Will 5G Rollout Result in Rapid Economic Expansion?

The technology faces serious hurdles ranging from regulatory laws, spectrum licensing, and infrastructure retrofitting, to how deployment will be financed and who will be responsible for network security. There are also formidable technical and geopolitical issues that must be addressed before the technology can go mainstream. As well as yet-to-be-answered questions regarding human health and the environment.

These challenges and others suggest a slower, more incremental 5G roll-out than the fait accompli today’s TV ads portray.

So, who’s right? Is 5G likely to be an overnight disruption? A sudden tsunami that hits businesses and consumers everywhere all at once? Or will it be a gradual transition over a longer span of time? One we can comfortably ease into?

The verdict’s out. Here’s why:

For more than 1,000 years, faster, more efficient communication has been associated with rapid economic expansion. From the first Egyptian postal systems to the building of roads and passages by the Romans, to semaphore networks, clipper ships, the telegraph, telephone, and internet, faster communication offered tremendous advantages in business and governance.

It’s a documented fact that cities which adopted the printing press in the 15^th Century grew 60 percent faster in the 16^th Century than those that did not. And had news the War of 1812 ended reached them 2 weeks sooner, the lives of 2,000 soldiers would have been saved at the Battle of New Orleans.

While few would be foolish enough to claim that faster, better communications causes victories on the battlefield or economic booms, a thousand-year track record of consistent correlation is worth paying attention to. And this is precisely the reason why reality failed to match expectations as the world moved from 3G to 4G. For the first time in more than a millennium, the economic gains which historically accompany a major improvement in communications speed did not materialize. Even accounting for the global recession in 2008 and 2009, overall global economic growth slowed. And telecom carriers and device manufacturers who rushed ahead of 4G’s availability — banking on the demand for faster, better video — were left wondering why 4G didn’t translate to their bottom lines as forecasted.

Which begs the question. Was 4G just a historic anomaly? A mere blip in an otherwise 1,000-year old pattern? Or did it represent some milestone break from the past? Did we cross some threshold wherein more, faster, better communication no longer packs the economic punch it once did?

According to researcher Jonathan Spira, there’s a simple explanation. Over one trillion dollars of economic output is now lost every year in the U.S. owing to “data distraction.” And the body of evidence that suggests more information doesn’t necessarily equate to greater productivity, efficiency or even better decision-making is growing. It turns out, all that time spent reading and answering emails, posting on social media, catching up on the latest news and videos, isn’t paying off the way we thought it would.

Adding credence to the idea that more, faster data may be backfiring are anecdotal stories like Atos Origin.

Not long ago, the CEO of the company became convinced that productivity lost from reading and answering emails was having a negative effect on output. So, he challenged his employees to reduce their emails to as close to zero as possible. The employees quickly embraced the experiment and within 3 years a whopping two-thirds of the company’s use of email had been eliminated. Interestingly, during this same period, the company’s operating margins grew 1 percent to 7.5 percent and their stock price increased 50 percent.

Similar stories abound in other industries. As more organizations begin monitoring and restricting employee access to video, entertainment, retail, and other sites, measurable gains in productivity have been reported.

Of course, “data distraction” is only one of a number of possible explanations as to why the leap from 3G to 4G did not produce the economic upside it was predicted to. But the disappointment was profound enough to teach telecom carriers an important lesson. This time around they’re not going to get too far out ahead of device makers or consumer demand. They’re approaching 5G more cautiously.

This article is Part 2 of a series, "Everything You Need to Know About 5G." To read Part 1 — Click Here Now. To read Part 3 — Click Here Now.

Rebecca D. Costa is an American sociobiologist and futurist. She is a world-renowned expert in the field of “fast adaptation” in complex environments. Costa’s work has been featured in The New York Times, Washington Post, USA Today, SF Chronicle, The Guardian, etc. Her first book, "The Watchman’s Rattle A Radical New Theory of Collapse," was an international bestseller. Her follow-on book, titled "On the Verge," was released in 2017. For more information visit www.rebeccacosta.com. To read more of her reports — Click Here Now.