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Market Insight

5G technology will enable $13.2 trillion of global economic output by 2035

November 15, 2019

Liz Cruz Liz Cruz Associate Director, IoT and Smart Cities, IHS Markit

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5G technology will do more than just improve our mobile experience, it will transcend the communication field and help fundamentally alter how a vast and diverse group of industries operate. In fact, it will contribute large and sustainable economic benefits across all sectors of the global economy. In a recent study commission by Qualcomm, IHS Markit found that by 2035, 5G technology will enable $13.2 trillion of global economic output.

To quantify the “5G Economy” IHS Markit assessed 21 different use cases for 5G technology across enhanced mobile broadband (e.g. indoor and outdoor wireless broadband, fixed wireless broadband, augmented reality and extended mobile computing), massive IoT (e.g. asset tracking, smart agriculture, smart cities, energy/utility monitoring and remote monitoring) and mission critical services (e.g. autonomous vehicles, drones, industrial automation and medical), then modeled the impact of each on 16 major industry sectors. The goal of the study was to understand what 5G enables industries to do or sell, above and beyond what 4G could support. Then to quantify the revenues generated from those use cases throughout the value chain. For example, autonomous driving would generate new sales transactions for the semiconductor suppliers manufacturing 5G chipsets, the telematic control unit (TCU) suppliers, the automobile manufacturers, and potentially the Lyft’s and ride sharing companies of the world. The findings were significant. The $13.2 in sales enablement forecasted is nearly equivalent in current dollars to US consumer spending ($13.9 trillion) and the combined spending by consumers in China, Japan, Germany, UK, and France ($13.4 trillion) in 2018. 

Additionally, compared to the same study conducted in 2017, the 2035 forecast for 5G technology’s impact on global economic output has increased by ~$1 trillion due, in a large part, to the early completion of the first 5G standard and the resulting earlier-than-anticipated commercial 5G launches by major operators across the globe.

Other key findings from the study include:

  • The global 5G value chain will generate $3.6 trillion in economic output and support 22.3 million jobs in 2035. This is approximately the combined revenue of the top-10 companies on the 2019 Fortune Global 1000—a list that includes Walmart, Sinopec Group, Royal Dutch Shell, China National Petroleum, State Grid, Saudi Aramco, BP, ExxonMobil, Volkswagen, and Toyota. Fortune estimates these companies employ almost 6.5 million workers. Thus, for the same level of output, the 5G value chain will support 3.4 times as many jobs.
  • The 5G value chain will invest an average of $235 billion annually to continually expand and strengthen the 5G technology base within network and business application infrastructure. This figure represents nearly 80% of total US federal, state, and local government spending on transportation infrastructure in 2017.
  • The investment in and deployment of 5G will fuel sustainable long-term returns to global real GDP. For the study period of 2020 – 2035, 5G’s stream of annual contributions to real global GDP yields a net present value of $2.1 trillion, equivalent to the present-day size of Italy’s economy, currently the eighth-largest in the world.
For further information on adoption timelines for 5G use cases and their economic impact, you can download the full report here.

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Enterprise & IT
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