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business|DIGITALISATION|innovation|services|technology

5G can add $8-trillion to global economy, Nokia asserts

23rd October 2020

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

     

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New research by information and communications technology firm Nokia and Nokia Bell Labs shows that fifth-generation- (5G-) enabled industries have the potential to add $8-trillion to global gross domestic product by 2030.

In addition, the value creation potential of 5G in the medium and long-term by accelerating digitalisation, particularly among the least digitally advanced industries, is also expected to further increase, accelerated by the Covid-19 pandemic.

The 5G Business Readiness Report survey, which underlines the potential for 5G to drive economic growth and define the next decade of innovation, highlights a correlation between 5G deployment and business performance.

The findings of the survey show that the more “5G mature” companies, which are likely the most advanced in their overall digital transformation, are showing the highest impact on business performance.

“5G adoption is categorically shown to fuel business success. Organisations that have integrated 5G stand to benefit from advantages that go way beyond faster, more efficient and reliable network services,” says Nokia chief strategy officer Gabriela Styf Sjöman.

As 5G enables businesses to transform, it will also accelerate wider technological and economic trends.

According to the survey findings, the companies at an advanced level of 5G adoption were the only group to experience a net increase, at 10%, in productivity following the Covid-19 pandemic, and the only group able to maintain or increase customer engagement during the pandemic.

The survey further notes that 5G mature companies are also growing considerably faster than their peers, with 49% and 37% of the companies in the expansion and implementation phases, respectively, achieving rapid growth last year, compared with 20% in the planning, 11% in discovery and 5% in passive phases.

“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,” Styf Sjöman comments.

“To capture the tremendous opportunities of 5G, organisations must start or intensify their planning now and accelerate business model innovation to remain competitive in a rapidly digitalising global economy.”

A global boom in 5G investment is expected, with 72% of the large companies surveyed set to invest in 5G over the next five years, despite the economic challenges of Covid-19.

“The report forecasts a rapid uptick in investment over the next three years as enterprises seek to expedite digitalisation,” Nokia points out.

However, only 15% are currently investing in its implementation, and over a quarter, or 29%, of businesses are not planning any 5G investment in the next five years.

Nokia’s 5G Business Readiness Model reveals 50% of companies across eight economies, namely Australia, Germany, Finland, Japan, Saudi Arabia, South Korea, the UK and the US, are at the midway level on 5G readiness, compared with the 7% that are classed as 5G mature.

However, there are significant variations, as 13% of organisations in Saudi Arabia and 12% in the US are rated as 5G mature, while fewer than one in 20 were classed as such in Germany (3%), Finland (2%) and the UK (4%).

“While many organisations 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 realise the true breadth, depth and potential of 5G.”

Edited by Creamer Media Reporter

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