The Market Opportunity for 5G Wireless Innovation — Insights from Alacrity Global

5G will touch virtually every business sector in some way

5G is the next generation of wireless networking technology. It has been gaining market momentum for some time now, and infrastructure build-outs are continuing across the globe. According to GSMA, the global association that represents mobile network operators, 5G networks will deliver between 10 and 100× higher data rates, at signal response times up to 10× faster, compared to 4G networks. These capabilities will enable a range of other technologies, such as big data and cloud services, that in turn will generate new and transformative applications and use cases. 5G will unlock the potential of Artificial intelligence (AI), Edge Computing and the Internet of Things (IoT). The benefits will be realized across industries, for example in the form of enhanced productivity and operational efficiency, cost savings and improved worker safety.

Economic Impacts

The impacts of this innovation will also be felt across most economies. Per the GSMA report above, over the next twenty years, the effect of 5G on the Canadian economy will be an additional USD$150B of value-add to the national GDP. In the U.S., according to Accenture, 5G will drive up to USD$2.7T in additional gross output (sales) and add up to USD$1.5T to the GDP by 2025. That is larger than the annual GDP of 94% of the world economies! And in terms of world economies, according to PWC, 5G is expected to create more than USD$370.0B of economic activity by 2025, and surpass USD$1.3T by the end of the decade.

Estimates such as these have made investment in 5G enabling infrastructure and related innovation a hot topic for all levels of international Governments — particularly those that have an existing or emerging technology sector in their economic mix. And the timeline for the arrival of the ‘5G Era’ has accelerated over the past 18 months, due to the pandemic-driven demands for greater digital transformation and automation, work-from-anywhere services, zero-touch experiences and more. In the U.S., Boston Consulting Group (BCG) is already predicting a near-term opportunity of more than three million direct new jobs across multiple business sectors thanks to 5G.

Industry Impacts

As noted, 5G will touch virtually every business sector in some way. Again according to Accenture, over the next decade the advanced new applications from 5G will be highly relevant to sectors including Healthcare, Education, Public Administration, Finance and Insurance, Retail, Business and Professional services, Transportation, Construction, Hospitality, Utilities, Agriculture, Mining, Defence and more. 5G is also the underlying platform for Industry 4.0, or the Fourth Industrial Revolution — the ongoing automation of traditional manufacturing and industrial practices, using modern smart technologies. In an attempt to quantify some of these industry impacts, Accenture looked at some of the industries that, as a result of their likelihood to produce a faster ROI, can be expected to be a focus area for 5G innovation and deployment over the next four to five years. The graph below shows the projected value of each of these markets over that timeframe.

Within these industries, examples of the use-cases and technology applications that should be in demand include smart infrastructure and building management systems, autonomous vehicles of many sorts, IoT connectivity and management applications, consumer AR/VR devices, realtime banking services, advanced healthcare solutions, cleaner/greener energy and utility management tools, and of course, ever more advanced security tools. These all represent areas for investors to consider as they evaluate ways for their own participation in this burgeoning set of opportunities.

Final Thoughts

No doubt challenges remain before 5G will deliver on the full potential outlined here. The costs of new infrastructure, the availability of the necessary spectrum, the robustness of the supporting security technologies, the evolution of underlying regulations – none of these are trivial. But the potential is undeniable, and the race is on. Some of the initial applications are available now. Others will merely get a lot better when 5G is fully deployed. Others still are further out on the horizon. However, businesses, industry, governments and universities around the world are partnering now to capitalize on the opportunities and make the benefits their own over the next decade. Wesley Clover and the Alacrity Global programs are already fully committed …