5G to boost UK economy by £15bn by 2025
Written by Peter Walker
The roll-out of 5G networks could supercharge the UK economy by up to £15.7 billion per year by 2025, but the opportunity could be missed because industry leaders still do not know enough about the benefits of investing in the technology.
This is according to new research from Barclays Corporate Banking, which analyses a series of potential scenarios that UK businesses could face when implementing 5G.
While the ‘optimistic scenario’ would see a £15.7bn increase in business revenue by 2025, a slower-than-anticipated roll-out and limited use would deliver around £8.3 billion of added revenue to the UK, while the current pace of development added revenue would reach £13 billion.
The optimistic scenario could be a reality for British businesses, as mobile providers are already beginning to introduce 5G capabilities on a large scale this year, including pilots underway in London, the Midlands, Edinburgh and Belfast.
The government is also supporting 5G by incorporating it into its Industrial Strategy, having pledged £1 billion towards digital infrastructure. The bidding process for 5G licences, meanwhile, opened to the telecoms industry last year.
Accelerated rollout spells a positive picture for regional growth, which would provide opportunities outside the usual technology hubs of London (£4.1 billion in increased business revenue) and the South East (£2.5 billion). The North West (£1.4 billion), East of England (£1.3 billion) and the South West (£1.1 billion) make up the rest of the top five.
Under the optimistic scenario, the business areas set to see the largest revenue increases are distribution (£3.6 billion), manufacturing (£2 billion), professional services (£1.1 billion) and business services (£1 billion).
The research revealed that a majority of businesses (58 per cent) are already benefitting from fast communications technology like 4G and ultrafast broadband, because it allows companies to operate across disparate locations (59 per cent), communicate with customers and potential customers (49 per cent) and connect multiple machines and devices (48 per cent).
5G can further enhance these operations through benefits including peak data rates 20 times faster than 4G and simultaneous connections for one million devices per square kilometre.
This speed paves the way for innovations in artificial intelligence, robotics and large-scale Internet of Things (IoT) usage. For businesses, this means more extensive machine-to-machine communications, using self-driving vehicles and better overall infrastructure – amongst other new applications.
Barclays also commissioned YouGov to conduct online interviews with 526 senior board level respondents and their direct reports at medium and large manufacturing, retail, technology, media, telecoms, business services, healthcare, education, hospitality, logistics and charitable firms.
It found that just four in ten (39 per cent) business decision makers know how their business can make the most of 5G. When it comes to preparing for 5G, only 15 per cent of businesses are thinking about how to harness the new technology.
While awareness is low for some sectors, those industries with an understanding of 5G are already investing, or planning to invest, in the technology. The sectors planning significant investments into 5G technologies within their business are telecoms and media (35 per cent), logistics (34 per cent), business services (28 per cent) and manufacturing (24 per cent).
Even if businesses may not be immediately planning to invest in 5G technology in the short-term, across sectors, 40 per cent of business decision makers said they expect 5G to increase their revenue over the next five years.
Margot James, minister for digital and the creative industries, commented that the government is committed to ensuring businesses can harness the power of this revolution in mobile connectivity.
“The benefits set out in this report and the potential to add billions to our economy are exactly why we're investing in the UK’s strong 5G ecosystem.
“Through our modern Industrial Strategy, we’re focussed on delivering real-world benefits from 5G in important sectors of the UK economy - providing new services, increasing productivity and improving quality of life.”