How 5G could boost the post-COVID economy

It’s said the arrival of 5G will pow­er the fourth indus­tri­al rev­o­lu­tion. The fifth-gen­er­a­tion mobile tech­nol­o­gy promis­es to con­nect greater num­bers of devices with a high-speed, low-laten­cy net­work that enables data trans­mis­sion in real time. As a result it could pave the way for more sophis­ti­cat­ed, pro­duc­tive ways of work­ing.

“It was always going to change the world,” says David Pugh, man­u­fac­tur­ing part­ner­ships lead at Dig­i­tal Cat­a­pult. “There was nev­er any doubt about that.”

So with the glob­al econ­o­my fac­ing a sig­nif­i­cant down­turn due to the coro­n­avirus pan­dem­ic and the UK expe­ri­enc­ing the deep­est reces­sion since records began, could 5G be a dri­ver of eco­nom­ic recov­ery in a post-COVID world?

Economic development created by 5G

5G has the poten­tial to sig­nif­i­cant­ly bol­ster eco­nom­ic growth. Over the next ten years, it could add as much as £158 bil­lion to the UK econ­o­my and lead to the cre­ation of new jobs and busi­ness oppor­tu­ni­ties, accord­ing to a report by Voda­fone. Research by Bar­clays sug­gests 5G could super­charge GDP by up to £15.7 bil­lion a year by 2025.

Unlike 4G, 5G has been designed for enter­prise appli­ca­tions. While 4G rad­i­cal­ly changed the con­sumer space by lead­ing to the devel­op­ment of social net­work­ing sites such as Tik­Tok, Airbnb and Uber, 5G could rev­o­lu­tionise enter­prise and the busi­ness-to-busi­ness side, says Dim­itris Mavrakis, senior research direc­tor at glob­al tech mar­ket advi­so­ry firm ABI Research.

5G speed in towns and cities

An improved net­work would mean there’s no need to search a cov­er­age check­er to see whether an area has inter­net con­nec­tion. Faster 5G speed and bet­ter con­nec­tiv­i­ty could cre­ate eco­nom­ic growth in regions of the UK out­side Lon­don.

“That’s why we see it as a real pos­i­tive,” says Matthew Evans, direc­tor of mar­kets and for­mer chief exec­u­tive of the Broad­band Stake­hold­er Group. “Because it would bring the UK onto a more lev­el foot­ing.”

West Mid­lands 5G (WM5G) was set up to accel­er­ate the eco­nom­ic ben­e­fits of 5G through­out the region. “We want to utilise 5G’s poten­tial to dri­ve eco­nom­ic and social recov­ery by accel­er­at­ing roll­out across the West Mid­lands,” says WM5G’s man­ag­ing direc­tor Robert Franks.

The organ­i­sa­tion aims to improve 5G speed and con­nec­tiv­i­ty, trans­form trans­port infra­struc­ture, improve health­care and accel­er­ate skills devel­op­ment. “We believe it could absolute­ly cre­ate jobs and attract invest­ment,” says Franks.

One of the aims of WM5G is to sup­port inno­va­tion in man­u­fac­tur­ing in the West Mid­lands, as it’s an indus­try that con­tributes sig­nif­i­cant­ly to GDP. “The sector’s been pret­ty hard hit by COVID-19,” says Franks. But with 5G, he believes it’s pos­si­ble to improve pro­duc­tiv­i­ty and effi­cien­cy.

Industries likely to benefit from 5G coverage

5G has the poten­tial to impact almost every indus­try, but man­u­fac­tur­ing is one of the key sec­tors that could ben­e­fit from its roll­out. For exam­ple, a stronger net­work could enable live footage of pack­ages as they are trans­port­ed and flag up any prob­lems in real time, says Pugh at Dig­i­tal Cat­a­pult. “Get­ting data [from oper­at­ing machines] in real time is also real­ly valu­able inside the fac­to­ry,” he says.

Faster speed in real time

Many oth­er indus­tries are expect­ed to ben­e­fit, from util­i­ties and ener­gy, to smart cities and trans­porta­tion. Cre­ative and arts indus­tries could also be giv­en a boost, says Emi­ly Sav­age, cre­ative sec­tor lead of Dig­i­tal Cat­a­pult.

5G cre­ates oppor­tu­ni­ties for cre­ative com­pa­nies to use vir­tu­al real­i­ty to work remote­ly and to reach wider audi­ences. “There’s huge excite­ment about open­ing up the abil­i­ty to pro­duce new remote ser­vices,” says Sav­age.

Thomas Win­sor, cre­ative direc­tor of Real­i­ty Check Pro­duc­tions, says the abil­i­ty to pro­duce 3D aug­ment­ed real­i­ty shows could trans­form the sec­tor. “If you have a the­atre in Lon­don and you want to reach an audi­ence in Japan, it’s very expen­sive to tour,” he says. “But if we had the abil­i­ty to broad­cast to many peo­ple and to reach an inter­na­tion­al audi­ence with a strong inter­net con­nec­tion regard­less of their local wired con­nec­tion, that would be huge.”

Increase human capital

In more gen­er­al terms, this increased appetite for remote con­nec­tiv­i­ty could con­tin­ue to facil­i­tate a new type of work and a more intel­li­gent econ­o­my dri­ven by arti­fi­cial intel­li­gence (AI). “COVID has accel­er­at­ed the appetite for remote work­ing and remote­ness is at the heart of 5G,” says Sav­age.

5G net­works could also cre­ate more jobs and increase human cap­i­tal. “There is a fear that AI will take away jobs, but at the end of the day we think it will cre­ate more jobs,” says Mavrakis at ABI Research. “We expect 5G will improve effi­cien­cy for work­ers and open up oppor­tu­ni­ties, rather than take away jobs.”

5G in the UK and a new way to work

Research from the British Cham­bers of Com­merce, in part­ner­ship with Mobile UK, found that almost 80 per cent of respon­dents expect to either main­tain or increase their lock­down lev­els of mobile-net­work usage over the next 12 months. “We expect the new nor­mal to con­tin­ue,” says Gareth Elliott, head of pol­i­cy and com­mu­ni­ca­tions at Mobile UK. “Soci­ety is chang­ing in the way it works and oper­ates.”

In a post-COVID world, 5G could be a key dri­ver of eco­nom­ic growth and recov­ery across mul­ti­ple indus­tries, but it will not solve all prob­lems. “It will be a com­po­nent of the recov­ery; it will not be the recov­ery itself,” says Mavrakis. “5G is just a piece of the puz­zle. How big a piece depends on the will­ing­ness of the gov­ern­ment to stim­u­late adop­tion and on sec­tors them­selves to adopt.”