October 23, 2018
New research commissioned by international law firm Osborne Clarke claims that businesses in Germany and the Netherlands could be leading the global race to embrace next-generation 5G connectivity. The Next Generation Connectivity research of executives and managers from 11 countries, conducted by the Economist Intelligence Unit, also claims that approaches and attitudes to adopting connectivity vary country to country. This, Osborne Clarke says, could hinder future opportunities.
Across the global businesses surveyed, those in Germany and the Netherlands were found to be the most advanced in their adoption of connectivity. What’s more, executives from these countries were most likely to think that connectivity – including 5G – is important to their business and they were also the most positive about the business applications greater connectivity enables.
Jon Fell, partner at Osborne Clarke said, “There is a great deal of optimism among businesses around the adoption of next-gen connectivity – and rightly so. With greater speeds and capacity, along with lower latency, companies can transform how they do businesses and enable new applications – whether that’s driverless car technology, remote surgery, sophisticated real-time drone management or even building smart cities.”
In preparation for the introduction of next-generation connectivity, businesses in Germany were most likely to have adopted a formal strategy, with over two fifths of German executives (44 percent) saying their business has done so compared to just 22 percent of Chinese respondents. In fact, 36 percent of German executives say their business has already built a stand-alone division to prepare for the adoption of next-generation connectivity.
US businesses, too, have made significant steps to prepare for the adoption of greater connectivity, with half of US executives (50 percent) saying they have already made investments in preparation – the highest number across all countries. In comparison, just 18 percent of French businesses and 24 percent of Chinese businesses said they had made such investments.
Commenting on these findings Jeremy Kingsley at the Economist Intelligence Unit said, “In Europe there have been concerns from carriers about the business case for next generation connectivity – particularly 5G – and investment has been slower than in US. In China too, we’ve seen that the Chinese government and telcos have spent a lot investing in 5G infrastructure, much more so than the US. However, our research shows that while China is spending more on infrastructure, Chinese businesses are spending less preparing for it.
“5G will enable all kinds of opportunities and innovative use cases that are up to businesses to anticipate or invent. Few saw Uber or Spotify coming as a result of earlier generation connectivity. Demand will come from new use cases that stem from business innovation.”
Addressing the skills gap
More than two in five respondents globally (42 percent) say talent and skills is a significant barrier their organisation faces with regards to next-generation connectivity. In the UK, especially, business executives were the most likely to say they do not have the talent or skills they need to capitalise on next-generation connectivity, despite UK respondents being most likely to believe connectivity will be more important in the next five years (92 percent).
Businesses in the Netherlands appear to be tackling this problem head-on, with 44 percent of respondents saying their organisation has hired new talent in preparation for the adoption of next generation connectivity – significantly higher than the global average of 26 percent.
Barriers to overcome
In addition to skills and talent, business executives and managers identified further challenges preventing them from adopting next generation connectivity. The costs required for investment infrastructure topped the list, with 44 percent businesses citing this as a main barrier to embracing connectivity, followed by a lack of talent and skills (42 percent) and security concerns (39 percent).
Concerns over data protection and privacy were also a top concern for those in digital businesses, with 41 percent of executives in this sector identifying this as the main barrier to adopting greater connectivity.
Fell continues, “There is, of course, the risk that greater connectivity will lead to more opportunity for cyber-criminals to gain access to a company’s network and data. We shouldn’t, however, let this fear of the unknown hinder adoption. Instead, businesses need to take the steps to prepare, enabling them to respond to threats much more quickly in this new age of connectivity.
“Reaping the benefits of this golden era of superfast, always on, ubiquitous connectivity will certainly require investment, new partnerships, and redesigned approaches to security and data protection – but it will be worth it.”
In fact, the research finds that 87 percent of global businesses believe greater connectivity will be strategically important to the running of their business by 2023. Nearly seven in 10 businesses (69 percent) believe that next-generation connectivity will have the greatest positive impact on the level of customer service and support it delivers. Furthermore, 67 percent of businesses say that greater connectivity will positively impact supply chain management and 64 percent say it will improve employee productivity.