When reading our analysis of 5G’s impact on the UK and global economies – Powering Your Tomorrow – the first thing you’ll notice is some very large numbers. Like a global GDP uplift of US$1.3 trillion (£1.06 trillion) by 2030 from the adoption of 5G technology, including some £43 billion generated in the UK.
What’s more, this boost will be felt across many different areas of the economy. All five of the major industry sectors where we quantified 5G’s economic impact – health and social care, utilities, consumer markets, media, and financial services – will see major GDP gains from using 5G, with health and social care leading the way with an added £15 billion by 2030.
Rolf Meakin, Global Communications Consulting Leader, PwC United Kingdom
On their own, big economic numbers don’t actually tell us very much. To put them in a real-world context, we also need to answer the “so what?” And with 5G in the UK, I think this comes down to three key points.
First, 5G’s energising effect on the UK economy will come from boosting productivity and creating new user experiences through a vast array of applications. But it’ll be a relatively slow burn: the impact won’t really take off until the second half of this decade, because of the time-lag involved in rolling out networks and developing and adopting use cases.
Second, 5G can play a vital role in building back the economy following the beating it’s taken – and is continuing to take – from the pandemic. The recovery will be a long haul, putting 2025-2030 well within scope for the building-back effort. UK policymakers must look to maximise 5G’s potential through policies that encourage network investment and 5G-enabled innovation, including in the regions. Support and involvement from businesses will also be key.
5G’s positive impact on productivity and on new consumer, employee and citizen experiences, will spring from combining it with four other emerging technologies: artificial intelligence (AI), virtual and augmented reality (VR/AR), robotics and edge computing. This positions 5G as the most reliable and flexible ultra-high-speed link connecting all of these technologies so they can work their magic.
The implication? In terms of rebuilding the economy post-pandemic, governments should be thinking less about investing in things like motorway upgrades and new airport runways – and more about creating the conditions that will enable a democratic and regional disbursement of the economic stimulation across the country through clusters that combine 5G with the other 4 emerging technologies.
This also suggests the deployment of 5G infrastructure should focus initially on covering clusters of public and private sector employers which can be transformed using these technologies and draw in the innovative companies that will help to make it a reality. From smarter hospitals, cities, factories and logistics to remote front line and expert workers, the opportunities on offer for higher regional and national productivity, are legion – and the UK must not pass them up. The reset opportunity as the nation recovers from the economic impact of the pandemic is a moment not to miss.
The third “so what?” is 5G’s contribution to achieving sustainability targets. Alongside levelling up, the government’s other flagship policy is progressing to net zero carbon emissions. In December the UK Government set an additional milestone target of 68% reduction in greenhouse gas emissions by 2030 (relative to 1990 levels) as a staging post on the journey to net zero by 2050. 5G can help by being a more energy-efficient communication technology and enabling more flexible ways of working and more efficient economic activities.
One obvious example of this flexibility is easier home-working. But that’s just the start. Think of engineers doing offsite maintenance work by accessing augmented reality information through 5G-connected glasses. Or doctors using 5G to check patients’ vital signs from anywhere without patients travelling to see them. Multiply up the effects of myriad such use cases, and you get more efficient use of resources across the economy, further boosting sustainability.
Zero in on 5G’s powerful effects on healthcare, and the societal benefits rise still further. Even after the pandemic has subsided, the health sector will remain vital for improving people’s quality of life, not to mention the jobs and economic activity it generates. So, any technology that improves productivity in the sector – as 5G will – is a win-win for UK society.
All of this explains why I think 5G must become a cornerstone of our national industrial strategy. And to drive the benefits into the regions, the government should intervene actively to create clusters of innovation: local hubs where the growth industries of the future will come together to capitalise on 5G’s speed and low latency, and the power of technologies like AI, VR/AR, robotics and edge computing. The coming dialogue between policymakers and Big Tech about how, having done well during the pandemic, they could/should contribute to the economic recovery, would be an opportunity to kick-start such clusters. But a myriad of innovative start-ups and early stage companies also have a vital role to play.
As these clusters scale up, their contribution to the UK’s competitiveness will rise exponentially. There's no reason why they need to be in Cambridge or London’s Silicon Roundabout. They can be anywhere. And wherever they are, they’ll create new talent pools as part of the emerging “internet of skills”.
The overall message? Our analysis reveals the scale of 5G’s impact on UK GDP. But what’s equally significant is the nature of that impact and how to make it happen in the best way for the overall future prosperity of the nation. Put simply, it’s time to bring 5G centre-stage in the industrial strategy.
To discuss any aspects of the topic covered or to assess the impact of 5G in detail, please contact me using the details below.