The global race to 5G is truly on. With promises to outperform 4G in terms of access speeds, latency, number of connections and energy consumption, it’s not difficult to see why governments across the world regard this next level of connectivity as a significant step change in how we live, communicate and do businesses.
Equipped with next-generation connectivity (in which 5G is just one element), business leaders will have the opportunity to rethink the ways they run their organisations; reducing inefficiencies, reaching new audiences, better serving existing ones and opening new revenue streams. Smart cities, applications such as driverless car technology and immersive experiences to facilitate remote surgery, for example, will be an everyday reality.
Unlocking the opportunity
Organisations across the globe are certainly seeing the benefits in the hyper-connected world. This was clear in our recent Next Generation Connectivity research and report we commissioned with the Economist Intelligence Unit. We surveyed the C-Suite and senior executives from 11 countries about their thoughts on the true potential of next-generation connectivity and the applications it enables.
One of the greatest opportunities they identified was the Internet of Things, with more than four out of five UK respondents considering IoT as the technology that will have the most significant impact on their business in the next five years.
“Always-on” devices connected via the internet will require levels of hyper-connectivity and resilience in communications infrastructure, which can support real-time interrogation, uploading and downloading of data. “Smart streaming”, as this is sometimes called, is already being considered by the EU in the context of the standardisation of future communications infrastructure. This will enable smart vehicles to communicate with smart highways, allowing for traffic management and analytics data to be exchanged between intelligent, centralised traffic management systems and other vehicles. IoT-fuelled connectivity opens the doors to a number of other key trends that in turn present new opportunities.
IoT devices create huge volumes of data that, once analysed, can provide insights into business performance and customer behaviour, and clues as to how efficiencies might be achieved. They can also help pinpoint likely sources of untapped demand.
Furthermore, almost nine in ten UK respondents see opportunity to be gained from augmented, virtual and mixed reality, as mobile devices and connected headsets are used to overlay views of the physical world with data. For example, augmented reality (AR) was the most important application to the Energy and Utilities sector. Providing real-time data via smart glasses to field engineers working on remote installations, being just one example.
Preparing for success
Of course, before reaping the rewards of next-generation connectivity, there are several steps businesses will need to take, and a number of barriers to overcome.
For example, more than two in five senior executives said in our research that talent and skills is a significant barrier being faced by their organisation when it comes to adopting new developments in connectivity. This obstacle appears to be most prevalent in the UK, where business executives were the most likely to say that they do not have the talent or skills that they need to capitalise on next-generation technology. However, nearly a third (30 per cent) of UK businesses are addressing the problem by starting to hire new talent in preparation for the adoption of next generation connectivity – a number we are sure will rise over the next five years.
Costs and security were also cause for concern. Nearly half of the respondents said that high costs of investment were a significant barrier while over two-thirds said that fears over security would likely to lead their business to avoid or withdraw from greater connectivity. It’s understandable; the introduction of more connected ‘things’ along with the deluge of data they produce does bring remarkable complexity and greater levels of vulnerability for business across all sectors. However, with the right strategy in place, there’s no reason why these barriers cannot be overcome.
So how can businesses embrace next-generation connectivity?
Here are my four recommendations for a winning strategy in the race to 5G:
- Experiment: A “fail fast” approach, focused on identifying early wins where connectivity can quickly be shown to increase productivity, boost revenue or eliminate inefficiencies. This may be a trial-and-error process but will reap dividends in the longer term
- Invest in skills: By hiring new talent, investing in skills and setting up digital divisions that focus on the kinds of experimentation discussed above, companies will breathe new life into their business models and introduce fresh thinking that can take them beyond tried-and-tested approaches.
- Build new partnerships: Since next-generation connectivity is expected to cause businesses to rely on third party data, serious conversations need to be had between businesses on how they can open up key data systems to each other, while preserving the integrity of commercially sensitive data and the confidentiality of customer information.
- Tackle security concerns: Connected machines and devices can quickly become targets for hackers. Yet some measures that might protect these connected things are routinely neglected, such as changing default passwords and keeping on top of software upgrades. Every company that runs on connected machines, or creates them for customers, needs a disciplined approach to IoT security.
Harnessing the benefits of next-generation connectivity will require investment, strategic initiatives, new partnerships, and redesigned business processes and even business models. Those who succeed in their strategy will find themselves winning the race and reaping the rewards in the golden era of super-fast, always-on, ubiquitous connectivity.
Jon Fell, Head, Osborne Clarke
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