The past five to ten years have seen many technological breakthroughs that hold an extreme amount of promise for a wide range of commercial, military, and industrial applications.
Unfortunately, the world’s current telecommunications framework is largely outdated and too slow a nervous system to facilitate the needs of tomorrow. That’s where 5G comes in.
Woody Preucil at 13D Global Strategy and Research recently explained to FS Insider why 5G is so important, the industries that will be affected most by it, and how it is currently the centerpiece of a US-China race over technological supremacy.
5G Will Change Everything
5G networks promise data speeds 10 to 100 times faster than current 4G LTE networks, he added, with around 1 to 5-millisecond latency, higher security, and increased reliability.
Though most people think of 5G as a mobile phone technology, “It’s really about building out the IOT — the Internet of Things,” Preucil said. “It’s about the machine economy.”
These 5G networks are poised to be the connective tissue between artificial intelligence and quantum computing systems based in the cloud, as well as the digital “nervous system” for the machines connected via the IOT in the field.
“5G could potentially support trillions of sensors,” Preucil said. “As this network is built out and the 5G networks are built out, it will create strong feedback loops between the AI and quantum computers in the cloud and the digital sensors in the field, which is going to help with faster response times and the ability to create more customized products with the data that’s generated.”
Every Industry Will be Touched By 5G
The objective is to build very dense sensor networks with around 100,000 sensors per city block, Preucil stated.
To create this type of dense network, a lot of fiber optic cable is needed, two to six times more fiber than optical cable directly to the home, he added, and 5G has huge implications for pretty much every aspect of the economy.
Every segment of the economy, from automotive technology, healthcare, manufacturing, distribution, emergency services, and many others will be profoundly impacted by 5G. A study by IHS Markets estimated the global economic impact from 5G networks could be $12 trillion by 2035, Preucil noted, and could create around 22 million jobs worldwide.
Competition Heating Up Between US, China, and Others
The United States, China, and other countries around the world are racing to implement 5G networks, with the costs of building these running into the hundreds of billions of dollars. The US is looking at investing around $275 billion over the next 7 years, Preucil noted, with China putting in $400 billion.
A study from analysts Mason and Recon Analytics recently determined that China is the most prepared to launch 5G, with South Korea coming in second, and the US in third.
China’s goal is to roll out a nationwide 5G network by 2020, Preucil stated, leaving China the clear global leader in 5G. The Chinese plan to leverage investment in 5G technology to influence intellectual property and develop these standards for 5G.
“I think the US is certainly at risk of falling behind,” Preucil said. “China is investing a lot in these cutting-edge technologies — AI, quantum computing, 5G, genomics — and they already exceed the US in late-stage R&D. … The stakes are high … because 5G is such an important enabling technology, the US is at risk of losing its lead in this arena.”