5 Critical Success Factors: To Unlock the Full Potential of the Emerging American 5G Economy

Monday, September 14, 2020 Edit this post

By Boston Consulting Group (BCG)

By Boston Consulting Group (BCG)

5 Critical Success Factors: To Unlock the Full Potential of the Emerging American 5G Economy

Policymakers should focus on five critical success factors to ensure the US continues to build its emerging 5G economy, according to a new report from Boston Consulting Group (BCG).

Drawing on an in-depth analysis of the factors that secured America's leadership of the 4G economy, BCG's study, commissioned by CTIA and titled "Building the 5G US Economy," concludes that spectrum availability and wireless network deployments, along with broader economic factors such as a pro-investment and innovation business climate, private sector R&D, and workforce readiness are key to expanding a country's 5G penetration rate and 5G-powered economic growth.

"A country's 5G progress shouldn't be based on misleading snapshots in time such as the number of 5G subscribers or the amount of 5G base stations deployed in a given quarter," said Enrique Duarte Melo, a BCG managing director, and senior partner and lead author of the report. "Policymakers should instead look at how these factors—network coverage, spectrum availability, the quality of the innovation ecosystem, business climate, and technology talent—will blend together to drive 5G penetration and make 5G use cases widely available throughout society."

The factors identified by BCG are:

Spectrum Availability. Spectrum is the foundation of mobile wireless service, and particularly for 5G networks, providers need a mix of low-, mid-, and high-band spectrum.
  • The study finds that the US has made significant amounts of low- and high-band spectrum available, but lags in crucial mid-band spectrum.

Networks. Widespread network deployment is critical to laying the foundations of a 5G economy and achieving high levels of wireless penetration—the number of active 5G subscribers per capita.
  • The study finds that US telecom companies have invested seven times more than Chinese companies and that from 2020 to 2025, US operators are expected to invest over $250 billion to build 5G networks, more than any other country.

Innovation Ecosystem. Strong R&D investment and IP protection will help spur the development of innovative new 5G services as well as cross-industry collaboration.
  • The study finds that US technology and telecom companies spend significantly more on R&D, as a percentage of sales, than other global competitors. On an absolute basis, US wireless companies invest five times as much as Chinese companies.

Business Climate. Capital expenditures and investment and an openness to risk-taking, combined with business-friendly policies, will create an environment conducive to wireless innovation and entrepreneurship. 
  • The study finds that the US ranks in the top three nations on key drivers of new business creation and ranks first for entrepreneurship. It's also home to 12 of the world's top 30 cities for startups and serves as a startup hub for key 5G technologies like artificial intelligence and cybersecurity

Talent. A workforce with digital and technical skills will provide countries the expertise to build state-of-the-art wireless networks and develop new 5G applications. 
  • The study finds that the US's ability to attract the best global talent has promoted innovation and that training and retraining employees in tech-related certifications and degrees will be critical.

"This study provides a roadmap for policymakers to unlock the full potential of 5G as the primary engine of America's economic recovery and secure US leadership in this decade long wave of wireless-driven innovation and job creation," said Meredith Attwell Baker, CTIA president, and CEO. "With a recommitment to free up more licensed mid-band spectrum and continue our pro-investment regulatory framework, I'm confident that our wireless platform will enable America's entrepreneurs to build an inclusive 5G economy."

Further, the study finds that the foremost impact of 5G will be the services and applications unlocked by powerful and ubiquitous 5G networks.

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IndraStra Global: 5 Critical Success Factors: To Unlock the Full Potential of the Emerging American 5G Economy
5 Critical Success Factors: To Unlock the Full Potential of the Emerging American 5G Economy
By Boston Consulting Group (BCG)
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