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Posted on:
2nd October, 2018

5G technology will have "profound" impact on productivity

Mark Stansfeld is Chair of Worcestershire Local Enterprise Partnership (WLEP), a Non-Executive Director, Digital Technology Specialist, and 5G lead for the Midlands Engine.

5G technology will have "profound" impact on productivity

The UK is in the midst of a productivity crisis. Since the financial crisis of 2007 we have been trailing behind the G7 in terms of output. According to data released in July from the Office for National Statistics (ONS), productivity fell by 0.4% from the final quarter of last year, and this is a trend that shows little sign of abating.

Declining productivity is an issue that the government is intent on resolving, with improvements to digital infrastructure positioned at the core of its solution. By ensuring that Britain is among the first countries able to capitalise on the benefits offered by new infrastructure and technology, the potential for economic gain is maximised.

A key focus area for government investment is the testing and trialling of innovative 5G technology. The successful deployment of 5G will facilitate digital connectivity to drive a more connected, creative and dynamic economy for businesses, citizens and investors alike.

In order to achieve this connected vision, the government has invested in a number of testbeds that will trial and test 5G technology. Each testbed is focused on a different industry - including manufacturing, health, tourism and autonomous vehicles - and the results generated will be fed into the wider 5G ecosystem to create a blueprint model for future digital infrastructure in the UK.  

5G will have profound impact on output levels across all industry sectors, arguably none more so than in the manufacturing sector. The application of 5G will make the manufacturing process faster and more dynamic, allowing the concept of ‘smart factories’ to become a reality. If machinery is automated and self-optimised, not only will the physical production of goods be more efficient, but the benefits will extend to functions such as supply chain logistics, planning and even product development. From start to finish, the manufacturing process will be more productive and more cost efficient.  

Over time this will lead to an improvement in national output. Early predictions suggest that manufacturing firms using 5G could see as much as a 1% increase in productivity. Although this might not sound like much, if we consider that in Q1 2018 manufacturing output in the UK stood at £44.6 billion, then a 1% increase in output could equate to an additional £1.78 billion over the course of the year. A much-needed boost for the UK economy.

The bottom line is that output levels in the UK must be improved and 5G provides an immensely exciting opportunity to unlock a brighter, more productive future.

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