How 5G is giving businesses the innovation edge
We all know the word “innovation” is overused and has evolved into a generic term constantly banded around by execs, marketeers, and even politicians. That said, anyone that works in tech also knows it’s the lifeblood of our industry. To drill through the fluff, let’s look at four types of innovation strategies that businesses typically pursue: radical, disruptive, architectural, and sustaining. This helps us better quantify risk, gauge the kind of investment needed, and potential competitive outcomes. I’ll then share some examples of how 5G has fueled each.
1. Sustaining innovation
Not all innovations explode as a big bang. They often emerge gradually and steadily. Such innovations often occur without us even realizing it, although the best approach is through a planned and deliberate strategy. One of the best-known strategies in this class is Kaizen, Toyota’s answer to continuous improvement of the Toyota Production System (TPS).
Kaizen requires that employees identify and propose several minor, incremental innovations each year. It could be as small as adding a magnet to a screwdriver on the manufacturing line, saving a simple second when connecting a part to a vehicle. Such proposed changes are evaluated, adapted, and applied in a managed process. The result of this approach has been a consistent improvement in the company’s manufacturing process with increasing yields and lower re-work. It might not sound sexy, but simple changes made over time improve a firm’s competitive posture and make it harder for new market entrants to catch up. Firms that don’t have such programs will lose their competitive edge over time.
How 5G has spurred sustaining innovation for Toyota
XR Today recently published a case study detailing the use of extended reality (XR) by Toyota Material Handling (TMH). They needed to deliver immersive and engaging training to technicians in about 1,000 dealerships across North America. They combined XR with Metaverse technologies, digital twins, and Meta’s Oculus Device which allowed them to place their trainers in virtual spaces and receive training in using various pieces of equipment. Vehicles were created in 3D and machines were pixel perfect and interactive, leading to a digital recreation of their Columbus factory. This solution required not only technical components but also a complex change management process. Overall, the solution saves Toyota and their dealers time, cost, and material waste.
Two important questions arise from the TMH use case. Firstly, is the Metaverse a reality? It seems like the recent announcements from Meta, Disney, and Microsoft based on Wall Street’s reaction to Metaverse investments signal that the Metaverse is not going to be ready any time soon. But according to HBR, this couldn’t be further from the truth. In fact, here at Ericsson we have partnered with Omniverse to build a city-scale digital twin and simulation environments. These environments help us understand optimum antenna placements and bring those learnings into the real world.
The second question is whether there is really a need for 5G to provide these services. In many cases, technologies like Wi-Fi have been enabling XR devices to connect to the servers and systems needed to support such solutions. But taking a forward-looking view, high-capacity indoor networks will be needed to support hundreds or thousands of users – and will need to be built differently. Meeting these future requirements is something 5G is well suited to based on its access to licensed spectrum, support for network slicing, and the native support for essential security features. Bringing high bandwidth, low latency, neutral host (multi-operator) 5G indoors will become more essential as these solutions cross-the-chasm from early adopters and niche applications into the mainstream.
2. Radical innovation
Radical innovation tends to be the category that people think of most when they think about innovation. This is where huge, world-changing events take place. Novel products or knowledge arise from programs focused on breakthroughs, although they are often expensive and highly susceptible to failure.
There are several exemplary companies in this category. Think about how Netflix’s move to mail service DVDs impacted Blockbusters, how the iPhone impacted RIM (Blackberry), or how John Deere impacted farming by equipping tractors with sensors. You could be forgiven if you haven’t heard about John Deere’s radical innovations (if you are from outside of the farming industry) so let’s talk a little more about this.
In 2012, John Deere started adding sensors to its tractors so that farmers could track and monitor their yields. This led to big data driving farmers’ decisions, thereby changing the industry forever. But this “softwareification” has also led to many other innovations in this same category, and 5G is becoming more critical to the industry.
How 5G enabled radical innovation for John Deere
According to Jason Wallen, Principal Architect at John Deere’s Global Information Technology Group, John Deere’s factories have over 1,000 miles of ethernet cable connecting everything. These cables physically tether their production facilities reducing the ease of reconfiguration and increasing the cost of making changes. This makes for a serious challenge especially when coupled with an anticipated 20 times growth in sensors on the shop floor. It’s a problem that other technologies such as Wi-Fi couldn’t solve.
By adopting private 5G, John Deere could manufacture the most advanced farming equipment ever and solve its evolving manufacturing needs. Doing this started with an investment of USD 550,000 for five CBRS licenses across Illinois and Iowa and deployment of 5G private networks. But the company’s adoption of 5G didn’t stop here.
John Deere’s 8RX tractor fitted with a 60 ft, 24-row planter has more than 300 sensors and 140 controllers processing 15,000 measurements per second, per machine. This data is streamed to the cloud where it’s processed, resulting in critical insights being delivered back to the farmer as well as real-time parameter updates being made to the equipment. Maintenance information is also sent to dealers allowing them to connect remotely, a feature that was essential during the 2020 global pandemic.
To give an idea of the amount of data John Deere is processing, in one spring planting day, between 5 and 15 million sensor measurements are processed per second resulting in more than 100 MB of data per second being received in the John Deere Cloud.
