Technology & Innovation

Next-Generation Connectivity

October 19, 2018

Global

October 19, 2018

Global
Jeremy Kingsley

Senior manager, Policy & insights

Jeremy Kingsley is a senior manager at Economist Impact and regional practice lead for Technology & Society in Europe, the Middle East and Africa. He leads a regional team of analysts and editors on policy research, consulting and thought leadership programmes exploring technological change and its impacts on society. Jeremy joined The Economist Group in 2017 from Nesta, the innovation foundation, where he oversaw the Challenges of Our Era research programme and design of challenge prizes. He previously edited Nesta's magazine, served as a contributing editor at WIRED, and has spent 12 years covering technology, innovation and business trends as a journalist, researcher and consultant for The Economist, The Economist Intelligence Unit, The Financial Times, Slate, WIRED Consulting and others. He holds a master’s degree in philosophy and economics from the London School of Economics, with distinction, and a first-class bachelor’s degree from Trinity College Dublin.

Internet connectivity has proven to be one of the most profound enablers of social change and economic growth of our time. Beginning with fixed narrowband internet connections and moving through successive generations of increasingly pervasive and powerful networks, connectivity has come to underpin our working and personal lives, empowering businesses to operate more efficiently and with wider reach. In turn, connectivity has sparked and fuelled countless new industries, products and services that are coming to define our modern age. Connectivity has proven to be a vital ingredient for business success.

Over the next five years, the next generation of wired and wireless connectivity, characterised, in particular, by fifth generation (5G) mobile networks, full-fibre broadband and satellite internet technology, is widely touted by industry and observers for its potential to deliver a step change in connectivity and its capabilities.

Enthusiasts for 5G—in truth a broad marketing label for several mobile technologies that will evolve, in time, into the next-generation telecommunication standard—promise a tenfold increase in wireless speeds that could, in some cases, make wired infrastructure redundant. But, critically, next-generation connectivity is characterised not just by speed but by its other attributes, such as greater capacity and low-latency, effectively instantaneous connections that promise to enable such applications as driverless car technology, remote surgery and sophisticated real-time drone management.

Aided, too, by large-scale satellite arrays, ubiquitous connections between devices anywhere in the world could deliver the infrastructure that a truly global Internet of Things requires. Such connectivity promises to enable sensor-laden buildings and cities, transform transport infrastructure, facilitate asset tracking across the globe and extend smart electricity grids to remote areas.

Equipped with next-generation connectivity, business leaders have the opportunity to rethink the ways they do business, to reduce inefficiencies, reach new audiences, better serve existing ones and open up new revenue streams. They also face new competitive threats and risks.

The overall pace of change is blistering— but the anticipation and adoption of next-generation connectivity is affecting industries in different ways and at different rates.

This research seeks to investigate this change. It is based on a survey of 550 senior executives from 11 countries at organisations in five key business sectors: digital business; energy and utilities; financial services; real estate and infrastructure; and transport and automotive. The key findings include:

  • Capital-intensive, “physical” sectors such as energy, real estate and transport have been historically slower to adopt digital connectivity to the same extent digital industries have, but expect significant advances from next-generation connectivity. Respondents in these physical sectors are most likely to predict greater interconnectivity in their business over the next five years, and more likely to have adopted formal strategies around connectivity adoption.
     
  • Nearly nine in ten respondents (87%) report that connectivity will become more important to their business in the next five years.
     
  • Almost nine in ten respondents (87%) regard 5G specifically as being “strategically important” to their business over the next five years, with the energy and transport sectors being the most bullish in this respect.
     
  • Next-generation connectivity is enabling new technologies, including autonomous vehicles. It also paves the way for new business models, such as a growing trend for businesses to provide their products as a service, and charge based on usage and add-on services: a model made possible through real-time remote connectivity.
     
  • Security, data protection and privacy concerns present notable barriers to the adoption of greater connectivity. Two-thirds of survey respondents (66%) say that security concerns are very or extremely likely to lead their business to avoid or withdraw from greater connectivity in some cases, a sentiment particularly pronounced in the energy and utilities sector.
     
  • Businesses in the Netherlands and Germany stand out as leading enthusiasts for next-generation connectivity: Dutch respondents were found to be much more likely to regard various attributes of next-generation connectivity as “extremely significant” for their business. German respondents are the most likely to have taken measures to prepare for the adoption of next-generation connectivity—adopting formal strategies and building standalone divisions, in particular.

 

 

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