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PPI: 5G Networks Could Add Nearly $3T to U.S. Economy By 2030

By Diana Goovaerts | March 10, 2016

The rise of 5G networks could just be the shot of adrenaline the U.S. economy needs.

According to a new report from the Progressive Policy Institute (PPI), next generation wireless networks have the potential to add roughly $2.7 trillion to the U.S. gross domestic product (GDP) by 2030. That figure equates to an average annual growth boost of 0.7 percent or an overall increase of 11 percent in economic output.

PPI said the new growth will be driven by the digitization of physical industries – like healthcare, manufacturing, agriculture, transportation – that will come with Machine-to-Machine (M2M) revolution.

“It appears likely that productivity growth in the physical industries could be significantly improved by infotech investment, and spending on telecom services, and tech goods and services—that is, all the key elements of the connected economy,” PPI’s Economic Strategist Michael Mandel wrote in the report.

PPI said the role of 5G networks in facilitating this economic growth will be to meet a massive explosion in demand for wireless bandwidth. Between now and 2030, the PPI has projected the capacity of mobile broadband networks will need to increase by a factor of 30 to 40 times to support the digitization of physical industry.

Expanding on a Cisco forecast that projected M2M traffic in the country will increase from three percent now to 11 percent by 2020, PPI forecast M2M traffic will rise even further to account for between 35 and 47 percent of mobile data communications by 2030.

But PPI said making these growth figures a reality won’t be a cake walk. The future depends heavily on how much spectrum the government clears for next generation networks, the report said.

According to the study, more than 1900 MHz of spectrum in the sub-millimeter wave bands and at least 1.2 million cell sites will be necessary to fully meet the M2M demands projected in the paper. Those figures are three and four times what is currently available, respectively, PPI said.

“Creating vastly more wireless capacity is essential for getting the United States out of the slow-growth trap we are currently stuck in,” Mandel wrote. “if policymakers fail to free up enough spectrum, or free up more spectrum for unlicensed rather than licensed operations, or impose regulations that reduce the return on investment that currently fuels spending on telecom infrastructure build-out, the likely outcome will be that the physical industries—which make up the greater part of the economy—will fail to achieve their productivity potential.”

Thankfully, the gears appear to already be turning in Washington.

The paper comes on the heels of the Senate Commerce, Science and Transportation Committee’s unanimous approval of a bipartisan bill that aims to free up more federal and non-federal spectrum for next generation wireless services.

The bill, dubbed the Mobile Now Act, aims to boost the amount of spectrum available for wireless broadband by incentivizing the forfeiture of federal spectrum and calls for the study of millimeter wave frequencies to determine the feasibility of deploying licensed or unlicensed wireless broadband services in those bands.


Filed Under: 5G

 

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