A study released by comms chip and technology giant Qualcomm Technologies has revealed a potential 5G-related boom over the next 15 years despite the Covid-19 pandemic’s effects on the global economy, with a 10.8% net increase in global 5G investment compared with the 2019 forecast, and an increase in 5G-related jobs to 22.8 million by 2035.
The IHS Markit 2020 5G economy study, an update of a pre-pandemic study, found that 5G mobile technology will, like electricity or the automobile, benefit entire economies and societies due to the global 5G standard (5G New Radio) advancing mobile from largely a set of technologies connecting people-to-people and people-to-information to a unified connectivity fabric connecting people to everything.
IHS calculates that 5G will enable $13.1tn in global sales enablement by 2035. However, the firm’s current sales forecast in 2035 is about 2.8% lower than pre-pandemic forecasts, and the world real GDP forecast is 3.1% lower. In contrast, IHS Markit’s revised forecast for 5G gross output is lower by only about 0.6%, demonstrating great resilience of the next-generation wireless technology, destined to transform industries.
That notwithstanding, IHS Markit attributed the increases to unprecedented demand for 5G network infrastructure and devices, along with the realisation that 5G will transform industries across the board. This, it said, was further compounded by the realisation across businesses, governments and society of the critical nature of connectivity during the global pandemic. Digital transformation of industries that would typically take several years to complete is being accelerated dramatically.
Cristiano Amon, Qualcomm
The study also predicted that collective investment in research and development (R&D) and capital expenditure (capex) by firms that are part of the 5G value chain within the seven countries examined in the report – the US, China, Japan, South Korean, Germany, France and the UK – will average over $260bn annually, up from $235bn in the pre-pandemic report.
The 5G value chain alone is set to drive $3.8tn of economic output by 2035. Regionally, the US and China are expected to lead in 5G capex and R&D, investing a total of $1.3tn and $1.7tn, respectively, over the 15-year time horizon of this study.
While it said 5G could enable about 5.1% of global real output in 2035, IHS Markit forecast the 5G-enabled sales percentage by industry to range from 2.3% in the hospitality sector to 10.9% in the information and communications sector. It added that 5G could enable 6.4% of public sector and 5.9% of agricultural output in 2035, driven by smart cities and smart agriculture deployments, respectively.
“IHS Markit’s findings confirm what we are seeing in the market – strong momentum in both the deployment of and demand for 5G around the world,” said Qualcomm president Cristiano Amon. “Not only has 5G proven to be resilient in the face of the Covid-19 pandemic, but it is also proving to be the technology at the heart of the digital transformation across industries.”
Karen Campbell, associate director for IHS Markit Economics and lead analyst on the report, said: “IHS Markit expects the continual and deepening deployment of 5G, and the products, services and experiences that will flow from it, to support and enable the emergent requirements of the post-pandemic world for connectivity, flexibility and resiliency.”