways machines communicate and interact remotely.
5G will be crucial in providing the infrastructure needed to develop autonomous machines. This will mean self-driving construction machines could recognize signals, map an area more accurately, and communicate with each other far more easily than ever before. All of this has the potential to make construction sites run more efficiently and safely.
In sectors such as mining, where it can take several hours of ventilation after blasting rocks before the environment is safe enough for operators to enter, moving closer to removing humans from the production site brings great advantages in productivity and safety. By eliminating the potential safety hazards and downtime associated with operations like mining, the industry can move closer to fulfilling ambitions of delivering zero emissions, zero accidents, and zero unplanned stops.
Mining offers some of the best potential for exploring this technology, according to Volvo Construction Equipment. Mining can be dangerous: both for people operating the machines in remote locations and from the fumes released after blasting rock. But, removing people from the site reduces the risk of accidents entirely. Beyond mining, the forestry industry could benefit too as an industry with many incoming trucks loading and unloading on to trains, often at night. Dangerous jobs in the steel industry or the energy sector can also see an impact in safety and efficiency.
Strengths: Benefits and the business case for 5G:
There is no need for major construction or involvement of the power company to power 5G telecom infrastructure using wireless power like solar-driven systems managed via remote cloud-based controls. This lower cost makes it more economically viable for telecom providers to install 5G in both rural and urban areas.
These features could bring a number of benefits for businesses of all sizes. Still, here are some of the ways 5G could benefit businesses:
- Mobile becoming a ‘general purpose technology’
- Remote working
- Rural innovation
- Tailored networks
- Lower costs
- Flexible office spaces
- Easier commutes
Weakness of 5G:
One of the main problems with mobile networks is latency issues which limit many IoT applications. At present, many IoT solutions use cellular networks like 4G LTE to connect to the cloud, but the devices in these solutions produce a huge volume of data that are difficult to process instantly. 5G could solve the network latency issues, which will lead to increased efficiency and allow more connected devices.
As the South China Morning Post reports, commercial 5G networks are regarded by the US government as easy prey for foreign intelligence agents and hackers, and such concerns are heightened where a military network is subject to hacking and intrusion attempts by adversaries.
5G, a battleground for US and China, is also a fight for military supremacy
Apart from its tremendous commercial benefits, 5G – the fifth generation of mobile communication – is revolutionizing military and security technology. It has become a focal point in some of the tension between the U.S. and Chinese tech companies like Huawei.
But Huawei executives have asked repeatedly, in vain, for evidence of “back doors” in its equipment. BIS, the German internet security watchdog, inspected Huawei labs in Germany and found no evidence, and The New York Times last week quoted American officials as saying that the case against the company had “no smoking gun – just a heightened concern about the firm’s rising technological dominance.”
But commercial 5G networks are regarded by the US government as easy prey for foreign intelligence agents and hackers, and such concerns are heightened where a military network is subject to hacking and intrusion attempts by adversaries.
Opportunities: How the future could be for businesses with 5G:
5G creates tremendous opportunity for numerous industries, but also sets the stage for large-scale disruption. Major 5G network deployments are expected by 2020, and a projected 4.1B IoT cellular connections will use 5G worldwide by 2024, according to Ericsson. From enabling remote robotic surgery and widespread adoption of autonomous cars to improving crop and livestock management, 5G is poised to disrupt the world’s biggest industries including:
2. Energy & Utilities
5. Financial Services
6. Media & Entertainment
12. Cloud Computing
14. Real Estate
15. Public Safety
16. Supply Chain Management
20. Marketing & Advertising
How 5G Networks Will Change America
The potential disruption for this technology goes far beyond being able to watch movies on your iPhone. According to this Forbes article, 5G is what will really kick the Smart City infrastructure into high gear, which will revolutionize America, driving new service and industries. For investors, this is a huge opportunity over the next 5 – 10 years.
How 5G Can Reinvigorate Rural America: One of the biggest societal challenges currently facing America is the rural-urban divide. While urban centers on the West and East coasts have flourished over the past decades, living standards in more rural areas have fallen.
- 5G wireless will give businesses and individuals greater access into the digital economy, thereby providing new opportunities in industries where there are a growing number of jobs.
- 5G will also improve services in these communities by driving the adoption of Smart City infrastructure.
- Wireless 5G will also change the way our cities and towns look. With 5G, these wires will be replaced by simple, discrete poles, each placed 100 – 200 meters apart.
Growth in New Industries: 5G presents a huge business opportunity in the telecoms market. The companies set to benefit most from this revolution are the telecom infrastructure companies, or cell tower REITs, which own cell towers and rent space on them to the network providers.
At the same time, the delivery of Smart City infrastructure presents new revenue opportunities. New market entrants are looking at ways to monetize the sidewalk.
With tens of thousands of devices, there needs to be a way to monitor and manage wireless 5G infrastructure. This presents an opportunity for Software-as-a-Service cloud-computing companies like Microsoft Azure to provide automated, AI-driven management services to not only manage the 5G networks, but the millions of IoT devices that this technology will provide a foundation for.
What companies should do to not fall behind?
According to 56.co.uk, 5G deployment will be a gradual process and it will exist alongside and in tandem with LTE-A 4G, low power wide area network (LPWAN) and other technologies. So any new IT project should ensure systems are forward-compatible and can transition to 5G as it becomes available.
With that in mind, companies may want to transfer any systems or services at the heart of your business into the cloud ahead of 5G’s arrival. The next-generation mobile network will use a high degree of virtualization, so any business – no matter how small – that reduces its reliance on local mainframes will have an instant leg up.
5g.co.uk gives this advice to businesses: It might be helpful to appoint an internal person or team who will ‘own’ 5G in your organization and take the lead in plotting your 5G roadmap. 5G will impact every part of the business and must be considered from every angle. What new products and services might 5G open up for your business? Start planning now to get first-mover advantages. Will you be able to free up office space? Look at when building leases are due to expire and consider not renewing those where 5G is likely to be available and remote working a possibility.
Get ready for a new relationship with your telecoms providers. Will your current provider be in a position to deliver 5G to your area or should you start preparing to work with new ones? The 5G operator will play a much more important role for businesses in future and they must pivot from being consumer-centric operators to working with businesses to understand and meet their needs. Consider which operator(s) might best meet your needs and reach out to start the collaborative process that will be needed to develop useful 5G services for your business. Wherever you’re located in the country, be realistic about when 5G might be commercially available and plan accordingly. Starting to plan for 5G now will reap rewards when 5G becomes a reality.
5G can bring advantages to businesses large and small, but it won’t happen overnight. If it delivers everything it promises to, many expect the introduction of 5G to be a foundation for the fourth industrial revolution – Industry 4.0 – where everything is connected, processed and digitized. This can both transform and advance many existing industries, as well as create new ones.
If your business is in need of deeper research on the impact of new technologies on the construction or manufacturing industries, email us at email@example.com to learn more about how our team can help.