Leveraging digital infrastructure to spur economic recovery
In extraordinary times like these, the value of fixed and mobile networks as the backbone of our society is more apparent than ever before. Creating a comprehensive economic recovery plan involves much more than simply figuring out how to get back to the pre-pandemic status quo. It’s crucial that the investments governments make to repair the short-term damage also contribute to sustainable economic development in the long term.
I am greatly encouraged by the fact that the EU Recovery Plan acknowledges this, specifically noting the need “to invest in more and better connectivity”, accelerating 5G deployment as “it will have spill-over effects across the whole digital society and increase Europe’s strategy autonomy”. The same line of thinking was also endorsed by European telecoms Ministers in the Council Conclusions on June 9.
Commenting on the recently proposed EU Recovery Plan, European Commission President Ursula von der Leyen explained it well: “The recovery plan turns the immense challenge we face into an opportunity, not only by supporting the recovery but also by investing in our future: the European Green Deal and digitalization will boost jobs and growth, the resilience of our societies and the health of our environment. This is Europe's moment. Our willingness to act must live up to the challenges we are all facing. With Next Generation EU we are providing an ambitious answer.”
According to the plan, EUR 750 billion is targeted toward investments in the twin green and digital transitions, with a significant portion dedicated to digital infrastructure where 5G deployment plays a crucial role.
In my opinion, putting this plan into action is key to building a better normal underpinned by connectivity and strengthen Eu’s digital future. Governments and policymakers must recognize the central role of digital infrastructure in the immediate economic recovery, Additionally, governments have much to gain by focusing on the long-term economic and social benefits that 5G networks bring and the ecosystems it will unlock, as opposed to immediate financial gains such as spectrum fees.
We are convinced that high-speed mobile connectivity like 5G will be instrumental in providing a stable platform for innovation and economic growth, not least when we factor in the big potential that is still untapped by unlocking ecosystems and digitalizing our industry verticals such as the health sector, energy and utilities, transportation, agriculture, etc. We believe that the business opportunity of leveraging 5G to digitalize industries is estimated to be over USD 1.2 trillion by 2026. Furthermore, we see that 5G and connectivity will also play a crucial role in delivering on Europe’s twin priority: the green transition, notably through 5G’s potential to reduce global emissions by 15 percent.
To achieve common objectives without damaging market incentives, governments need to collaborate with communications service providers to encourage infrastructure investment. There is a multitude of actions that can be taken, for example, investments in passive infrastructure, trading license fees for coverage obligations, purchase of capacity for public services. We have also seen a lot of governments providing temporary spectrum to handle capacity increase during COVID-19 crisis.
The learning from the introduction of 4G indicates that early adopters of 5G technology are likely to enjoy industry leadership, just as the early adopters of 4G did. Investments in 5G infrastructure is an incredible opportunity for governments around the world and we believe that it will have a massive impact on economies. The benefits of 5G investments will be experienced both by today’s workforce and by the workforce of the future, as we estimate that by 2030 two-thirds of the global workforce will use the 5G platform.
The critically important SME segment
Small and medium-sized enterprises (SMEs) are certain to play a critical role in economic recovery, as the SME sector employs two thirds of the continents workforce and generate more than half of the total turnover. With this in mind, there is an urgent need to increase awareness among SMEs and public authorities about the societal and economic benefits of the digital platform and specifically 5G. 5G was made for innovation and it has an exponential potential in boosting SME productivity, as well as bringing a new range of possibilities to SMEs to emerge stronger post-crisis. By creating the right investment instruments to foster a well-designed digitalization of the European SME sector will strengthen Europe’s competitiveness.
Resources for forward-thinking policy makers
There are plenty of resources available for governments that want to learn how to leverage digital infrastructure in their economic recovery plans. The ITU’s Global Network Resiliency Platform (#REG4COVID) is one great example: it’s a place where regulators, policy makers, industry players and other interested stakeholders can share information, learn about initiatives and measures introduced in other parts of the world. The primary goal is “to ensure that communities remain connected, that we support one another, and that we harness the full power and potential of ICT during this crisis and to prepare for the medium and long-term recovery from COVID19”.
The Broadband Commission has also taken a proactive approach to helping governments, industries and communities cope with the pandemic and plan for the recovery. Its Agenda for Action outlines the urgent measures required to secure capacity of the critical connectivity for hospitals and transport, and boost digital access and inclusion.
I also personally engage a lot with the World Economic Forum on activities aimed at better leveraging digital technologies and infrastructure during this pandemic, and especially how to support the recovery with digital tools.
What all of these examples have in common is that they all highlight the shared responsibility of governments and industry players to make tomorrow better than today, and illustrate what we can achieve when we work together.
Charting a resilient, sustainable and fair path to recovery
On the day when the EU Recovery Plan was proposed, Maroš Šefčovič, the EC Vice President for Interinstitutional Relations and Foresight, said this: “The recovery will need strong policy direction. The adapted Work Programme, reflecting the new reality, shows that we will focus all our actions on overcoming the crisis, jumpstarting our economy and putting the European Union firmly on a resilient, sustainable and fair recovery path. It will help us rebound stronger.”
With the help of smart, long-term investments in infrastructure – including in ‘more and better connectivity” and with a rapid deployment of 5G networks’ – I’m confident that the EU (and any region that follows a similar approach) can succeed in coming back stronger than ever post-pandemic. Accelerating EU’s digital and green transformation must remain the focus of the upcoming negotiations, and only by stepping up our collective efforts, we will be able to achieve Federal Chancellor Angela Merkel’s vision “we want Europe to represent innovation and sustainability in the world”.
Read our blog post by the Head of Ericsson Research about necessity and networks – today’s co-parents of invention.