A Boston Consulting Group report lists New York, San Francisco, Los Angeles, Chicago and Seattle as the top metros to spur innovation.
A new report from the Boston Consulting Group has provided a detailed analysis of what parts of the country, and what industries, will benefit most from a wider rollout of 5G, finding that deployment may end up contributing $1.4 trillion to $1.7 trillion to the U.S. GDP while also potentially creating 3.8 million to 4.6 million jobs in the next decade.
The report explains how 5G’s faster data speeds, increased device density and ultra-low latency will allow a number of industries, like manufacturing, IT services and healthcare, to innovate and grow.
Metropolitan areas around New York, San Francisco, Los Angeles, Chicago, Dallas and Houston will see the most immediate gains in terms of job growth and GDP expansion. But the report’s authors were quick to note in an interview that rural areas will also see significant benefits from 5G’s expansion.
SEE: Future of 5G: Projections, rollouts, use cases, and more (free PDF) (TechRepublic)
“The impact is not limited just to Silicon Valley or the Northeast or the Northwest or the big centers. There is more job creation in those areas but in many respects it is just because there are more people there,” said Enrique Duarte Melo, managing director at Boston Consulting Group’s Dallas office.
“As more of the indirect effects come to fruition, every congressional district will see benefits and impacts from 5G.”
The report has a map showing that the New York City area would see a $77 billion GDP impact over the next decade from 5G expansion, while Seattle will see $63 billion in GDP impact and 5G will impact the Dallas area to the tune of about $24 billion.
Cities like Minneapolis would see about 35,000 jobs created over the next decade due to 5G’s expansion, while 52,000 jobs would be created from 5G in the Phoenix area. Another 30,000 jobs would sprout up near Charlotte and Detroit, mostly due to innovations with manufacturing, professional services and healthcare.
“At first, 5G will contribute to economic activity directly through network infrastructure deployment. But as 5G networks continue to roll out and improve, an even greater wave of economic activity will occur indirectly as the networks enable new and improved use cases across industries. These will deliver significant socioeconomic benefits through higher productivity, improved cost competitiveness, and better health and safety,” the report said.
“By delivering faster speeds, lower latency, and higher reliability, 5G will spur additional activity across consumer, industrial, and public domains. Use cases for the Internet of Things (IoT), such as connected vehicles, smart cities, and Industry 4.0, could fundamentally transform industries and drive US competitive advantage in the 2020s.”
Just from spending on building out 5G networks, the report estimates that $400 billion to $500 billion will be contributed to the country’s GDP and may end up creating up to 1 million jobs by 2030.
Construction, information services and manufacturing will see the biggest immediate gains from 5G.
But indirect gains are where 5G will have the most impact, according to Melo and the report. Indirect 5G benefits will add $1 trillion to $1.2 trillion to GDP and create 3 million to 3.6 million new jobs from 2020 to 2030, the report found.
“Over the next decade, as demand for digital products and services grow, even more computer- and IT-related workers will be called upon to deliver next-generation data infrastructure and applications. Software developers, data scientists, information security analysts, network architects, and research scientists will all be highly sought after. We estimate that 5G will indirectly boost employment in the sector by 205,000 jobs and contribute $217 billion to GDP,” the report said.
“5G networks will help manufacturers maximize factory capacity and increase efficiency. The higher sensor density enabled by 5G will optimize production schedules, reduce maintenance costs, and enhance supply chains and logistics management. These improvements could increase the competitiveness of U.S. factories and draw more manufacturing back from abroad. We estimate that 5G will indirectly boost employment in the sector by 380,000 jobs and contribute $165 billion to GDP.”
It will also have a major impact on telemedicine and remote monitoring, according to Melo.
Nick Ludlum, senior vice president at CTIA, worked on the report with Melo and other Boston Consulting Group researchers, noting that the significance of 5G will extend far beyond the gaudy numbers the report suggests major metropolitan areas will see.
“When you scratch underneath the surface, the real significance of the report is that the impact is really widespread across the country in all sorts of different types of communities and industries,” Ludlum said.
“5G is not just having an impact that is constrained to a few big cities or one or two big industries. But you can see the evidence of impact in large cities, small towns, in traditionally big industries, in telecom, and agriculture.”
Melo and Ludlum adde that when 4G was rolled out, few knew how big of an impact it would have on the sharing economy and other platforms or tools that have emerged since 2010.
“When 4G launched, few would have predicted new services such as ride-sharing and food and grocery services on demand. Likewise, 5G will spur innovation that we can’t predict today and will transform every-day life in unforeseen ways,” the report said.
“While innovation will occur broadly across industries, our research suggests that three industries, in particular, will benefit from these future use cases: information services, manufacturing, and health care.”