By Aman Kayal (Editor-In-Chief)
The promise of 5G has been echoed throughout the business world for years. 5G’s faster speed, lower latency and ability to connect vastly higher numbers of devices than previous generations of mobile technology offered executives a glimpse of a more efficient and productive future. By providing the basis for ubiquitous ultra-fast broadband, 5G opens up possibilities far beyond the reach of 4G or Wi-Fi. Digital technology is widely used in related industries of the national economy and has become a new driving force for economic development. As a new type of communication technology, 5G is playing an increasingly important role in modern society. At present, more and more industry fields have developed and used 5G technology. The competition of 5G is not only competition in the communications field but also competition between industries and economies, between countries and regions. It is also a good opportunity to open up various industries and enter the information revolution. The 5G technology will completely change the current operating mode of many industries and bring greater convenience to people. Compared with traditional communication technology, 5G technology has outstanding features in all aspects, such as new network architecture, flexible spectrum sharing technology, fast transmission speed, strong transmission stability, and short delay.
5G is expected to play a major role in contributing towards a cumulative economic impact of $1 trillion by 2035. Experts claim that 5G could deliver an additional GDP of $150 billion for the country, between 2025-40.
As 5G, the next generation of mobile connectivity rolls out in coming years, it will create value in many industries and for society as a whole. Innovative uses of the technology show promise in a wide variety of settings: hospitals equipped with 5G devices that enable remote patient monitoring, and smart ambulances that communicate with doctors in real time; digital wallets that connect phones, wearables, cars and other devices to create seamless financial transactions; and 5G-enabled factories in which connections can be maintained among more sensors than ever before. Such scenarios illustrate the economic impact of 5G mobile technology, which we measured through its ability to increase efficiency and productivity. Besides offering up to 100 times the speed and 1,000 times the capacity of today’s mobile networks, 5G will provide ultra-reliability, low latency, reduced energy use and massive connectivity both inside and outside of buildings. The result will be broadband that’s not just superfast but ubiquitous.
5G network is expected to have a total of US $1.3tn impact on global economy. Some of the main sectors expected to get impacted by 5G networks include Manufacturing, Heavy Industries, Healthcare, Finance and Entertainment.
When considering the manufacturing sector, it’s expected to contribute maximum (US $134bn) to the global GDP. More 5G phones and other 5G-ready devices will be needed, which is expected to bring forth a much-needed boom in the manufacturing sector. As a domino effect, even the retail sector will see a boost from 5G devices and 5G applications. Additionally, as more products get sold, the servicing and resale industries will also see a boost. The manufacturing sector in India will be the largest contributor to the benefit brought about by mmWave spectrum, accounting for 20% of the total impact. We expect eMBB and FWA to account for the greatest shares. The manufacturing sector in India is preparing to adopt new, disruptive technologies to drive improvements in productivity. The Confederation of Indian Industry has tracked 37 Industry 4.0 case studies across the country, in markets including automotive, industrial equipment, food processing and pharmaceuticals. The government’s Make In India and Aatmanirbhar Bharat initiatives are laying the groundwork to enable both small and large companies to develop Industry 4.0 capabilities.6 Several mmWave-enabled 5G applications can help realise the potential of 5G for Industry 4.0. These include remote control systems, industrial robotics, remote monitoring and quality control, and autonomous factory transport.
The Industrial Sector is expected to contribute $ US218bn. The advanced network connectivity of 5G will result in more remote-controlled systems in factories, which can provide much-needed safety in hazardous environments. Factories should also see massive automation which will bring in increased productivity, efficiency, and control. Incase of smart utilities the global industry is at the forefront of a sweeping energy transition that will radically alter business models and customer interactions. For this, 5G is well-suited to achieve these goals, given its ability to connect a massive number of devices and its low-power modes for long-term sensor applications. These same capabilities will help to make 5G a cornerstone of smart city applications worldwide, as its use by utilities will dovetail into the wider digitisation of people’s lives through improvements in connectivity. 5G network would benefit the economy through better waste management and reduced solid waste. 5G will enable better use of applications such as pay-as-you-throw digital tracking. This involves monitoring and charging for solid waste disposal using digital technologies and can reduce the volume of solid waste per capita by 10% to 20%. Businesses and local authorities are also increasingly deploying sensors and analytics to help manage waste, especially in urban areas, and these tools can be operated more efficiently when connected using 5Gwhich is expected to contribute around US 82 $bn by 2030. Another way is via reduced water leakage. By applying new technologies that incorporate 5G, utilities will be able to manage water resources more efficiently. For example, the deployment of sensors and analytics on water networks has been shown to cut water loss by up to 25%, and 5G will expand the potential for such gains which is expected to contribute around US$ 39bn by 2030.
