Just when the UK economy is looking like it needs a boost and some positive news, along comes a report that reveals how 5G technology could provide a significant stimulus to UK businesses.
Research from Barclays Corporate Banking named "5G: A Transformative Technology" shows that the introduction of a 5G network could increase annual UK business revenues by between £8.3 billion and £15.7 billion by 2025.
The £15.7 billion headline figure at the top end of the range is based on an optimistic scenario that assumes a fast rollout of 5G and strong uptake among businesses and consumers. At the current rate of 5G rollout, Barclays estimates that the annual revenue boost to businesses would be £13 billion by 2025, while a slower than expected deployment would result in an annual increase of £8.3 billion. (See above).
Regardless of which scenario plays out, the report notes that 5G will drive growth in the economy and business revenues and that the size of the positive effect will depend on how quickly networks are deployed and used by businesses. In addition, by 2030, Barclays estimates that 5G will also create 101,300 to 170,900 jobs. (See above).
Which Businesses Benefit from 5G and How?
Sectors that could see the biggest increases to revenues, according to Barclays, are distribution, manufacturing, professional services and business services. The diversity of businesses that will most benefit from 5G shows how broad the applications are for the new technology.
Barclays surveyed 526 senior manager and medium and large enterprises. For respondents that said they expected a revenue boost from 5G, the most commonly cited reasons were increased business efficiency, ability to use Internet of Things (IoT), facilitate communication with customers, reduced business costs, increased business output, expanded geographic reach, and better opportunities for international trade. (See Figure).
However, nearly half of respondents said that they did not expect to see revenues increase due to 5G and only 12% said they expect to see bottom line improvements.
Lack of Awareness Could Dampen 5G Economic Expectations
While 62% of business managers surveyed said that they knew what 5G was, more than a third are not sure how it will work. Furthermore, 14% of businesses don’t even know about 5G and most don’t know that it will be arriving in the UK in the next 12 to 18 months.
Only four in 10 business managers said that they know how their company will benefit from 5G technology and only 15% of UK companies are currently making plans to take advantage of 5G. Businesses that are most likely to be planning for 5G are technology, media and telecoms (TMT), logistics and hospitality and leisure.
Barclays warns that more needs to be done by the government, mobile operators and other stakeholders to make businesses aware of the potential benefits of investing in 5G.
- Read the FULL Barclays report: 5G : A transformative technology
Sean Duffy, Barclays Head of TMT, said:
“The rollout of 5G offers a huge opportunity for the UK. We’re seeing massive potential for business growth, which ultimately delivers a positive knock-on effect for the whole economy.
While the Government and network providers are already working hard to introduce 5G in the UK, we found that businesses do not yet have enough clarity about how they will benefit in the long-run. What’s more, nearly four in ten business leaders still aren’t entirely sure what 5G is.
To ensure the UK can realise the full potential of an accelerated rollout, the Government, mobile operators and other corporate partners – including financial institutions – have a job to do in order to raise awareness amongst businesses so they can harness 5G. This support is crucial for businesses to make smart investments which will unlock the power of 5G.”