All of this has been achieved using 4G/LTE modems, but the lower latency and higher bandwidths offered by 5G will enable John Deere to provide fully autonomous tractors.
3. Disruptive innovation
Disruptive innovation is where all businesses want to be, and where no business wants to fall behind. In my experience, it’s also one of the most misunderstood forms of innovation. Havard Business School Professor Clayton Christensen defines it as a process by which a product or service initially takes root in simple applications at the bottom of a market and relentlessly moves upmarket, eventually displacing established competitors. Normally this is usually when a company takes an existing product and makes it more accessible and affordable to more people.
One of my favorite examples is the advent of the mini-mills and how they changed the US steel industry. But there are many other examples, such as how computer disks evolved from main-frame tapes to much lower capacity 5.5 inch and 3.25 inch drives. In both cases we see that innovations can fly under the radar due to a perceived inability to compete against superior products based on a traditional metric. However, in this case computer disks were really competing on a new, non-traditional, metric (such as product size rather than storage capacity; to meet the new personal computer trend and not the existing main-frame market).
Finding a disruptive innovation on its own is not enough. To fully realize it, a firm has to overcome the highly challenging task of translating it to the mass market. This topic is thoroughly discussed in Geoffrey Moore’s book “Crossing the Chasm” which has many notable examples and is well worth a read. Emerging solutions like Digital Twins will enable small companies to supply a try-before-you-buy approach to novel products and enable mainstream customers to see and feel how physical products and services could be applied to their needs. Economically translating a company’s benefits into the language of their customers is a task technology does well!
One of the key takeaways from disruptive innovation is that a firm needs to constantly disrupt itself. If not, another company will. Just look at Kodak’s decision to shelve the digital camera to protect its chemical business. Inevitability is…. well… inevitable. My recommendation is for companies to embrace the opportunities of 5G in their business before their competitors do.
4. Architectural innovation
My friend and colleague Shane McClelland recently wrote that bringing 5G indoors may allow for a new breed of meta-services, meta-products, and even entire enterprises formed in the virtual ether. Such a shift in the way products or services are offered, or business is conducted, changes the DNA of a firm’s operational and business model. And this is architectural innovation.
In the sustaining innovation example, I discussed Toyota’s use of the Metaverse and AR to change the way it delivered and supported technicians across 1,000+ dealerships. This type of sustaining innovation could also be considered a form of architectural innovation in that it enabled Toyota to change the way it works. This new operational model drives cost reductions and value, and improves the customer experience.
So, we can now see that 5G is enabling firms to not only change their products and services but also their operational and business models. It is impacting every layer of the business.
More examples of how 5G is providing a true innovation platform
Over the last few years, we have seen the 5G exploited in many innovative ways — far too many to discuss in this blog. I have put a few of these in the table below in the hope they inspire ideation. As you see, 5G is being used in ways not imaginable with previous generations:
- 5G Steel: the first enhanced mobile broadband use cases to decarbonize the steel industry are live in in France
- Ericsson’s energy-smart 5G site in Texas set a new standard for sustainable network solutions
- FOX teams up with Intel and AT&T to deliver 4K over 5G at 2018 U.S. Open
- Purdue University Airport deployed a 5G network to serve as a “lab to life” proving ground for academics, researchers and businesses to develop commercial solutions to improve operations and security at airports
- National Science Foundation conducts 5G drone research to support smart agriculture
- 5G APIs are delivering a new era of 5G-native gaming platforms
- Ericsson and MIT explore how next generation could enable “zero-energy” devices
- Ericsson USA 5G Smart Factory reduces energy consumption by 24 percent and indoor water usage by 75 percent. The factory also uns on 100 percent renewable electricity!
- Ericsson and PowerLight demonstrate world’s first wireless powered 5G base station
- Nutrien drives higher production of key fertilizer ingredient (needed to grow more food for the world’s expanding population) by enabling reliable data and voice communication across hundreds of kilometers of underground travel ways
- Proptivity deploys new solution to vastly improve visitor experience in public spaces like shopping malls and offices
Indoor 5G is also for small enterprises with constrained budgets
Here at Ericsson, we recognize that 5G is impacting businesses like never before. It’s our responsibility to bring this innovation platform to all firms just like Bill Gate’s goal of “a computer on every desk and in every home”. But until now, 5G systems have only been accessible to cellular service providers and large organizations. To address this disparity, we’ve introduced a range of products including the Indoor Fusion Unit. This brings Indoor 5G to smaller buildings at a lower cost, democratizing 5G.
However, simply bringing hardware is not enough. These solutions need to be flexible and support a range of capabilities from both IT and OT perspectives. Solutions must also support multiple CSPs, especially if a firm has adopted a Bring Your Own Device (BYOD) program for their staff or expects to serve visitors. Ericsson’s Radio Dot System enables multiple service providers to connect to one indoor 5G system to ease deployment and maximize reach – and supports the same features available in the world’s most advanced 5G networks.
Whatever your innovation strategy or industry, Ericsson is here to help you realize your new potential. With Ericsson’s neutral host capable Radio Dot System (RDS) and Indoor Fusion Unit, indoor 5G can fuel your innovation strategies and propel you into a leadership position against your competitors. Reach out to us and find out what this really means for you!
Learn more about Ericsson’s leading indoor 5G portfolio and what it can do for your business
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