Unprecedented amounts are being spent in the deployment of 5G, the next generation of wireless technology that promises unheard of innovation and economic potential. The rollout of 5G will serve as the foundation for decades of future progress, and countries around the world are on a race to lead the trillion-dollar 5G revolution.
With speeds 100 times faster than current 4G LTE, 5G will revolutionize the way we live and interact with the environment around us. Aside from downloading movies in seconds, 5G will provide flexibility for future technologies and services that are unheard of today. With its wide-reach, the economic benefits of 5G are tremendous for both consumers and companies. A study by IHS Markit has projected that the rollout of 5G could facilitate $12.3 trillion of global economic output and create as much as 22 million jobs. Additionally, history shows us that the economics of 5G should not be underestimated: the United States has spent billions to establish itself as a leader in the global rollout of 4G, resulting in a $100 billion addition to the country’s GDP. With these numbers in mind, governments around the world have been investing heavily to ensure competitiveness in the upcoming 5G revolution.
So what futuristic technologies can 5G enable? For starters, 5G is set to bring connectivity speeds up to 100 times faster than standard 4G. This will enable 4K movies to be downloaded in seconds, seamless VR/AR gaming, and self-driving cars to take the streets. But the changes to our existing network infrastructure will enable large-scale concepts such as the Internet of Things (IoT) and Smart Cities to become a reality. Imagine a future where all aspects of our cities are connected to a central networking system. This would enable fully autonomous vehicles equipped with driving systems that communicate with other vehicles, pedestrians, and surrounding infrastructure. With high network reliability and extremely low latency, 5G would allow sensors to be embedded in everything we interact with, allowing for innovations in healthcare, logistics, and services. Doctors could perform surgery remotely, farmers could monitor every single crop, and it would enable technological innovations yet to be discovered. This would lead to a whole new ecosystem of 5G-enabled devices and generate industries worth billions.
As countries around the world come to terms with the economic benefits of 5G, the race to ensure competitiveness in the global rollout has intensified. For decades, the United States has been the world leader in high tech, leading the charge on revolutionary technologies such as personal computers, smartphones, or even the internet itself. But as other countries continue to invest in technology, the rollout of 5G could be a turning point in the global tech space. Although the US holds a role at the forefront of high tech, studies have shown that other countries have surpassed the US on 5G readiness and expansion. According to the CITA, both China and South Korea rank first in 5G readiness, followed by the US and Japan. After missing out on opportunities to capitalize on the 4G transformation, China has pledged over $411 billion USD of investment into 5G-related technologies through 2030. Similarly, South Korea will spend more than $17.6 billion USD on research and development in 2019 alone. Through state investment and subsidization, companies in Asia are able to produce 5G equipment at lower prices, undercutting competitors in the US and Europe. This has allowed both countries to rapidly advance their 5G infrastructure, with South Korea launching the world’s first 5G mobile networks, and China installing more than 350,000 5G towers. In the long-run, 5G is an inevitable progression that will offer technological benefits to consumers, revenues for corporations, and influence for countries around the world.
As 5G technologies have advanced, the vast economic opportunities they can offer have raised the stakes even higher for those involved; numerous companies have engaged in a global campaign of political and economic moves to sway the opinions of corporations and governments in favour of 5G. Hoping to gain an advantageous position in the eventual 5G rollout, several countries have been investing heavily in their domestic telecom equipment providers, with the major players being the United States and China. With American companies like Qualcomm competing with China’s Huawei and Sweden’s Ericsson, the race to dominate the global 5G rollout has intensified greatly as the technology has advanced. Specifically, experts have said that the competition between the United States and China has contributed to ongoing trade tensions and political disputes between the two countries.
In the US, the Committee on Foreign Investment in the United States (CFIUS) has blocked several attempts by foreign companies to purchase american telecom equipment providers, fearing that the sale of such companies could cause the US to lag behind in the global 5G rollout. Recently, CFIUS blocked a $130 billion deal by Singapore-based Broadcom to acquire Qualcomm, one of many deals that have failed after intervention. Similarly, Huawei, the world’s largest telecom equipment provider, has also received considerable scrutiny from the US. In the past few years, the US has led a concentrated lobbying effort across its allied countries to warn about the dangers of Huawei equipment, raising concerns of national security and espionage. So far, the US, Australia, New Zealand, and Japan have all banned Huawei from their future 5G expansions, while countries like Canada, Germany, and the UK are still evaluating the legitimacy of these concerns.
To push back against efforts to restrict Huawei, the Chinese government has used economic incentives to lure in powerful corporations and nations. By pouring billions into R&D-related activities and providing low-interest loans for network infrastructure projects, Huawei has been able to produce 5G equipment at much lower price points than Western competitors, making the financial incentives hard to pass up for major corporations. So far, 211 of the Fortune 500 companies have already chosen Huawei as the partner for their eventual 5G expansion, while governments are weighing the economic benefits against the potential state risks.
Undoubtedly, the race to 5G is far from the finish line. While 5G promises to bring to life new-age concepts and futuristic technologies, there is still a long road ahead before these ideas can become reality. Aside from the trillions of dollars that will be created in economic opportunity, the country that leads the 5G transformation will also establish itself as a global leader in technology. With so many vying for this coveted opportunity, it remains to be seem who will reap the rewards of the 5G revolution.