Why 5G is key to Europe’s economic recovery

One of the most significant lessons learnt during the pandemic is that digital connectivity is a lifeline for society. It can also drive our economic recovery, build resilience, and enable our green transition. Joakim Reiter, Vodafone Group’s Chief External and Corporate Affairs Officer, explains why we need faster development in 5G if we are ‘to build back better’ and ensure Europe remains competitive.
Source: Adobe Stock

By Vodafone

05 Jul 2021

How has the pandemic changed our relationship with online technologies?

We spoke to people from across Europe, with the help of Friends of Europe, to understand their experiences with technology during the pandemic. Many described connectivity as ‘essential’, as digital technologies were the only way to stay informed, connected, keep working, access crucial public services and healthcare, and study. It’s incredible to realise how schools responded by transferring lessons online, and how small businesses pivoted to provide online services. In early 2020, how many of us regularly used video conferencing technologies?

As a result of the pandemic, many industries installed remote monitoring systems, so staff could oversee operations from afar. Though these technologies were available beforehand, the pandemic simply made people aware of how useful they are. The situation also gave us little choice but to test them out – and effectively learn on the job. Our experiences would have been very different without digital technologies, and, in turn our attitudes have consequently changed.

We’ve seen 5G applications make a positive impact on business performance during the pandemic. A recent Nokia study showed that companies at an advanced level of 5G adoption experienced a net increase in productivity (+10%) and were the only group able to maintain or increase customer engagement1. Therefore, it will not come as a surprise that the online advantages 5G brings have assumed greater importance. This trend is not going to reverse – but in fact accelerate in the coming years.

What should the priorities of Europe’s recovery be? 

The pandemic taught us that we cannot take anything for granted. Issues like the digital transition and greater network capacity through full 5G deployment have become imperatives. But as European Commission Executive Vice-President Margrethe Vestager recently highlighted it is also a matter of social inclusion. Though people will struggle to get onboard with technologies they do not fully understand or trust, we must prioritise digital skills and education to ensure no one is left behind, enable the transformation of both small and large businesses, and support public administrations, so they can perform more of their operations online.

“A recent Nokia study showed that companies at an advanced level of 5G adoption experienced a net increase in productivity and were able to maintain or increase customer engagement”

Joakim Reiter, Chief External and Corporate Affairs Officer, Vodafone Group

5G investment and deployment are key to our recovery. This will address the digital divide and power the next industrial revolution by underpinning new real-time devices and services in manufacturing, energy, life sciences and agriculture. The return on investment will be substantial.

We recently commissioned a report that showed a comprehensive approach to digitalisation can yield a €1 trillion digital dividend 2. Fast, low latency 5G reduces the time between actions and responses, making devices, machines, and sensors more reactive, allowing for bi-directional communication and real-time remote control. Private networks, enabled by 5G’s capabilities and coverage characteristics, allow machines, tools, parts, and people in a factory to be perfectly synced, raising production, and facilitating mass customisation.

We are already seeing exciting deployment of 5G in the transport sector, where technology is transforming the ability of vehicles to communicate with each other and surrounding infrastructure. We are partnering with Nokia, Chordant and road operators on a new mobility cloud platform to cut congestion and foster safer, more sustainable transport ecosystems. 5G will also help us reach our Green Deal objectives, as it helps decarbonise the economy, increase energy efficiency and improve transport safety; transforming industries and providing an economic stimulus.

Is the EU going fast enough in 5G and the digital transition?

It might look like Europe is investing heavily in this area, with the EU prioritising digital innovation within the Recovery and Resilience Facility (RRF). EU Member States must now spend at least 20% of the total €672.5 billion budget on fostering digitalisation. The RRF’s digital priorities are the right ones: connectivity; digital-related investment in R&D; human capital; e-government; digitalisation of businesses; deployment of advanced technologies; and greening the digital sector. However, the RRF alone will not achieve the Digital Decade 2030 targets the Commission has set.

“We must accelerate the deployment of very high-capacity networks, because without these innovations industrial transformation will occur elsewhere, and we will cease to remain competitive with the US and China”

Joakim Reiter, Vodafone Group

Vodafone has released research that compared the national recovery plans submitted by 20 EU Member States against the EU Digital Decade 2030 targets 3. It shows that despite the new money promised, it is not enough. Our report, Achieving the Digital Decade: Recovery & Resilience Plan Contribution, found that the combined investment of the Member State plans and the EU recovery plans for connectivity amounts to just 46% of the estimated €210 billion EU-wide investment needed to meet our 2025 targets. Unfortunately, Digital Infrastructure is receiving the lowest allocation of funds out of the four key pillars of the Digital Compass. Citizens, businesses, and governments cannot reap the benefits of digitalisation if they cannot access quality, secure internet. This is a fact – the faster we can address this gap, the better. We must accelerate the deployment of very high capacity networks, because without these innovations, industrial transformation will occur elsewhere, and we will cease to remain competitive with the US and China.

How can we bridge this digital gap?

Every Member State should have a comprehensive plan for meeting the ambitious Digital Decade targets. Apart from allocating sufficient funds, there must be an equally ambitious reforms programme. They must also help close the urban-rural connectivity divide in collaboration with industry by contributing to 5G deployment in rural areas, where there is no economic case for private investment. Policies must also be introduced to remove barriers for deploying digital infrastructure, to facilitate increased sharing so we can reduce costs and duplication and ensure that spectrum licensing is used as a means to encourage investment.

At Vodafone, we want to enable high-quality 5G technology and the digitalisation of Europe. But we need everyone to work together to seize this opportunity to drive Europe’s recovery, and secure a digital future we can all be a part of. Together we can.

  1. https://www.nokia.com/networks/5g/readiness-report/business-readiness-for-5g/
  2. https://www.vodafone.com/sites/default/files/2021-02/digitalisation-an-opportunity-for-europe.pdf
  3. https://www.vodafone.com/sites/default/files/2021-06/deloitte-llp-europe-digital-decade-rrf-gap-analysis.pdf

This content was commissioned by Vodafone and produced by Dods