The Healthcare sector is expected to contribute US $530bn with the help of 5G. Medical services will become much more efficient, due to the ready availability of digital health records anytime and anywhere. Remote health monitoring may also help in increasing the reach of diagnostic services. Telemedicine will see a massive boost as video calls will become much smoother. The rapid rise of telemedicine during the COVID-19 pandemic provides a glimpse of the future of healthcare. 5G will improve efficiency and productivity in hospitals through advances such as 5G-enabled tracking of medical devices and patient beds and the application of AI to 5G sensor data to trigger actions automatically and accelerate patient handovers. Precision medicine uses a patient’s individual specificities, including genetics, to identify tailored healthcare steps. By applying AI to a range of medical datasets, recommendations can be customised to individual patients. IoT devices can be equipped with 5G to provide the speed and accessibility required. Through 5G, surgeons can operate on a patient via a robotic intermediary, despite potentially being many miles away. Financially restricted patients in rural areas could then be given access to specialist surgery not available at nearby hospitals. VR surgical training tools can be used to train surgeons, allowing them to keep up to date with recent developments in their practice. They can also help train the next generation of surgeons and doctors by connecting them to remote procedures, enabling them to save lives when their turn comes.
Education sector is expected to grow by a massive number since with the help of 5G, access to online study material would be quite easy even for those without Wi-Fi and quicker access to E-books for study. While the pandemic-induced lockdowns showed how essential and effective remote learning and online classrooms can be when needed, 5G connectivity can lead to even easier access to world-class courses from anywhere. The low latency of 5G will enable the inclusion of education in remote areas of India, where children will be able to access good quality education at home without any network lag between them and their favourite tutor. Also, 5G will make it possible to use new age technologies like AR and VR for more immersive learning in schools and colleges.
Lifestyle and Fashion industry is expected to grow with the help of various online apparel platforms which will be used better using 5G. This 5G network will enable a smoother access to the much-talked-about metaverse via AR/VR devices. Downloading and data sharing speeds will increase. For online gamers, low latency will result in better communications while playing and an overall smoother experience. When online or cloud gaming is delivered over 5G, the gaming hardware doesn’t require as much processing power, and processing can happen closer to the user. Combined with 5G’s higher speed and ultra-low latency, this edge computing concept means 5G will usher in a new era of ever more immersive gaming experiences that were not possible with 4G. OTT content streaming will also increase thanks to better, faster access on the move and to 5G’s greater ability to support VR and AR experiences and simultaneous high-definition video streaming. And in the fast-growing e-sports sector, 5G’s ability to run multiple virtual connections over one network—technically termed ‘network slicing’ opens the way for providers to offer experiences such as personalised 3D augmentation, instant replays and 360-degree in-game views on mobile devices which is expected to contribute around US$ 33bn by 2030.
The Financial Markets are expected to contribute a miniscule US $85bn with help of 5G. The advent of 5G technology will lead to new job openings in network operations, maintenance, and other such sectors. Web3, metaverse, and online gaming industries are expected to see exponential growth. Also, multiple new startups are expected to crop up to focus on the emerging 5G technologies, leading to even more job options. The pandemic has had profound knock-on effects on the financial-services industry, including accelerating the migration to digital channels and interactions by both retail and institutional customers. Combined with the advent of 5G and improved telepresence, this rapid digital shift creates opportunities for organisations to redesign their customer strategy and journey around increasingly meaningful virtual experiences, which, in turn, enables them to reduce or eliminate costly physical channels such as bank branch networks. Banking is not the only financial-services sector that will benefit from 5G. For example, the huge bandwidth and mass connectivity of 5G will support the delivery of AI-powered ‘robo-advice’ to a wide array of devices. This will provide an enhanced channel to customers not only for banks but also insurance companies and investment advisers. The use of 5G-enabled drones to inspect and monitor insured properties could improve and streamline claims management and help reduce fraud. Moreover, previous location accuracy was not refined enough to be used in insurance-based claims to determine fault. But 5G will improve the precision of mobile location by one or two orders of magnitude, depending on specific implementations enabling location accuracy that could be leveraged to determine liability in auto and other related claims. Banks will be able to deploy highly sophisticated, 5G-enabled AI advisers in branches that can converse with customers and help them with financial transactions. At the same time, smartphone data and the growing use of mobile technologies will make it easier to push marketing or advisory content to customers at specific moments of need which is expected to contribute around US$ 55bn by 2030.
