Davos 2020: Innovation in the 5G-enabled digital economy – Ericsson
5G will be the foundation for innovation in the Fourth Industrial Revolution. That is a big statement and I believe in it wholeheartedly. Let’s look at three ways we can all change the world with 5G, plus what it will take to fulfill its potential.
Figure 1: Breaking the curve of product energy performance with 5G
Figure 2: Share and growth rate for global total 5G-enabled B2B opportunity for service providers
5G as a platform for innovation
But while we know that 5G will change the world, we still do not know how. 5G will be a platform for innovation, and we cannot predict what the world’s innovators will do with it.
It was the same situation with 4G. Innovation came on top of the network. No one knew that streaming, ride-hailing and social media would be the killer apps for 4G.
And the frontrunners in 4G – largely in the US and China – became the big winners of the “app economy.” The same dynamic will play out with 5G but on a massive and industrial scale.
Creating the conditions for 5G success
5G will be a mandatory baseline to compete on the world stage. With this in mind, regulators must ensure a rapid 5G buildout. However, we already see steep inequalities emerging from the rollout of 5G, and countries are at risk of being left behind.
Networks are as important to countries as roads and electric grids and airports. And governments can support their development with a range of policies, ranging from funding 5G pilots to spectrum auction mechanisms.
Governments and regulators must align spectrum pricing with policy goals and license as much spectrum as possible as quickly as possible. This means factoring in the long-term value of a strong network instead of upfront license fees.
We need industry transformation
There must also be structural changes to our industry, if all service providers are going to benefit from 5G. Particularly when we look at 5G in Europe. Here, many barely return cost of capital, making it very difficult to justify investments in new technology.
There are two changes that will make service providers more competitive. The first is consolidation. Again, particularly in Europe, there are simply too many service providers in the same markets, especially compared with countries like the US. Market fragmentation restricts investment.
The second is pricing. In most markets, mobile broadband costs less per month than a few cups of coffee. This is also not a feasible long-term business model. Ultimately many countries risk deepening social and economic inequality and potentially falling years behind 5G superpowers such as Korea, the US and China.
5G will change lives
The promise of 5G and Industry 4.0 includes creating jobs, improving and expanding access to health care. It will also help to reduce carbon emissions, improve education and raise the quality of life in cities around the world.
With countries all over the world already deploying 5G services, this is an important window for alignment. We cannot afford to let this window close and slow the societal and economic benefits of 5G on a global scale.
We must work together with the ambition to aim for a more sustainable world. We’re in. Are you?
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As a lead partner behind the Exponential Roadmap, we believe that digitalization and 5G will be fundamental to halving greenhouse gas emissions every decade. To learn more, visit the Exponential Roadmap.
Visit the Ericsson sustainability pages to learn about the latest use cases where we’re deploying technology for good.
Learn more about the opportunities of 5G in our 5G for business: a 2030 market compass.
This article was recently published on the World Economic Forum.