The 5G-enabled industries have the potential to deliver $8 trillion to the global economy by 2030, according to new research from Nokia and Nokia Bell Labs.
This landmark report from Nokia underlines the potential for 5G to drive sustainable economic growth and define the next decade of innovation. The COVID-19 pandemic is forecast to further increase the value creation potential of 5G in the medium and long-term by accelerating digitization, particularly among the least digitally advanced industries.
The report also highlights a clear correlation between 5G deployment and business performance. Companies at an advanced level of 5G adoption were the only group to experience a net increase in productivity (+10%) following COVID-19, and the only group able to maintain or increase customer engagement during the pandemic.
5G mature companies are also growing considerably faster than their peers: 49% of companies in the expansion phase and 37% in the implementation phase – representing the two most advanced stages of 5G maturity – achieved rapid growth last year, compared with 20% in the planning, 11% in discovery and 5% in passive phases. These findings show that the companies who are most 5G mature, and therefore likely also the most advanced in their overall digital transformation, are showing the highest impact in business performance.
Despite the economic challenges of COVID-19, a global boom in 5G investment will see 72% of large companies invest in 5G over the next 5 years. The report forecasts a rapid uptick in investment over the next three years as enterprises seek to expedite digitalization. A third of companies across all regions fear being outpaced by the competition should they not invest in 5G within the next 3 years.
Nokia’s 5G Business Readiness Model reveals that across 8 economies – Australia, Germany, Finland, Japan, Saudi Arabia, South Korea, the UK and the US – 50% of companies are at the midway level on 5G readiness, between initial planning, trials and deployment, compared to just 7% that are classed as 5G mature.
But significant geographic variations exist; while 13% of organizations in Saudi Arabia and 12% in the United States rated as 5G mature, fewer than one in 20 were classed as such in Germany (3%), Finland (2%) and the UK (4%).
Gabriela Styf Sjöman, Chief Strategy Officer at Nokia, said: “As organizations across the world move faster towards deployment of 5G enabled technologies, those who wish to be the first to leverage its potential cannot afford to lose more time. To capture the tremendous opportunities of 5G, organizations must start or intensify their planning now and accelerate business model innovation to remain competitive in a rapidly digitalizing global economy.
However, the research identified five principal barriers to 5G adoption. Limited availability of key infrastructure outside urban centres was cited by 28% of decision-makers. Decision-makers within their business do not understand 5G, while 14% said they don’t know enough about it themselves. Over a fifth of technology buyers (22%) said that 5G implementation is not a current priority for their business.
Many firms were not confident that their company would be able to implement the necessary technologies. Over a third (34%) said that they are concerned about the security of 5G. Lack of understanding that exists within some businesses around 5G must be directly addressed.