A new report, “5G action plan for Europe”, assessing the costs and benefits of new 5G use cases shows that when we leverage the technology´s full future capabilities, the economic benefits are greater than we may have imagined, writes, ARUN BANSAL.
Recovery from the COVID-19 pandemic is an opportunity to build a better future. Look no further than our own Network Heroes at Ericsson. Now, European decision makers need to create a more resilient, inclusive, and sustainable Europe by accelerating digital transitions with a greener mindset. Only then can we take advantages of the economic benefits that 5G will bring.
Looking beyond our current goals
When looking at the 5G landscape, the “5G action plan for Europe” report by Analysys Mason found that full 5G networks can support a wide range of innovations across different market and industrial sectors. That doesn’t just mean factory floors, but transforming utilities, the arts, healthcare, and education too. This, we knew already, but what’s interesting here is that the report looks at what happens once the current 5G targets are achieved, and doesn’t focus on 5G for consumers. Instead, it looks at 5G-enabled digitization across a range of uses cases, such as smart factories, mining, and healthcare and hospitals. Collectively, they can be considered as an overall ‘open innovation platform’ and are grouped into key clusters, which include Smart Production and Logistics, Smart Rural, Smart Urban, and Smart Public Services… In doing so, it helps to align conclusions with different European policy themes and translate results easier.
So, what’s the end result when we look at these clusters specifically? When taking into account the 5G landscape, the study found that full 5G networks can support a wide range of possible innovations in different market and industrial sectors.
In fact, 5G networks in Europe can deliver around EUR 210 billion(US$248.88billion) in benefits at a cost of in the region of EUR 46 billion (which equates to a cost–benefit ratio (CBR) of 4.5 benefit to cost).
The report’s findings show that Smart Production and Logistics and Smart Rural clusters have the largest net benefit (benefit minus cost), of around EUR 70 billion and EUR 55 billion respectively.
Use case benefits
The huge potential for 5G to enhance services and create new opportunities is clear to see in the report. In the Smart Production and Logistics area, increased productivity across environments enabled by 5G leads to the gross value add distribution for Smart Production estimated at €90 billion.
It’s not surprising that the GDP benefit is at its highest in smart production. To get maximum benefit, European technology leaders looking to adopt smart manufacturing will need wireless connectivity to stay flexible and stay competitive. And as local operations depend highly on global connectivity, cost-efficient IoT connectivity management with be vital for enterprises of all sizes. For people and businesses in rural and suburban areas, 5G-based Fixed Wireless Access (FWA) connectivity can help to sustain rural living and aid working remotely. This is because FWA enables high-speed broadband connectivity in areas unable to be reached by full-fiber networks. With the gross value add distribution for Smart Rural estimated at €73 billion, it’s crucial to create partnerships between governments and the mobile industry to ensure consistent 5G mobile coverage across rural locations. For smart agriculture, benefits enabled by 5G include lower carbon farming, reduced waste, less use of products (such as, fertilizer), and lowering land requirements for livestock. Take Ericsson’s collaboration with IntraGrain as a great example. Farmers everywhere were enabled with continuous monitoring of their grain silos to ensure optimal conditions for storage using Ericsson’s IoT platform.
What does Europe do now?
5G is fundamental to European economic recovery. This is an opportunity Europe cannot afford to miss. To catch up with rest of the world and to make this Europe´s Digital Decade, European decision makers need to deliver a more ambitious 5G deployment and adoption targets, and a policy reset to match Europe’s needs. To ensure these benefits outlined in the report are realized, a new holistic policy approach or ‘digital deal’ needs to align public and private sector objectives so that we can achieve digital and green transformations just in reach.
At Ericsson, we are committed to contributing to a greener, digital and more inclusive Europe. We will collaborate with policy makers across the continent about how Europe can quickly realize 5G’s full potential.