The making of an economic renaissance

This article originally appeared on The Washington Post.

This is the second release in a four-part series about Qualcomm’s role in realizing the future of 5G. Click here to read Part 1: A homegrown revolution.

Such high-tech scenarios used to live only in the scripts of science fiction movies, but they’re becoming part of our daily reality. In fact, clothing brands are already deploying AR to entice online shoppers back to brick and mortar stores. The appeal is simple: the interactive gadgetry isn’t only eye-popping, it improves the shopping experience, which could boost sales. Yet while immersive experimentation is happening today, imagine if your experience was augmented so it feels that you are really there.

That is all about to happen with the introduction of 5G. The next-generation wireless infrastructure brings immediacy and much more capacity—and is set to revolutionize a range of sectors, shopping included. Sleek mobile headsets of the future will use 5G to provide truly photo-realistic experiences. Meanwhile, by some estimates, the network upgrade could lead to a $12 billion annual revenue increase for retailers by 2021, in mobile phone sales alone. That’s a huge boost for the industry and the urban centers that thrive on its economic halo effect. More money from shoppers could translate to growth and jobs in those cities. And it’s not just retail and the surrounding communities that are primed to benefit. From smart manufacturing along the Rust Belt to entrepreneurship in mid-sized cities, 5G—and the tech that will support it—are on the cusp of ushering in an American economic renaissance.

Of course, the beginnings of that renaissance are already upon us. 4G enabled smart devices and big data to transform the economy, offering businesses new product lines, greater consumer intelligence and more efficient operations. But 5G will represent another connectivity leap. The new wireless infrastructure that will support these advances relies on technology developed by Qualcomm, which has been driving mobile network innovation for three decades. “With our ongoing research and development work, we’re continuing our commitment to inventing technologies that help drive this ecosystem forward,” said Durga Malladi, senior vice president of engineering at Qualcomm Technologies, Inc. “Our technologies are designed to expand the reach of 5G to new industries, new deployment and business models, and new ecosystem participants.”

Expected to be commercially operational for smart phones in 2019—and more broadly soon after—5G will increase internet speed and reduce latency, an industry word to describe how long it takes data to travel within a network. This forms the foundation for economic progress. And that all begins with new tech.

“Our technologies are designed to expand the reach of 5G to new industries, new deployment and business models, and new ecosystem participants.” — Durga Malladi, Qualcomm

The new tech economies

“5G will unleash plenty of opportunities to enable more innovation,” said Xia Zhou, associate computer science professor at Dartmouth College. Imagine the wireless network as infrastructure—a skeleton frame on which new digital tools can be built. 5G forms the building blocks for a range of technologies, such as artificial intelligence and the Internet of Things (IoT), which require network upgrades to be fully deployed. The applications are manifold, noted Malladi: “5G is what we call this unifying connectivity fabric—that also serves as a platform for future innovation.”

The collective economic impact of enabling this type of entrepreneurship is significant, and diffuse. Although the stereotype is that the tech boom is centered in Silicon Valley, in reality, innovators are spreading out, starting businesses in mid-sized cities across the country. The result is an influx of capital and jobs in a range of emerging innovation hubs. In Austin, for example, tech employers support over 100,000 local jobs and contribute around $20 billion to the city’s GDP. In Charlotte, another city with a strong tech industry, businesses in the sector expanded job counts by 62 percent from 2006 to 2016. It’s likely that this type of boom in mid-sized cities will only accelerate with the transition to 5G.

And according to Jesse Berst, who chairs the Smart Cities Council, it could have a profound multiplier effect. He calls tech companies the “anchor tenants” of an innovation economy. “Once you have a critical mass of tech companies, then your city gains and benefits from the organizations that arise to support them,” he said. In fact, research by a University of California, Berkeley professor suggests every new innovation job in a city helps create five additional non-innovation jobs.

“Let’s say you want to buy a car. You can sit in it virtually, look inside, pop the hood and even test drive it—all from the comfort of your home.” — Brian Lavallée, Ciena

Remaking retail

For larger cities like New York and Los Angeles, the boost to retail will be similarly significant. 5G applications go well beyond in-store photo-realistic AR experiences. Take, for example, fully immersive virtual reality shopping, said Brian Lavallée, senior director of portfolio marketing at the network strategy and technology company Ciena. “Let’s say you want to buy a car,” he said. “You can sit in it virtually, look inside, pop the hood and even test drive it—all from the comfort of your home.”

The upgraded network could also allow brands to better protect data, create video-driven customer service experiences and expand mobile shopping opportunities. To optimize efficiency and lower costs, brick and mortars could integrate digital innovations, such as smart shelving, which will leverage data analysis and automation to ensure the right products are stocked at all times. For those that prefer to shop from their devices, 5G could also enable improved tracking services for the delivery of purchased goods.

All of this “will give consumers a differentiated experience,” said Malladi. And better consumer experiences mean growth for a sector that supports many jobs. By 2035, 5G could enable $1.3 trillion in global wholesale and retail sales.

A new industrial era

The gains could also help restore manufacturing. Dartmouth’s Zhou points out that the shift to 5G will enable smart factories, which could boost growth in Rust Belt communities whose fate has long been tied to the health of the industrial sector. These factories could leverage connected devices, data-rich sensors and robotics to achieve greater efficiency and productivity. Earlier this year, Qualcomm Technologies, Inc. offered a peek into this future, demonstrating the ability to run an industrial ethernet—a connected localized system of computers in a manufacturing environment—over a 5G wireless network.

The difference between 4G and 5G will be noticeable when “moving control of machinery to a wireless link,” Malladi said. “Latency affects the ability to replace wired connections in factory but also requires new levels of reliability not possible today.” Smart factories could lead to estimated savings of nearly $60 billion annually for the sector, and within two decades manufacturing could see almost $3.4 trillion in 5G-enabled sales activity.

Antoine van Agtmael‏, a senior adviser at FP Analytics, a public policy advisory firm in Washington, D.C., and author of “The Smartest Places on Earth,” argues that this innovation is driven in part by collaboration between manufacturing and research institutions in post-industrial cities. “If you go look in Pittsburgh, if you go look at Akron, Ohio, if you go look at Minneapolis, if you go look at Portland, Oregon,” he said. “A lot of new growth is taking place.”

Looking ahead to a wireless network upgrade, that type of growth may become the norm in a diverse range of industries and geographic areas. Across all sectors, the transition to 5G will boost real global GDP growth by $3 trillion and produce over 20 million jobs by 2035. It’s the backbone, said Malladi, of an economy on the brink of revolution.

But first, he said “we need the foundation which is first coming in the form of Smartphones in consumers hands in 2019.”

Leave a Reply

Your email address will not be published. Required fields are marked *