Business model transformation and 5G

The World Economic Forum has 5G as one of its strategic intelligence pillars, and it's interesting to see how the WEF maps 5G to business model transformation.

If you take a look at the interactive chart on the WEF web site, looking at the future of 5G, some of the attributes, focus areas and use cases of 5G are familiar. You would expect to see the future of mobility, advanced manufacturing, the Internet of things, and digital communications included in this list, as examples.

What's more-surprising is the appearance of corporate governance, new value creation, and insurance and asset management.

The conclusion seems clear: 5G will play a central and pivotal role in the digital transformation that nearly every business will need to undertake to grow in the future.

Covid-19 is also accelerating digital transformation, and business model transformation, around the world, in large enterprises (and SMBs). Some organisations are seizing the opportunity forced on them by the pandemic to review their business models proactively, changing their go-to-market models, and considering the different ways technology can support this.

Others are reacting tactically.

Either way, the opportunity for businesses seems clear: in the digital transformation stakes, developing digital transformation strategies while the technology and infrastructure are still being defined and built will create early-mover business advantage and differentiation.

This is much more than defending market share: 5G will allow companies to create new user experiences, in new ways, and deliver it more efficiently, and more flexibly.

Our own research on the impact of Industry 4.0 first quantified in 2018 how early-movers here in Australia create differentiation and competitive advantage through digital transformation. As that report noted:

"A performance gap has emerged between enterprises that have invested in digital transformation and are applying digital technologies and strategies versus those that are still competing in traditional ways... With technology more accessible to companies regardless of size or age, the potential presented by Industry 4.0 will be captured by those enterprises that align themselves to seize it."

There is a lesson to be learned from the introduction of 3G and 4G: both of those connectivity technologies were essentially evolutions of what had gone before. When you remember that 3G was introduced in Australia in 2003, and 4G from 2014, the data overheads on these networks were very different from those that we have today. As just one measure, Internet users in 2003 totalled about 608 million. In 2014 the total was 3,079 million. Today it's over 4,648 million - before you add IoT connections, smart devices, and more.

The other interesting data point from the Optus research is the industrial revolution eras in which the 285 companies surveyed were formed:

Almost half of the biggest companies surveyed are the youngest: future wealth and market leadership is moving towards companies that have only existed for 40 years or so.

My recent articles have focused mostly on the foundations of 5G and the Edge Cloud - on the options of private or public 5G and where these two options interface, and on in-building 5G options, as two examples.

As we move further into the Industry 4.0 era - the transformation of traditional manufacturing and industrial practices combined with the latest smart technology - I'll be building on these foundations to look at the application and opportunities of 5G in more detail, in manufacturing and construction, automated factories, autonomous and connected vehicles, and in extended reality applications.

Australian businesses will be able to gain leverage from 5G leadership. As I noted in this earlier article, the benefits to enterprises will be commercial: agility, increased revenue, decreased costs, and market differentiation. We will go into how all of these play out in each of these vertical market industries in future articles.

More information and content on 5G and how your organisation can benefit can be found here: https://www.optus.com.au/enterprise/5g.

A version of this article is also published on the Optus web site.