5G Technology: The Next Industrial Revolution
by Phil Love, Pactola President/CEO
CAP Senior Partner
4/10/2019

Most of us have heard of the upcoming advance of the 5G network that is touted by cell phone providers. But do you know what this is and how this could change our everyday lives? Lately, I’ve found myself following the developments.

The “G” in 5G stands for generation. The first generation was the ability to have sound on cell phones. Some of you may remember your first cell phone. Mine was in a bag the size of a small suitcase, with an antenna that went on top of my car attached with a ten foot long cord to the carry-on bag. Those were the days! The second generation gave us the ability to do texts. Third generation gave us the internet on our phones and surfing the web. The fourth generation took all the previous three and made the system about ten times faster. 

5G takes the 4G data and now accelerates the speed by ten-fold. 4G can download info at around two gigabytes per second. 5G can download data by 20 gigabytes per second or faster. The Chinese company Huawei claims that an 8 GB movie that took seven minutes to download, can be downloaded in six seconds in a 5G environment. Basically, 5G communicates in real time with a lag of one millisecond. The ability to transmit and receive data live, and in real time, provides huge opportunities. Driverless cars would have the ability to know what all other vehicles on the road are doing. Remote doctors could consult in real time with medical specialists all around the world as they work on a patient. Remote rural communities can have the same access to information as those in large, well-wired cities. The possibilities with transmitting data immediately are endless. Some have called this the next industrial revolution. 

5G technology requires an entirely new infrastructure. The signal connects with computers with more of a line-of-site and has a much shorter distance than what we have with 4G. As such, more 5G transmitters, which are about the size of a notebook, would have to be installed every few hundred yards or so to have a solid network. The large US cell carriers are expecting to have 5G networks available in large scale by 2020. Samsung is seeking to open 5G throughout South Korea later this year.

This industry is huge and could eclipse $1.26 trillion in size by 2026. China is the fastest growing country in implementing 5G. GSMA estimates that by 2025, China will have 40 percent of all global 5G connections which could be up to 3.2 percent of China’s entire GDP, 8 million jobs, and 2.9 trillion in yuan by 2030. Spending in R&D by Huawei on 5G is more than three times the combined 5G R&D spending of the three major US equipment manufacturers. China’s spending on 5G is a large part of their “Belt and Road” initiative to link China with various countries throughout Asia, Africa, and Latin America. China is also providing equipment to 60 different countries. 

Newt Gingrich has an informative podcast called “Newt’s World,” and I would encourage you to listen. In one of his recent episodes, he had General Robert Spaulding, a former Senior Director of Strategic Planning for the National Security Council. One concern that was brought up is the impact of big data and technology privacy. 5G will provide data that anticipates what you want and need. Some may think it would be okay for their connected refrigerator to send a message to your phone to pick up eggs when you are low, but personally, I still think that is a bit weird. Next, my fridge will chastise me if I sneak down for a midnight snack!

But, what do you do when a totalitarian regime with control of some 5G network uses data available on you to influence people around you in ways that you did not intend? What if various “artifacts” could be left on the web that could cause a breakdown of social order? If nefarious people control the data, they may be able to have the same impact weapons of war have without ever firing a weapon. What if the manufacturer of your equipment refuses to allow you access to your money, based on their views?

Obviously, there are security and privacy risks that must be mastered. 5G has the potential of revolutionizing our lives; the challenge is how to get a network developed when private sector companies still have 4G tech investments to work through. They are also subject to the shareholders and the performance quarter by quarter. In the past, the government sometimes sees this as the responsibility of the private sector. However, we are in a tech race that rivals the space race that started when Sputnik went into orbit. The country that dominates 5G technology and prepares for the next generation after that can dominate militarily, economically, and in sheer knowledge.

 

Pactola is a CUAD CAP Senior Partner and a subsidiary of Midwest Business Solutions. We are a Credit Union Service Organization that is dedicated to commercial and agricultural lending and serving multiple credit unions and banks throughout the United States with our services. We help our partners increase their earning assets and profitability. By doing so, we help them become a relevant financial force in their community increasing social good through helping businesses and farmers. Visit our website to learn more. You can contact Phil Love, Pactola CEO at phil.love@pactola.com or 605.223.5154.

 

 

 

 

 

 

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