According to a study by Ernst & Young (EY), companies in the Asia-Pacific (APAC) are leading the demand for 5G and the Internet of Things (IoT) over their counterparts in other markets. The Reimagining Industry Futures Study 2021 found that the COVID-19 pandemic sped up the plan and desire to adopt new technologies with 73% of the respondents either investing or planning to in upcoming years.
The EY study questioned over 1,000 enterprises from Europe, Asia and the Americas to research the impact of emerging technologies on businesses. 65% of the respondents thought new tech would help their companies recover from the pandemic, explaining why there’s a shift in the investment landscape in APAC. Moreover, there’s higher interest in IoT in Southeast Asia at 27% than in Europe and the Americas, where 15% of enterprises are interested.
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These differences are not just in line with the APAC region’s goal of digitally transforming their countries; they’re a response to the disruption to everyday life and business caused by COVID-19. Many countries see 5G as the catalyst for change and the solution to their financial and technological needs.
Adoption of 5G technology
A whopping 74% of organisations believe that 5G technology will be part of their business processes in five years. 5G is the fifth iteration of the wireless technology standards for mobile networks. This new technology will revolutionise how companies work and bring broader solutions to the global marketplace.
Some of its benefits include high data transmission speeds, network signal stability and consistency. It handles signal obstructions better, requires fewer infrastructures than 4G and is easier to upgrade because it is software-based. In addition, 5G will make IoT possible due to the stability of multiple connections and fewer energy requirements.
By 2025, 23% of mobile connections in the APAC region will be on 5G networks. Nine markets have already launched, while 12 others are planning to do so. Singapore, Japan and South Korea are some of the countries already using mobile 5G services.
Telecommunications companies (Telcos) are also keeping up with the recent developments. As per the GSMA’s Mobile Economy report, they’ll be investing $331 billion USD in 5G until 2025.
IoT refers to a network of devices that communicate with each other and the internet through a wireless connection. These smart devices contain chips, sensors, software and other technology to gather data, converse through networks and perform specific tasks.
Last year, Vodafone released its IoT Spotlight 2020 report, which showed that integrating IoT is helping businesses with innovation, productivity, continuity and environmental sustainability. It is reinventing customer experiences while guaranteeing future business success.
According to the report, APAC companies with IoT solutions experienced benefits including reduced operating costs, increased revenue and better productivity. Some reported getting about 20% worth of savings on their administrative expenses.
Unfortunately, the adoption of IoT in Southeast Asia still faces many constraints, such as technical issues, budget limitations, lack of enthusiasm and uncertainty about the industry.
Investing in 5G and IoT
As it stands, there’s much potential for integrating 5G and IoT into global markets, especially in the Asia-Pacific region. The digital economy is the future, and it can tackle many organisational, societal and governmental issues. Even so, 38% of the respondents in the EY survey feel anxious integrating 5G in their business due to its complexity, and it won’t be easy to combine it with current technology.
Communicating the value of 5G to the public and businesses has become an issue as well. It’s hindering the implementation of IoT in Southeast Asia because 1 in 5 companies doubt the expertise of others in the industry.
There’s also the challenge of an organisation changing too slowly or quickly. In the former, they will get left behind, and if they go too fast, they might make mistakes. Deploying tech supplies rapidly to meet demand is now a vital issue, and businesses have to adapt to customer needs and price their solutions competitively.
Shifting from 4G to the software-based 5G also creates the potential for cyber hacking. This level of interconnectivity puts devices at higher risk of network disruptions, data theft and IoT creating network vulnerabilities. An expanded network will make it difficult to detect system invasions, therefore, exposing the user to risks.
With that said, people can resolve these problems with time and continuous innovation. Governments need to do more in their quest to transform their countries and enterprises digitally. They can modify the regulations to boost the investment landscape in APAC and inspire more innovation. Plus, 79% of businesses want to collaborate rather than merely buy things, which bodes well for the region.