Because of new demands for connectivity, flexibility and reliability brought on by the pandemic, investment and interest in 5G technology will continue to increase post-COVID, according to a study released Tuesday by IHS Markit in partnership with Qualcomm and Omdia.
This will be especially important for the auto industry as more vehicles become connected. It will also have implications for autonomous vehicle applications.
Although the pandemic created "significant supply chain interruptions that stymied the expanded rollout of 5G," this will be a short-term delay, according to IHS.
Instead, IHS expects that from 2020 to 2035, the collective investment in R&D and capital expenditures by firms that are part of the 5G value chain — including automaker device manufacturers and other providers of core technologies and components — within the seven countries studied will average over $260 billion annually.
IHS expects an 11 percent net increase in global 5G investment and R&D during that 15-year span compared with the 2019 forecast.
This is even though economic growth rates by 2035 will be lower and gross sales levels will be about 2.8 percent lower than pre-pandemic forecasts from 2019.
Emerging value
IHS also said that "emerging use cases for 5G, including need to support increasing numbers of individuals working and schooling from home, are expected to drive 5G investment moving forward."
Among the many industry sectors that are expected to be impacted the most by 5G use cases are manufacturing, information and communication, and wholesale and retail.
"The 5G economy in a post-COVID era is even more robust," Karen Campbell, associate director of research at IHS Markit Economics, said in a briefing Monday.
IHS anticipates three measures will signify the macroeconomic benefits of 5G over the next 15 years: the emerging 5G value chain, sales enablement and the net contribution to global gross domestic profit.
'Deepening deployment'
In its report, IHS said it "expects the continual and deepening deployment of 5G ... to fundamentally support and enable the emergent requirements of the post-pandemic world." This includes working from home, distance learning, telemedicine and online retail.
As it relates to the auto industry, 5G will help enable connectivity and autonomy in vehicles.
IHS said there are benefits across multiple industries for each 5G use case. Autonomous vehicles and drones, for example, will not just stimulate sales of driverless cars and unmanned aerial vehicles to consumers, but can also be deployed in agricultural and mining applications, be used in the transportation sector for driverless transport and delivery, and be used in municipal transit systems.
Automakers are transitioning to 5G quickly, which has required them to rethink vehicle architecture design to access high-speed data rates with very low latency, said Nakul Duggal, senior vice president and general manager of automotive at Qualcomm.
"The car is transitioning from being what is called a mechatronic device to really, becoming a software-defined platform," Duggal said. "You have to be very much in touch with the network evolution."
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