Study: 5G economic opportunity proves resilient

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Findings from the IHS Markit 2020 5G Economy Study, commissioned by Qualcomm Technologies, reveal a 10.8 per cent net increase in global 5G investment and R&D over the next 15 years, compared to the 2019 forecast.

The study also shows an increase in 5G-related jobs to 22.8 million by 2035, up 22.3 million, despite the Covid-19 pandemic’s effects on the global economy.

IHS Markit attributed this increase to unprecedented demand for both 5G network infrastructure and devices, along with the realisation that 5G will transform industries across the board. This is 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 are being accelerated dramatically.

“IHS Markit’s findings in their latest report confirm what we are seeing in the market – strong momentum in both the deployment of and demand for 5G around the world,” notes Cristiano Amon, president, Qualcomm. “Not only has 5G proven to be resilient in the face of the COVID-19 pandemic, it is proving to be the technology at the heart of the digital transformation across industries.”

“IHS Markit expects the continual and deepening deployment of 5G, and the products, services, and experiences that will flow from it, to fundamentally support and enable the emergent requirements of the post-pandemic world for connectivity, flexibility and resiliency,” advises Karen Campbell, Ph.D., associate director, IHS Markit Economics and lead analyst on the report.

Additional key takeaways from the study include:

  • 5G will enable $13.1 trillion (€11 trn) in global sales enablement in 2035
    • IHS Markit’s current forecast for global gross output (sales) in 2035 is about 2.8 per cent lower than pre-pandemic forecasts, and the world real GDP forecast is lower by 3.1 per cent.
    • In contrast, IHS Markit’s revised forecast for 5G gross output is lower by only about 0.6 per cent, demonstrating great resilience of the next generation wireless technology, destined to transform industries
  • By 2035, the 5G value chain alone will drive $3.8 trillion of economic output, up from $3.6 trillion in the prior report.
  • Collective investment in R&D and CAPEX by firms that are part of the 5G value chain, within the seven countries (the US, China, Japan, South Korean, Germany, France and the UK) examined in the report, will average over $260 billion annually (up from $235 billion in the pre-pandemic report).
  • The United States and China are expected to lead in 5G CAPEX and R&D, investing a total of $1.3 trillion and $1.7 trillion respectively, over the 15-year time horizon of this study
  • 5G could enable 6.4 per cent of public service (government) and 5.9 per cent of agricultural output in 2035, driven by smart cities and smart agriculture deployments, respectively.
    • While 5G could enable about 5.1 per cent of global real output in 2035, IHS Markit forecasts the 5G-enabled sales percentage by industry to range from 2.3 per cent in the hospitality sector to 10.9 per cent in the information and communications sector.

 


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