June 6, 2019

5G ranks above AI in digital transformation for industrial companies

By Robert Scammell

Industrial companies see 5G as one of the most important technologies for digital transformation over the next five years, ranking it above artificial intelligence (AI).

That’s according to a report by French consultancy firm Capgemini, which surveyed over 800 executives from industrial companies spanning 12 countries and 11 sub-sectors, such as aerospace & defence, automotive and logistics. In addition to this, it surveyed 150 telecom executives from the same countries.

Of these, 75% said 5G is a key enabler for digital transformation, 2% ahead of advanced automation, such as drones. 66% of industrial companies see AI and machine learning as a key enabler of their digital transformation.

Several operators, such as EE and Verizon, have had small rollouts of the next-generation of cellular technology, but 5G is still very much in its nascent stage.

It is expected to substantially improve mobile internet speed and reduce latency, in turn improving the capabilities of internet-connected devices, from driverless cars to industrial machines.

Although an emerging technology, industrial companies are confident in its potential, with 65% of those surveyed responding that they plan to implement 5G within two years of it becoming available. Industrial companies believe that 5G will bring security (54%) and operational advantages (52%).

5G digital transformation: Security and autonomy

“This research makes it clear that industrial companies are confident about the benefits of 5G before it has even come to market,” said Pierre Fortier, principal consultant in Telecom, Media and Technology at Capgemini Invent.

“That said, 5G is an emerging technology and there will be many challenges to overcome before it is ready to be deployed at scale. Co-innovation between industrial companies and the telco ecosystem, in the form of pilots and open experimentation platforms, will be essential to create win-win business, service and operating models that will foster 5G adoption.”

The only technology to rank higher than 5G for digital transformation was cloud computing (84%). Additive manufacturing, also known as 3D printing, was deemed the least important technology for digital transformation at 55%.

One-third (33%) of industrial companies say they plan to apply for their own 5G license, rather than relying on telecom operators, favouring greater security and autonomy.

“As a solution provider and a manufacturer, we are monitoring the 5G landscape closely and we believe there are multiple benefits to holding our own license,” said Gunther May, head of technology and innovation, Business Unit Automation and Electrification at Bosch Rexroth AG.

“It would allow us to be in full control of our 5G strategy by giving us the freedom to either deploy the network alone or with a telecom operator.”

Read more: There’s more to 5G than speed: Why network slicing could be a game changer

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