That there’s disagreement among industry pundits that 5G will ever transform the way we live and do business is an understatement. A 2017 report by IHS Markit, commissioned by Qualcomm Technologies, states that 5G will play a significant role in promoting global economic growth through 2035.For a counterpoint, see our recent blog, “Telcos Need to Fight Economic Stagnation.”

5G is the next-generation network technology that promises faster connections, reduced latency and greater efficiency. The first 5G standard is not expected to materialize until 2018, with commercial standards not expected until 2020 at the earliest. The big difference offered by 5G is speed, of course. Current 3G and 4G networks provide wireless connectivity at up to 3 Mbps and 1 Gbps, respectively. 5G promises 1 to 10 Gbps speed.

The IHS study predicts that the 5G value chain will generate up to $3.5 trillion in revenue in 2035, and create up to 22 million jobs.

Wireless network standards are constantly evolving to offer faster speed. Launched in 2010, 4G included two standards, LTE (Long-Term Evolution) and the now obsolete WiMax. Currently, the United States has a 4G LTE penetration rate of approximately 81 percent, thanks to Verizon, AT&T, Sprint and T-Mobile building out LTE coverage so that mobile networks can gain true 4G speed.

4G LTE connections, having surpassed 2 billion globally in February, are set to outnumber 3G subscribers by 2020, according to an Ovum report. By the end of 2021, global LTE market share will cross 53 percent. Yet, even though people are just beginning to fully reap the benefits of 4G, 5G is being touted as the next big thing.

What are these advances in mobile technology doing for consumers, and how will they drive the economy?

IHS compares 5G capabilities with earlier innovations, such as the printing press, electricity and the Internet, in its potential to bring about a transformative socio-economic change to the human experience. While IHS notes that 5G is just beginning to emerge, it reports that early commercial deployments of 5G are underway and can make meaningful economic contributions by 2020.

IHS states that 5G growth will be ushered in through three key areas, as follows:

• Enhanced mobile broadband (EMBB): Extended cellular coverage into a broader range of structures, e.g., office buildings, industrial parks and shopping malls, will drive 5G adoption and value creation. Improved capacity will have much the same effect. When networks can handle a greater number of devices using high volumes of data, transmission will be more efficient, resulting in lower cost per bit. In turn, this will drive increased use of broadband applications on mobile networks.
• Massive Internet of Things (MIoT): Building upon earlier investments in traditional M2M and IoT applications, 5G will enable significant increases in economies of scale. Within MIoT settings, 5G will drive significantly lower costs due to its low-power requirements, ability to operate in licensed and unlicensed spectrum, and its capacity to provide deeper and more flexible coverage. By these means, 5G will enable the scale of MIoT and drive much greater uptake of mobile technologies to address MIoT apps.
• Mission-critical services (MCS): This is a new market opportunity for mobile technology, so represents a significant growth area for 5G. It will allow wireless technology to provide an ultra-reliable connection that is indistinguishable from wireless to support apps such as autonomous vehicles and remote operation of complex equipment.

While IHS maintains that we’re on the cusp of a 5G era that promises transformational technological change, it points out that public policy, as well as investment and R&D, will need to keep up with technology advancements to usher in a sustainable 5G economic growth. Stay posted. GLDS will help you keep up with a changing world.