Getting ready for the 5G-economy
The recent coronavirus outbreak and signing of the first-phase U.S.-China trade deal may have temporarily drawn our attention away, but 2020 is the much-anticipated year of 5G. The upgraded telecommunication network is almost 100 times faster than our current 4G system and is said to be commercialized this year. In the current 5G trial testing in cities such as Chicago, you can download Marvel’s Iron Man 2 in just 90 seconds if you have a 5G-compatible mobile device (1). However, the impacts of 5G technology go beyond the capacity of your phone. Economically speaking, according to IHS Markit, the forecasted annual GDP contribution of 5G will total $2.1 trillion which is equivalent to the current GDP of Italy, the eighth largest economy in the world (2).
To enable the transition and adoption from 4G to 5G, a global infrastructure investment of $2.7 trillion will be spent on building more cell network towers in cities and installing new antenna boxes (MMIO /”5G box”) inside and outside buildings by the end of 2020 (3). The current economy hasn’t started to employ devices and equipment such as semiconductors and 5G radio access equipment that are compatible with 5G reception. Across the 15-year adoption period, collective investment in R&D and CAPEX among the 5G equipment supply chain can contribute $235 billion annually, promising a source of sustainable growth in the anticipated economic downturn.
Besides the 5G mobile network and value chain, the most immediate use of 5G is the thriving Internet of Things (IoT) industry. Just as we begin to utilize the technology of Alexa and Google in our homes, the broader applications of IOTs allow for various industries to increase efficiency and productivity across their supply chains. The high bandwidth and low latency (how fast the device sends and receives a signal from the network) of 5G--for example, can transform the capital-intensive agriculture industry through monitoring the moisture or chemical levels in the soil and adjust the system accordingly. The data on the soil can then be further analyzed to improve the harvest of the crop, increasing transparency for producers and consumers. The manufacturing industry can also benefit from the development of 5G that enables remote monitoring and equipment maintenance in factories, preventing production loss and accident risks.
The limit of 5G application is only hinged on existing business operations, but as the limit of current 4G is lifted, more innovative business models will emerge along with the development of artificial intelligence and virtual reality. The skyrocketing stock price for Tesla perhaps also implies the race to the autonomous vehicle, which heavily relies on the maturing of 5G technology. The ultra-low latency and high reliability of 5G ensure smooth communication between vehicles and road facilities, safeguarding the auto-driver experience and allows limitless opportunities for the automotive industry.
Regardless of the importance of 5G development in our data-driven economy, this advancement comes with its limitations. The low coverage of the high-frequency 5G signals means we have to build signal towers and implement antennas almost everywhere, which can create more detrimental impacts on the environment. It is estimated that the infrastructure will consume three times the energy that the current 4G network requires according to Yan Binfeng, director of the technical committee of China Unicom Research Institute (4).
As we ring in the New Year and mark the beginning of 5G, the societal and economic benefits will soon be recognized by all the households and firms in the global economy. That being said, the social costs must be recognized and discussed to fully capitalize on the new technology’s potential.
Sources:
(1)https://www.theverge.com/2019/5/16/18628080/verizon-5g-network-gigabit-1gbps-download-speeds
(2)https://www.qualcomm.com/media/documents/files/ihs-5g-economic-impact-study-2019.pdf
(3)https://disruptive.asia/5g-infrastructure-cost-2-7-trillion/
(4)https://www.sdxcentral.com/5g/definitions/what-is-environmental-impact-of-5g/
(5)https://www.digitaltrends.com/mobile/what-is-5g/
(6)https://www.nytimes.com/2020/01/08/technology/personaltech/5g-mobile-network.html
