5G set to add $8trn to global GDP by 2030
5G-enabled industries have the potential to deliver $8trn in value to the global economy by 2030 according to new research from Nokia and Nokia Bell Labs. The 5G Business Readiness Report surveys 5G adoption among businesses around the world, providing a cross-sector view of the path to full 5G deployment.
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 five 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 three years.
Nokia’s 5G Business Readiness Model reveals that across eight 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%).
While many organizations are at the Implementation stage, for most this still means trials, pilots or early stage deployments such as 5G mobile phones or limited 5G connectivity for fleet services or rural locations. Few have yet to realize the true breadth, depth and potential of 5G.
On average, whilst the importance of 5G adoption is well understood, a significant investment gap remains. 86% of decision makers said they have some kind of strategy for 5G, and over a third fear being outpaced by the competition should they not invest in 5G in the next 3 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 5 years.
Gabriela Styf Sjöman, Chief Strategy Officer at Nokia, said: “As organisations 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 digitalising global economy. Beyond investment in the technology itself, this will require digitalizing operations, processes and ways of working to capture the full potential of 5G.
“5G adoption is categorically shown to fuel business success. Organizations that have integrated 5G stand to benefit from advantages that go way beyond faster, more efficient and reliable network services. As 5G enables businesses to transform, it will also accelerate wider technological and economic trends, with unimaginable possibilities for global economies and societies. The cities, hospitals and factories of the future depend on 5G and the unparalleled ability it offers to move, process and store vast volumes of data. Moreover, the biggest challenges we face as a society – from climate change to the pandemic – can be better tackled through at-scale use of the data and technologies that 5G will unleash.”