Requiring New Physical Infrastructure, Global Supply Chain, Investment Model
“5G could become a platform for service development, necessitating new partnerships, innovation models and openness across the digital ecosystem.”
– World Economic Forum Cross-Industry Workshop “Transformation of Industries & Society through 5G” hosted jointly with the GSMA in London, October 2019 .
For the first time industries are playing critical roles in setting guidelines and standards, and driving fit-for-purpose innovations with the user side evolving faster than the supply side. Several leaders from a variety of industries share this view as we had the opportunity to experience during a World Economic Forum workshop hosted jointly with the GSMA at their headquarters in London in October. Participants included experts from mobility & logistics, manufacturing, energy, telecoms, tech/software, investment, retail, space tech, construction/architecture, media and security. This cross-industry group discussion explored the challenges, opportunities, use cases, potential solutions and approaches for a viable global roll-out of 5G next generation networks.
One of the technical/operational challenges in adopting this emerging technology at scale is upgrading the physical infrastructures into 5G compatible ones while balancing connectivity vs. privacy and energy efficiency. While 5G can utilize a much wider spectrum at higher frequencies, its ability to penetrate building materials decreases. When 5G is available, construction industry will require new strategies to incorporate reliable in-building coverage in a scalable and cost-effective way.
On the other hand, this provides an unprecedented opportunity and incentive for a smarter construction model to occur, as the construction industry lags well behind other industries in its adoption of emerging technologies despite its significant potential of impacts and return on investment. For example, industrialization of connected buildings with compatible IoT interfaces will serve to leverage the full power of 5G. Top-down planning of smart buildings and pre-installation of system components such as fiberoptic cables, sensors and signal boosters in a factory setting can benefit from economies of scale and can simplify on-site commissioning processes resulting in significant time and cost savings.
From a commercial perspective, traditional wireless business model cannot justify multi-trillion dollar investment required for rolling out 5G infrastructure, including upgrading vital infrastructure by telecoms carriers, and subsequent development of a global supply chain for 5G-compatible smart appliances, homes, buildings, cars, factories, hospitals and others.
A viable investment model that rationalizes and optimizes the finance in this new ecosystem requires cross-industry collaboration and public-private partnership. Companies that can profit from 5G include not only telecoms but also big data, tech, real estate, construction, energy, utilities, logistics, automobile manufacturing, and healthcare companies among others. These related industry players may take the build risk and invest together with network operators to co-finance the supply chain.
Funding and regulatory support from governments and other resources from public sector will be critical to ensure an inclusive roll-out of 5G at global scale, in emerging markets in particular. In this way, great potential for social economic development resulting from the new infrastructure to enable generations of technologies will be taken into consideration along with commercial returns.
Fanyu Lin
December 2019
About Fluxus LLC
Founded in 2013 in New York, Fluxus LLC is a construction/architecture technology company and impact enterprise, committed to providing affordable, energy-efficient and aesthetic smart home solutions for low-to-middle-income communities by leveraging innovations in smart city technologies, sustainable building materials, intelligent design, industrialization and digitalization of construction.
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