For financial-services providers, 5G will help to facilitate advances in security, such as using facial recognition to verify customers’ identity when they use ATMs and other devices. Such innovations will enable consumers to access their accounts quickly without having to use a card and will help to make transactions more secure, reducing the risk of fraud which is expected to contribute around US$ 30bn by 2030. 5G in banking will bring much-needed financial inclusion to India’s rural and remote populations, for whom access to a physical bank is not possible. With the help of 5G, payments will become simpler and faster, fueling further adoption of digital payments by customers and merchants. The government will be able to improve its governance and give a boost to its digital India initiative, which aims to ensure the government’s services are made available to citizens electronically, making the country digitally empowered in the field of technology.
The Entertainment sector is expected to contribute a major US $254bn with the help of 5G network. Adoption of 5G would help develop real-time marketing and customer relations. As consumer adoption of 5G handsets grows, businesses will increasingly use the technology to capture and enhance consumer interactions, opening up vast new opportunities around sales and customer service. 5G will enable companies to capture and analyse data for customers or visitors in real or near-real time. Combining 5G with powerful analytics capabilities, AI and marketing automation will allow campaigns to be constantly optimised and tweaked. Consider a shopping mall: retailers will know which consumers have walked in and be able to push personalised ads or offers to their mobile devices. And when a repeat customer enters the store, retailers will be able to improve the shopping experience by guiding that customer to his or her favourite items and even adjusting the pricing to encourage purchase. Augmented reality (AR) over 5G will also improve the experience by enabling shoppers to see themselves in a garment without entering a fitting room which is expected to contribute a massive US$ 221bn by 2030.
To predict the macroeconomic impact of 5G technology on GDP, we assume that the transition from existing network technologies in India from 4G to 5G will deliver an economic impact of a similar magnitude to that delivered by previous technology transitions. A recent econometric study based on the most comprehensive dataset used to date and covering the rollouts of 2G, 3G and 4G globally, found that, on average, a 10% increase in mobile adoption increased GDP by 1%. Moreover, it found that the economic impact of mobile adoption increases by approximately 15% when connections are upgraded from 2G to 3G; and by approximately 15% when connections transition from 3G to 4G. The assumption underpinning the overall 5G benefit is that the transition to 5G in India will deliver macroeconomic impacts on GDP of a similar magnitude to those delivered by the transition from 3G to 4G.
The benefit at the country level is calculated as a function of the 5G penetration rate which we can measure using the statistical formula:-
Total Benefitit= GDPit * (αit – αit-1) * β
t = time i = country α = 5G penetration rate β = 5G productivity impact
On October 1st, 2022, the 5G network was launched giving a fresh start to quick and easy mobile data access to a plethora of people at cheaper rates. Now, we all know that 5G will bring notably faster Internet speeds than the current-generation 4G or earlier iterations. However, there are way bigger impacts that added bandwidth will bring to the table including much-needed enhancements in sectors such as education, healthcare, and of course, new job openings. The 5G era is here, introducing the next generation of smart business applications just as organisations plan how to emerge stronger in the post pandemic world. The potential for impact across industries is enormous, but to realise these gains, companies will need a strategic approach, one underpinned by a clear view of the use cases that will deliver the greatest value over time. For policy-makers and governments, the key is to regard 5G as fundamental societal infrastructure: a platform that will provide ubiquitous, superfast broadband and influence the competitiveness of nations’ economies along with their ability to develop their own sunrise industries and technologies.
References:
Aulakh, G. (2022, September 9). 5G to benefit Indian economy by ₹36.4 trillion: GSMA. Mint. Retrieved October 22, 2022, from https://www.livemint.com/industry/telecom/5g-to-benefit-indian-economy-by-rs-36-4-trillion-gsma-11662726131943.html
5G Technology Impact & Benefits. (2022, August 8). PwC India. Retrieved October 22, 2022, from https://www.pwc.in/consulting/technology/emerging-tech/5g-technology-a-primer.html
Karunakar, R. (2022, September 14). 5G’s Billion Dollar Impact On India’s Economy: 5 Points. NDTV.com. Retrieved October 22, 2022, from https://www.ndtv.com/business/5gs-billion-dollar-impact-on-indias-economy-5-points-3342411
Rastogi, K. (2022, August 12). Role of 5G in the Digital Economy and How It Is Impacting the Industry. STL. Retrieved October 22, 2022, from https://www.stl.tech/blog/role-of-5g-in-the-digital-economy-and-how-it-is-impacting-the-industry/
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