The Impact of 5G

Over the years, new inventions have usually impacted the world economy as well as the business environment, contributing to the so-called creative destruction. At this day and age, a new technology is about to revolutionize the way we interact with the digital world: it is the new generation of cellular network, also known as 5G. While it is true that this disruption has raised controversies regarding health issues, privacy and external political interference, the expected economic returns from the availability of mobile high-speed and low-latency connections are highly relevant, and should therefore be considered and assessed.

One of the most important and relevant impacts of this new technology is the increase in productivity derived from cost reductions or efficiency improvements, which are predicted to occur in virtually all economic sectors. For example, in industries that are directly linked with vehicles or machines of any kind that require human intervention, the possibility for remote control and monitoring of these assets allows for operational tasks to be performed by someone who is far away, thus reducing time spent and transportation costs.

Even in public administration benefits are expected, with high-speed connections allowing for faster responses of emergency services. Another case is the healthcare industry, in which the possibility for remote procedures, more effective monitoring of medical equipment and collection of data from wearable devices will reduce reduce costs and improve the quality of healthcare provided. Accordingly, this contributes to a healthier and more productive workforce, thus generating multiplying effects on the rest of the economy.

Overall, this expected increase in productivity reveals extreme importance, since it will enable a higher economic growth in the long-run.

Another positive impact foreseen from 5G is the ability to unlock the full potential of the Internet of Things. With the explosive growth in the number of connected devices and gadgets, existing networks are struggling to keep pace. Therefore, 5G’s high capacity is expected to allow seamless connections, with this product connectivity allowing firms to create and launch completely new business models, thus driving entrepreneurship and growth.

Furthermore, in remote regions where the installment of wired infrastructure is not economically viable due to low population density, 5G emerges as an alternative to offer these areas more reliable and higher quality internet connections than they currently have. This allows for the settling of businesses and job creation, with all the benefits associated with it. However, urban areas are predicted to be the first ones to receive the technology, meaning that this may only occur further in time.


At such a premature stage, forecasting the economic impacts of this novelty is a quite complex task. However, all in all, 5G is expected to bring a push to economic growth and prosperity for the countries that pursue the disruption, leaving behind, in relative terms, the nations that forego the opportunity. Therefore, this may be a major source of inequality between the richer countries, which are able to implement the technology, and the poorer nations that still have to employ a significant share of their scarce resources in satisfying more crucial and basic needs, and so contributing even more for the digital divide.


  • Cnet

  • Medium

  • McKinsey & Company