What you need to know about 5G


(Mika Baumeister, Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Derek O’Halloran, Head of Shaping the Future of Digital Economy and New Value Creation, World Economic Forum

5G, the fifth generation of mobile communications that enables global connectivity, is predicted to contribute $13.2 trillion to the global economy by 2035.

To date, there are 50 commercial 5G network deployments in 27 countries. An additional 328 operators across 109 countries have said they are investing in 5G.

How is 5G different?

5G is more than just an upgrade for faster data networks. 5G is a major change in how the world is connected. From the outset, 5G was designed for massive, intelligent connectivity of everything at scale.

The most impactful feature of 5G is its low latency. Latency refers to the delay between an instruction being given and executed. 4G has a latency of about 50ms; 5G will reduce this to less than 5ms in three years and less than 1ms in four years. For comparison, the human brain takes about 10ms to process an image.

Low latency enables real-time remote control at scale and across distances. Even highly delicate operations such as operating drones around sensitive coral or remote surgery become possible.


Real-time insights will mean industry can react far quicker to change

The internet businesses that we have seen emerge over recent years, including e-commerce and social media, were enabled by the features of 3G and 4G. These businesses unleashed a wave of innovation across consumer industries including media and retail.

For 5G, the impact on our day-to-day lives will be no less dramatic. But, the disruptive effects across industries will be felt much more broadly, with one-third of possible use cases in the manufacturing sector.

For example, 5G is expected to support autonomous fleets, remote-vehicle control, driver-health monitoring and smart-traffic control.

The use of ‘digital twins,’ – building a digital mirror of a physical object that can be used to predict performance, as well as augmented reality, drones and widespread real-time distributed monitoring systems – will transform industrial processes and the management of cities. Consumer-facing sectors will also benefit, with opportunities in real-time gaming and virtual reality.

The real-time and detailed intelligence that will be enabled by ever-present sensors is expected to have significant environmental and social benefits. Such sensors will enable the circular economy and lead to improved traceability of materials. It will even advance our understanding of complex natural weather and related ecosystems.

Forecast number of 5G connections worldwide by region from 2021 to 2025 (in millions)
Forecast number of 5G connections worldwide by region from 2021 to 2025 (in millions)
Image: Statista

Don’t expect immediate change to your apps

The roll-out of 5G is expected to occur in two waves. In the first wave, we will see consumer deployments of 5G, together with 5G phones. In November 2019, China’s big three carriers launched their 5G offerings to the public.

In the immediate term, however, consumers may not see much difference, as most current apps are not designed to take advantage of 5G capabilities. The first-wave of deployments across industry are also based on relatively local, operational efficiency gains.

However, most expect that it will take another two to three years for the second wave of 5G applications, which will be truly transformational across value chains.

Update businesses and tech to incorporate 5G

There are several challenges in this transformation to 5G, including technical and regulatory questions that businesses and government must address. But the biggest challenge is to develop the business and operating models to succeed in a world of ever-present intelligence.

The central issue is collaboration. About 70% of new value created through digitalisation over the next decade will be based on platform-enabled, ecosystem-based business models. This means that businesses, which are used to operating alone in a fairly homogenous industry market, now need to adopt a partnership-first model, often collaborating with companies from other industries, as well as a broader and richer set of SMEs, civil agencies and government.

The companies that succeed will be those that can develop diverse networks and ecosystems and can shift their cultures to one of agile innovation. With 5G, they can enable the delivery of industrial ecosystems that are safer, cleaner, greener and deliver sustainable value for all.

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