5G to contribute over $7.5tn to global GDP by 2030
By 2030, 5G-related initiatives will contribute over $7.5 trillion to the global gross domestic product (GDP).
This is according to Dimitris Mavrakis, research director of ABI Research, highlighting the impact of 5G technologies on the global economy, businesses and consumers across the globe.
Mavrakis was speaking at the Huawei 5G+, Better World Summit, where various operators and industry partners shared their view on how 5G applications can drive significant business and industry efficiency.
He noted that low latency, high-speed 5G connectivity has opened infinite opportunities for businesses, resulting in productivity gains and operational efficiency, boosting economic growth by over $7.5 trillion in the next decade – compared to the $5.1 trillion 4G contributed in 2019.
While 5G will drive future businesses across all sectors worldwide, Mavrakis said it is likely to be most beneficial to the commercial sector.
“We expect that 5G will transform businesses in the same way 4G transformed consumers. However, it could take several years for the manufacturing world to adopt the technology.”
With some governments aiming to establish themselves as global leaders in trialling 5G projects, Mavrakis highlighted government’s role in creating opportunities through 5G, such as in the provisioning of free 5G spectrum and the reduction in taxation of carriers.
Governments, he added, could provide opportunities for 5G to flourish within their countries by prioritising efficient usage of public and private digital infrastructure and establishing a national approach to building skills in 5G.
According to a report by Orange Business Services, 5G is set to have a profound effect on countries' economic performance and GDP. In 2016, mobile technologies and services generated 4.4% of GDP globally, equating to about $3.3 trillion in economic value. In 2020, this has been estimated to grow to over $4.2 trillion, or 4.9% of the global GDP.
Advisory firm PwC forecasts that fast, intelligent Internet connectivity enabled by 5G technology is expected to create approximately $3.6 trillion in economic output and 22.3 million jobs by 2035 in the global 5G value chain alone. This will translate into global economic value across industries of $13.2 trillion, notes PwC. The manufacturing, information and communications, wholesale and retail, public services and construction sectors will be those expected to have the highest reliance on 5G technologies.
Creating 5G ecosystem
Also speaking at the event, Cai Mengbo, CMO of Huawei Carrier BG, pointed out that while 5G industrial modules have been widely commercialised, in order for businesses to see economic gains, more commercial 5G devices are required from different industries to ensure the prosperity of the 5G ecosystem and to lower the costs for industries to adopt 5G.
"5G development has entered a new phase. With over 80 5G networks commercially available worldwide, determining how to leverage 5G to create more value is currently a topic of great interest within the industry. Currently, 5G for business is still more of a branding concept, and more solid work needs to be done,” noted Mengbo.
To build a positive business cycle, 5G initiatives should focus on four elements: technology, ecosystem, standards and business model, he asserted.
“In terms of technology readiness, we must continuously innovate 5G technology and products to address the pain points of industries. 5G services for business development from zero to one requires innovation, but further growth beyond one requires unified industry standards. Industries should take the lead to set 5G industry standards that allow 5G to be rapidly applied to industries.”
Favourable regulatory policies to develop digital infrastructure can play an important role in driving investments to fuel the growth, he said.
“To achieve shared commercial success, organisations must explore business models of 5G services focused on enabling business to benefit all industry partners and help them grow together,” concluded Mengbo.