5G’s Potential, and Why Businesses Should Start Preparing for It

In fact, these remarkable technical features will allow next-generation networks to compete head-on with wired broadband systems, including those built with today’s fastest fiber-optic technology.

More to the point, 5G’s revolutionary technology will also make possible the kind of disruptive applications that usually leave both investors and users salivating. So why the gap between 5G’s possibilities and the lack of urgency and understanding among the executives in our survey?

The answer, we think, is that much of 5G’s biggest impact will be diffused across a range of industries and user communities, making its future value both difficult to see and hard to measure.

This is largely due to the limitations of conventional business thinking. When new innovations disrupt multiple industries or make possible applications that serve new groups of customers (including those who may be un- or under-served today), traditional approaches to strategy and planning underestimate their real impact, leading to delayed investment and missed opportunities.

Where today’s IoT offerings, including connected doorbells and thermostats, are often simple and sometimes even gimmicky, a fully connected residence will generate tremendous benefit, especially to aging baby boomers who hope to stay in their homes as long as possible.

That kind of use case could release tremendous trapped value we’ll all share, including the potential for reduced health care costs, improved quality of life, and more diverse and inclusive communities. But because the industries affected and the users benefiting most from these applications are so diffused, few businesses today, including the network operators themselves, can see the value gap that is growing larger every day.

Still, if incumbent businesses don’t pick up the pace in preparing for 5G, the resulting gaps will inevitably attract new entrants and start-ups, unleashing the kind of sudden disruptions that have unsettled mature industries including entertainment (iTunes and Netflix), transportation (Uber and Lyft), and manufacturing (3D printing), to name a few.

That’s why we recommend an aggressive but measured approach to planning for and investing in 5G today. It makes little sense for companies in affected industries (increasingly, all of them) to bet on one particular technology or application. But at the same time, the old approach of waiting for new 5G-powered markets to emerge and jumping in later as a so-called “fast follower” won’t work either.

That’s because even when disruptors are slow to gain traction, once they do, the race to profit is often over as soon as it starts. If you weren’t already warmed up and on the starting line, your chances of winning will be virtually zero.

What’s more, many of the new applications 5G technology makes possible will be nurtured by interconnected ecosystems that cross traditional supply chain and industry borders. Any hope of capturing even a fraction of the value 5G will ultimately release will require early and sustained intervention, perhaps in the form of industry consortia, along with a balanced portfolio of corporate venture funding. The time is now to begin identifying partners, and experimenting with new forms of collaboration and co-investment.

You need to keep improving on today’s business, while keeping a closer watch on how 5G markets emerge. That’s the only way to be ready to scale rapidly with new offerings as the unknowns dissolve over time.