In 2035, 5G will enable $13.2 trillion of global economic output, according to the latest assessment of the economy impact of 5G, released by IHS Markit.
The three major use cases of 5G are Enhanced mobile broadband (eMBB), massive IoT and mission critical services.
5G will transform mobile into a general purpose technology (GPT). Following an incubation period, a GPT hits an adoption tipping point that leads to transformational, and often disruptive, changes to industries and entire economies, according to IHS.
With new business models emerging around 5G, new level of complexity to policymaking and regulation are emerging and the old ways of delivering goods and services are either dramatically altered or abandoned completely.
According to IHS, areas where policy and regulatory modernization will be required for a 5G-ready world include public safety; cybersecurity; privacy; spectrum allocation; public infrastructure; healthcare; spectrum licensing and permitting; and education, training, and development.
The challenge for policymakers in the 5G economy is that they must be prepared to address the ubiquity of 5G in everyday life without creating regimes that stunt the continued innovation that will be critical to the success of the 5G economy.
Policies that safeguard the ability of firms to take risks, make investments, and continue the relentless pursuit of innovation—particularly rules governing intellectual property protection—are the optimal vehicle for leveraging and capturing the full value of the 5G economy.
Policies and incentives that encourage investments and the availability of risk capital, aided by strong intellectual property protections, will maintain the hospitable environment that will allow the 5G economy to flourish.
Compared to the 2017 study, the 2035 forecast for 5G technology’s impact on global economic output has increased by ~$1 trillion due, in a large part, to the early completion of the first 5G standard and the resulting earlier-than-anticipated commercial 5G launches by major operators, the report said.
The study estimates that the global 5G value chain will generate $3.6 trillion in economic output and support 22.3 million jobs in 2035. This is approximately the combined revenue of the top-10 companies on the 2019 Fortune Global 1000.
The 5G value chain will invest an average of $235 billion annually to continually expand and strengthen the 5G technology base within network and business application infrastructure.
The agency predicts that the investment in and the deployment of 5G will fuel sustainable long-term returns to global real GDP. During 2020 – 2035, 5G’s stream of annual contributions to real global GDP yields a net present value of $2.1 trillion.