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Five things business needs to know about 5G

(Image credit: Image Credit: Flex)

5G, the next generation of mobile technology is set to deliver on the promise of a connected and smarter world. Business needs to prepare for this disruptive technology now, or risk being overtaken, says Caroline Dowling, President of Communications & Enterprise Computing at Flex.

Analysts expect around 30 billion smart things will be directly connected to each-other by 2020. All of these connected devices - mobile phones, wearables, smart home devices, and anything with a connected sensor, actuator or microprocessor, are driving unprecedented volumes of data growth.  14 Zettabytes of data is the current estimate, by 2020. For scale, the entire World Wide Web was estimated to contain half a Zettabyte in 2009.

One of the biggest producers of data is the connected car, which is set to produce up to 4 Terabytes of data a day. That’s the equivalent, in data terms of watching Jurassic Park over 12 thousand times.

This volume of data will place an enormous strain on existing communication networks. And with network traffic predicted to rise by 400 per cent in the next 5 years, bandwidth needs to grow 5 times in 5 years to cope. That’s where 5G comes in. 

The fifth generation of mobile network has been described as the backbone of this connected world because it can provide much more capacity for data and can handle more connected devices at faster speeds with reduced latency and greater levels reliability. 

But 5G is not just another G. The improvement is so significant that research firm HIS Markit describes 5G as a general purpose technology (GPT). Other GTP’s of note include the printing press, the internet, electricity, the steam engine and the airplane. All discoveries or inventions that have had a cross industry socio-economic impact and were often catalysts for transformation in the industries they impacted. 

Flex, a $24Bn supply chain solutions company works with multiple customers across 13 industry sectors, including major telecommunications companies. Given that position, Flex has a unique vantage point to see how 5G will be a game changer for many. Here are 5 things you need to know:

1. 5G will enable the Internet of Things 

We’ve been talking about smart connected devices sharing information, or the ‘Internet of Things’ for a long time now. 5G is the enabling technology that will finally allow billions of connected devices to deliver on that promise. 

Flex calls this the ‘Intelligence of Things™’ to reflect how smart nodes connecting and sharing data can lead to improvements in productivity, machine to machine communication (set to be the critical to future manufacturing), optimisation of resources and predictability in business. Eventually this will support cognitive computing and artificial intelligence, with the widespread implications of those technologies. 

2. Information Technology will transform

Information technology is already going through a massive change, the pace of which we have not seen since the acceleration of the PC back in the 1980’s. Infrastructure is converging: servers, storage and networking are coming together through software in one box. We will see more rapid adoption of Cloud and the emergence of edge computing at the extremes of the network to better enable real-time analytics at the point where data is generated. 

Because Cloud enables our mobile and connected world, 5G will only quicken and broaden adoption. It is estimated that by 2020 88 per cent of all data stored will be in the Cloud, and 60 per cent of consumer data (2.3Bn people) will also have their data stored there. 

But Cloud will be more that a storage facility. It will be home to sophisticated analytical software which will deliver new insights from the data. It will be protected by advanced security software too, so data breeches will reduce. 

3. Industries will be transformed by new business models

The telecommunications industry is already feeling the effects of 5G. This is in part due to the size of investment required to bring about a 5G network infrastructure, and in part how telecommunications companies recover their investment.  The related Net Neutrality debate could see telco customers paying for traffic on their high speed networks. 

Another sector, Health, will see benefits brought about by the highly reliable connectivity, particularly in the area of home monitoring of patients. Using connected ‘wearables’ to monitor patients could save hospitals as much as 40 per cent of their resources. 

Utility companies will avail of real-time smart grids to better balance energy resources. And the automotive industry will improve the in-car experience in areas like driver information, passenger entertainment and overall safety. 

The low latency of 5G will enable near real-time vehicle to vehicle, or vehicle to infrastructure communication. This secure, always-on connectivity will pave the way for fully autonomous driving.

5G will drive the rate of adoption of Augmented Reality and Virtual Reality as the ultra-low latency of the network is a requirement to turn these technologies into practical tools for business. 

4. New entrants and fresh competition 

With new technology comes new opportunities. The internet gave rise to online publishers, bookshops became virtual and video consumed online overtook TV volumes in younger generations. 

Each of these new business models had a disruptive effect on their established rivals. The trend of new entrants riding the wave of new technology to displace established players has continued today with Uber and the taxi industry, or Coursera and the education market or Airbnb and accommodation. 

In a recent article, McKinsey claimed business models are less durable than they used to be and are subject to rapid displacement, disruption, and in extreme cases, outright destruction. And so 5G, with its hyper speed, low latency and capacity to connect in real time, will give rise to new business models and new competition. 

5. 5G will connect more than technology

Many organisations will use 5G technology to build new industry solutions and improve customer experience. However, that will require a harmonisation of skills, know-how and technology. Collaboration will be the key to innovation as companies work together in ways they have never done before. 

For example, a digital health service provider with remote monitoring software who wants to connect patients at home to hospitals and healthcare centres might have to partner with the chip manufacturer to optimise the software, a security company to ensure integrity and compliance, a telecommunications provider to build the network solution and an integrator like Flex, with industry expertise to pull everything together.

As the pace of change quickens to a revolution, and new technologies like 5G hold the promise of game changing proportions, now is the time to assess, plan and prepare for the future. To paraphrase Jack Welch - if the rate of change on the outside exceeds the rate of change on the inside, you could be in trouble.

Caroline Dowling is Business Group President at Flex (opens in new tab)
Image Credit: Flex

Caroline Dowling is Business Group President at Flex, a $24Bn, 200,000 employee, global design, engineering, manufacturing, supply chain and logistics company serving multiple industries and markets.