As the roll-out of the next-generation infrastructure gathers pace across the world, and as Covid-19 accelerates medium and long-term digital investment and value creation, research from Nokia and Nokia Bell Labs has revealed that 5G-enabled industries have the potential to add $8tn to global GDP by 2030.
The 5G Business readiness report was conducted by Sapio on behalf of Nokia and surveyed 1,628 technology purchasing decision makers in eight markets and across six industry sectors in July and August 2020 looking to reveal 5G adoption among businesses around the world, providing a cross-sector view of the path to full 5G deployment.
The markets were Australia (203), Finland (200), Germany (203), Japan (203), Saudi Arabia (202), South Korea (200), the UK (207) and the US (210). Markets covered include energy and utilities (208 responses), mining (119), manufacturing (455), public sector (271), healthcare (445), and transportation (130). Respondents from companies of less than 250 employees were only permitted for energy and utilities and mining companies.
The clear finding of the report said Nokia was an underlining of the potential for 5G to drive sustainable economic growth and define the next decade of innovation. And despite the damage the Covid-19 pandemic has wreaked across industries across the world since March, the report also showed the pandemic will likely further increase the value creation potential of 5G in the medium and long-term by accelerating digitisation, particularly among the least digitally advanced industries.
There was 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.
So-called 5G mature companies were also found to be growing considerably faster than their peers, just under half (49%) of companies in the expansion phase of 5G adoption and 37% of those in implementation phase – representing the two most advanced stages of 5G maturity – achieved rapid growth last year, compared with those firms in the planning (20%), discovery (11%) and passive phases (5%).
These findings show, said Nokia, that the companies who are most 5G mature, and therefore likely also the most advanced in their overall digital transformation, were showing the highest impact in business performance.
Trials and pilots
While many firms were at the implementation stage, for most this still meant trials, pilots or early stage deployments such as 5G mobile phones or limited 5G connectivity for fleet services or rural locations. Nokia said that the report showed that such firms have yet to realise the true breadth, depth and potential of 5G. On average, while the importance of 5G adoption was seen as being well understood, a significant investment gap remains.
As many as 86% of decision makers said they have some kind of strategy for 5G, and over a third feared being outpaced by the competition should they not invest in 5G in the next three years. However, only 15% are currently investing in its implementation, and over a quarter (29%) of businesses are not planning any 5G investment in the next five years.
Moreover, despite the economic challenges of Covid-19, the report suggested that a global boom in 5G investment will see 72% of large companies invest in 5G over the next five years.
The report forecast a rapid uptick in investment over the next three years as enterprises sought to expedite digitisation. A third of companies across all regions fear being outpaced by the competition should they not invest in 5G in the next three years.
Looking at regional variations, the report found that in eight economies – Australia, Germany, Finland, Japan, Saudi Arabia, South Korea, the UK and the US – at least half of companies were at the midway level on 5G readiness, between initial planning, trials and deployment. This compared with just the 7% that are classed as 5G mature.
But significant geographic variations exist; while 13% of organisations in Saudi Arabia and 12% in the UA rated as 5G mature, fewer than one in 20 were classed as such in Germany (3%), Finland (2%) and the UK (4%). Yet despite the clear advantages from 5G deployment, the 5G Business readiness report also noted that the gap between enterprise awareness of 5G’s benefits and current levels of adoption suggested there were notable barriers to implementation.
Indeed, it showed that there were as many as five: ecosystem availability; education and understanding; awareness; cost and complexity; and security. In a call to action, Nokia said that here were key catalysts for change in order to bring about improved understanding, confidence and ultimately adoption of 5G. These are: improved regulation, collaboration and willingness to innovate.
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First, a third of technology buyers said that government investment in infrastructure or subsidies to drive down costs would encourage them to invest more in 5G.
Enterprises note that they would not will not adopt 5G unless the supply from network operators was presented and priced appropriately. Furthermore, Nokia said that the lack of understanding that exists within some businesses around 5G must be directly addressed. It argued that companies and consumers alike needed more information about the technology and how it can both improve operations and solve real world problems, ranging from enterprise use cases to telehealth to green technology.
Finally, Nokia advised firms who were gaining a better understanding of 5G that they must move boldly to overhaul their operations to accommodate it. For example, this could mean exploring how they could use 5G to streamline and more effectively monitor their mobile workforce, fleet or supply chain.