Five key success factors for the 5G economy

A survey report released by Boston Consulting Group (BCG) shows that corporate decision makers should focus on five key success factors to ensure that the United States continues to build its emerging 5G economy.

Through an in-depth analysis of the factors that will ensure U.S. leadership in the 4G economy, the study concludes that spectrum availability and wireless network deployment, as well as broader economic factors such as a business climate conducive to investment and innovation, private sector R&D, and workforce readiness are key to expanding national and regional 5G penetration and 5G-driven economic growth.

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Enrique Duarte Melo, managing director, senior partner and principal at Boston Consulting Group (BCG), said: “National and regional 5G progress should not be based on misleading snapshots, such as the number of 5G subscribers or 5G base stations deployed in a given quarter.

Policymakers should consider how factors such as network coverage, spectrum availability, the quality of the innovation ecosystem, the business environment, and technical talent come together to drive 5G penetration and make 5G use cases widely available across society.”

1. Spectrum Utilization

Spectrum is fundamental to mobile wireless services, and especially for 5G networks, providers need a mix of low-, mid- and high-band spectrum.

The study found that the United States has made available large amounts of low-band and high-band spectrum but lags in critical mid-band spectrum.

2. Network

Extensive network deployment is critical to laying the foundation for a 5G economy and achieving high levels of wireless penetration (the number of active 5G users per capita).

The study found that U.S. telecom companies are investing seven times more than Chinese companies, and that U.S. operators are expected to invest more than $250 billion in building 5G networks from 2020 to 2025, more than any other country.

3. Innovation ecosystem

Strong R&D investment and IP protection will help spur innovation in innovative 5G services and cross-industry collaboration.

The study found that U.S. technology and telecommunications companies spend significantly more on research and development (as a percentage of sales) than other global competitors. In absolute terms, U.S. wireless companies invest five times more than Chinese companies.

4. Business Environment

Capital spending and investment and an openness to risk-taking, combined with business-friendly policies, will create an environment conducive to wireless innovation and entrepreneurship.

The study found that the United States ranked in the top three for key drivers of creating new businesses and ranked first for entrepreneurship. It is also home to 12 of the top 30 startup cities in the world and is a startup hub for key 5G technologies such as artificial intelligence and cybersecurity.

5. Talent

A workforce with digital and technical skills will provide countries around the world with the expertise to build state-of-the-art wireless networks and develop new 5G applications.

The study found that the United States’ ability to attract the best global talent promotes innovation, and training and retraining employees with technology-related certifications and degrees will be critical.

Furthermore, the study found that the most important impact of 5G will be the services and applications unlocked by powerful and ubiquitous 5G networks.