The 5G standard is a technological breakthrough that has a huge impact on the global economy.
In particular, a survey on the impact of 5G on the economy held by IHS Markit shows that the new generation of mobile technology will “catapult into the exclusive realm of General Purpose Technologies, like electricity and the automobile, that provide the foundation for massive innovation and give rise to new industries.”
The analysts predict that by 2023, 1 billion users will have access to 5G, which at the speed from 500 Mbps to 1 Gbps will bring the data transmission capacities to a critically 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. In addition, industries such as retail, healthcare, education, transportation and entertainment will also benefit from the new mobile standard.
In 2035, the 5G value chain will generate up to $3.5 trillion in revenue and support up to 22 million jobs all over the world.
PSB Research has interviewed more than 3,500 people, including business leaders, analysts and technology enthusiasts on what they expect from 5G: 91% of respondents hope that new products and services will appear, while 87% expect the creation of new economic sectors.
The evolution of the technology
5G stands for “fifth generation.” The first generation (1G) of wireless cellular network technology was created in the late 1980s, when the first commercial analog network was launched.
2G appeared in the early 1990s and became the first truly digital network that enabled encrypted calls and SMS text messages.
The 3G telecommunication networks took a while to deploy, and they became standard and widely used only in the mid-2000s. They provided mobile internet access.
4G, the fourth generation of broadband cellular network technology, was another step towards providing even more advanced services such as data streaming. 4G then transformed into the Long Term Evolution (LTE) standard, which is now considered the fastest and most popular version of 4G.
5G will become a quantum leap in the development of the capacities of mobile telephony. Calls, text messages and internet access will remain the same, but the speed of data transmission will increase to a complete new level.
Three advantages of 5G
The impact of 5G on the world is provided by its three main advantages:
- Enhanced Mobile Broadband, eMBB.
5G networks will insure high capacity and speed for transmitting bidirectional high-definition video and large volumes of data. eMBB is the base for the creation of apps that use augmented reality (AR) and virtual reality (VR) technologies. It will reveal a whole new ways of interaction between people and data using computer vision (CV) and machine learning (ML).
- Massive Internet of Things, mIOT.
5G networks can provide one million simultaneous connections per square kilometer. Such density is required to efficiently implement advanced IoT apps. For example, large networks of sensors to collect data sets that are necessary to use artificial intelligence for smart electric power plants.
- Mission critical services, MCS.
A 5G network can transmit traffic with lowest possible delays providing reliable support for tasks where this issue is crucial – for instance, for a remotely controlled intensive care unit at a clinic.
Direct benefits
Enterprises engaged in the production sector that support 5G are expected to show an overall performance growth of about 20-30%, product assembly time decreased by 50%, operational asset durability increased by 20%, and defect detection efficiency at 90%.
In the retail sector, 5G will help provide a new level of consumer experience in stores through opportunities of video streaming and XR visualization, which will result in a sales growth of 50%.
As regards healthcare, 5G will provide remote post-operative care services, saving over 30% of finances and improving patient treatment.
In the automotive industry, the connected vehicle technology can reduce road accidents by 80%, potentially saving $3.6 bln in damages and decreasing overall traffic by 25%.
As to the public utilities sector, the use of smart sensors and drones to monitor power transmission lines will reduce the risk of wildfires, potentially saving billions of dollars.
Not only does 5G provide a better performance as compared to 4G but it also significantly expands opportunities for mobile data exchange. For instance, there is a huge gap between 4G and 5G telemedicine user experience. In the first case, a patient can communicate with a doctor via FaceTime to receive a prescription, while a 5G-enabled virtual session allows a dermatologist to accurately diagnose skin cancer with the help of real-time high-resolution images.
Connected to a common network
The world is becoming increasingly interconnected. By 2023, some 29.3 bln devices are expected to be connected to the internet via IP networks, about three times the number of the world population. This will include 14.7 bln M2M connections, or 50% of all network devices.
The COVID-19 pandemic has shown that upgrading tools used by “connected” employees can improve the quality of cooperation between specialists based in different regions and support growth in their productivity as well as opportunities for further training. 5G can provide “connected” workers with all necessary tools and access to data.
The key advantage of connected products and digitized services is the opportunity for improving and re-imagining them through updating software via networks. Today, digitized services are constantly evolving; they expand opportunities and improve user experience. Efficient development requires a modular IT architecture to ensure that new functions do not negate the existing ones.
A similar approach is highly likely to be implemented in network infrastructure, with such standards as 4G/LTE, Wi-Fi and even 3G to remain relevant for a long time alongside with the 5G groundbreaking technology. 5G networks will become the key driver for a new stage of technological and business advancement.
With plenty of new connected devices, sensors, IT platforms, cloud environments and microservices, their efficient synchronous operation can be properly ensured only with available effective network base. The colossal capacity and speed enabled by 5G will provide a secure connection for an increasing number of simultaneously connected devices, IT resources and various control models.
Like many technologies in their early stages of adaptation, 5G will require further research as well as investments for its development and deployment; so far, all benefits of new generation networks are not very obvious due to a number of restrictions as well as the necessity to make the maximum use of the already deployed 4G networks.
However, given the exponential growth of data and increasing amount of smart devices, transition to essentially new data exchange tools will very soon become critical, with 5G technologies to play their role.
By Maria Grigoryeva, Managing Director, Accenture Russia