What is 5G?
5G is the newest next generation wireless network, however, it goes far beyond being just a faster 4G network.
According to MIT Technology Review, “5G will become the underlying fabric of an entire ecosystem of fully connected sensors and devices, capable of overhauling economic and business policies, and further blurring geographical and cultural borders.” While it has been in the works for many years, technology companies are just beginning to roll out pilot programs. The pilot programs have generated much excitement and anticipation.
Most notably, the 5G network would bring about a 100X increase in speed to the widely used 4G network. On the technical side, 5G networks will provide ultra-low latency and greatly increase the number of connections and throughput.
These developments will not just provide 7-second movie downloads, or augmented reality shopping experiences for consumers. 5G networks will fundamentally alter the businesses landscape in all industry sectors.
In order to be on the forefront of this technological revolution and take advantage of the opportunities limited in scope only by imagination, business leaders should learn about the development and rollout of 5G technology, as well as begin preparing their businesses for 5G implementation.
Read more about how 5G technology was one of the 5 key themes during the Davos Economic Forum here.
Impacts in Every Sector
Ericsson surveyed business leaders about which sectors are anticipated to receive the largest benefit from 5G technology. While the possibilities are endless, a few industries are especially relevant to China-based or international companies.
Manufacturing
Manufacturing is the sector expected to immediately benefit the most from 5G technology.
5G presents a huge opportunity for companies that manufacture their products in China. In such a competitive environment, most manufacturing companies are operating under slimmer and slimmer margins as factory technology becomes more complicated and costlier to maintain. 5G will allow businesses to continue to incorporate new machines at a lower cost.
It is anticipated that 5G will allow companies to streamline operations, cut costs, and increase efficiency. For example, businesses remotely operating factories in mainland China would be able to monitor the factory floor or perform virtual reality inspections from thousands of miles away in real time. Additional 5G manufacturing solutions may include:
- Remote quality inspection and diagnostics
- Large scale deployment of sensor data for maintenance
- End to end inventory management and tracking
- Smart factories
73% of companies surveyed by Ericsson cite first mover advantage as a critical motivator in 5G adoption. Companies that are prepared for 5G have the chance to hit the ground running. Even a few months may mean huge competitive advantages.
Therefore, although these changes may still be a few years in the making, manufacturing companies should be to prepare their workforce and experiment with new technologies take advantage the economic gains.
Financial Services
Another sector predicted to be a beneficiary of the rollout of 5G technology is the finance.
Businesses in the financial sector can incorporate a greater number of customer-facing services. For example, using wearables for mobile payments, or virtual customer service. 5G’s extraordinarily low latency is also expected to revolutionize the stock market with virtually instantaneous trading.
It is predicted that financial sector can benefit from 5G technologies in a variety of ways:
- Mobile payments are already the norm, especially in China. 5G networks would further the use of mobile and wearable financial management
- Enhancement of security measures: upgrading the use of passcodes to multilayered biometrics, reducing the risk from the widespread use of mobile banking
- Data-driven and user-centric insurance based on real time sensor data
- Instant transactions, trading, and tracking
Financial sector business concerns are mainly centered around corporate and customer information security. 5G networks can support more rigorous security measures without interfering with user experience.
As a result, businesses in the financial sector would most likely benefit from a more secure network and greater bandwidth. Although the trend in the financial sector has already been towards digitization, the adoption of the 5G network will likely accelerate this shift.
Therefore, businesses should embrace these changes. They should begin by moving data and computing onto the cloud and start to thinking about how to incorporate 5G capabilities into products or operations.
Retail
China is one of the world’s largest consumer markets. 5G presents a new opportunity to retail companies operating in China by providing a new way to reach customers.
With online shopping and delivery services flourishing, the new wave of 5G network improvements is anticipated to transform the online shopping experience. In fact, Ericsson reported that companies most look forward to embracing virtual reality and augmented reality shopping experiences.
On the internal side, fully autonomous warehouses can optimize inventory management, and analyze buying patterns to anticipate needs. This can be combined with the 5G’s network to support autonomous vehicles, and increase the efficiency of delivery routes. Companies should prepare to delve into a quickly transforming retail landscape.
The Battle for 5G
Countries consider gaining global 5G leadership as a priority because the winner will likely to secure trillions of dollars of economic advantages.
Business Insider Intelligence identifies the United States, South Korea, and China, as the three countries spearheading the 5G revolution. Beijing highlighted its importance in the 13th 5 year plan, with the goal of making it commercial available by next year.
On the other hand, the US is well aware of the advantages to winning the “race for 5G” as it has reaped the economic benefits of being the leader in building the 4G network. It is estimated that 5G will generate around 22 million jobs, $12.3 trillion globally, and boost the winner’s GPD by $500 billion according to an Accenture report.
What Does This Mean for Businesses
There will likely be very real implications of this race on businesses. Companies in the winning country will be able to reap the benefits directly though first access to the technology and indirectly by taking advantage of the boosted economy.
According to Forbes Insights, more than 80% of business executives believe that 5G will be beneficial to their business. 70% of companies expect to be able to use 5G for specific cases by 2021 according to Ericsson. However, only 26% of leaders say they are “extensively preparing” their company for the new technology. In order to be at the forefront of this technological revolution, companies should preemptively prepare for these changes by developing new products, considering multilevel uses for 5G, and training employees.
No matter who wins the race for 5G, its implications are extensive. Companies should be forward-looking and create long term goals with the 5G network in mind.Interested in other business opportunities or want learning more about operating a business in China? Get in touch with our team for a consultation and follow us on social media to receive the latest news.
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