5G capabilities have met or exceeded the expectations of most early adopters and organizations are optimistic about the opportunities it offers, according to the Capgemini Research Institute
Paris, June 22, 2021 - According to o report " Accelerating the 5G Industrial Revolution: State of 5G and advantage in industrial operations " released today by the Capgemini Research Institute , industrial 5G adoption is still in the ideation and planning phase, with only 30% of industrial organizations having moved to the pilot stage or beyond. This means that there is a large window of opportunity for telecommunications companies and industrial organizations that have yet to be made.
Signaling a paradigm shift, 40% of the industrial organizations surveyed expect to launch 5G at scale in a single location within two years, and the experience of early adopters may persuade others to make the move. 5G trials and initial deployments are delivering strong business benefits, with 60% of early adopters saying that 5G helped them achieve greater operational efficiency, while 43% said they experienced greater flexibility.
The study also found that industrial organizations are optimistic that 5G will increase revenues by enabling the introduction of new products, services and business models. In fact, 51% of industrial organizations plan to leverage 5G to offer new products and 60% plan to offer new services enabled by 5G.
In addition, industrial organizations are aware of the role of edge computing in their 5G initiatives and consider it essential to realize the full potential of 5G. 64% of organizations plan to adopt 5G-based edge computing services within three years, driven by the increased performance, reliability, data security and privacy it offers. More than a third of industrial organizations in all sectors surveyed prefer to deploy private 5G networks, with interest in private 5G networks led by the semiconductor and high-tech sector (50%), followed by aerospace and defense (46%).
Challenges remain for widespread adoption
The report highlights that in order to make the most of 5G's potential, organizations will need to face a number of challenges, including:
- Integrating 5G with existing IT networks and systems: organizations are finding that the lack of standardized and interoperable solutions results in longer assembly and testing times;
- Define 5G use cases and estimate their return on investment, especially in brownfield environments, where a return needs to be measured against existing options such as wired connections and the cost of replacing cables;
- Cyber security management due to difficulties in selecting reliable or qualified suppliers, anticipating the security impact of different network deployment scenarios and lack of internal processes to reduce risk exposure. Up to 70% of the industrial organizations surveyed see cyber security management as the main challenge associated with 5G implementations;
- Orchestrating a multi-vendor environment to provide the various functional components that industrial 5G solutions consist of is another challenge. Up to 69% of industrial organizations see identifying, integrating and managing multiple suppliers as a major barrier.
G for green?
5G offers many direct and indirect environmental benefits through its inherently energy-efficient design and its ability to enable use cases with a focus on the environment and sustainability. But industrial organizations are also aware of areas of environmental concern and are already considering ways to address them. More than half (53%) of the industrial organizations surveyed say that reducing the environmental impact of their 5G deployments is a priority, while 67% plan to take into account the sustainability credentials of 5G operators, vendors and suppliers as part of their 5G purchasing decisions.
"Industrial 5G is a key catalyst for unlocking the potential of smart industry and accelerating data-driven digital transformation," comments Fotis Karonis, Group Leader of 5G and Edge Computing at Capgemini. "Companies need to take advantage of the benefits of 5G, engaging with the ecosystem to harness shared experience and co-create innovative and sustainable solutions for tomorrow. An element of iteration is necessary, but organizations should seek to leverage the 5G ecosystem to jointly test solutions and progress with full-scale 5G adoption, adjusting the approach as the ecosystem evolves."
Organizations need to determine the ideal network model, the right set of partners and the most impactful use cases that meet their needs when implementing 5G. Telecom companies, in particular, need to quickly develop key capabilities to move away from being connectivity providers and towards vertical-specific solution providers. Telecom companies are already aligning their enterprise 5G strategy with the demand for private 5G networks, the report cites: 63% have launched industry-grade private network solutions and 86% of the remainder plan to launch such offerings within two years. Edge computing is being seen as a critical part of this strategy: 37% of telcos already offer edge computing services based on 5G and 61% plan to do so within three years.
Methodology
Capgemini's findings are based on a primary survey of senior executives (board level and above) from 1,000 global industrial organizations that intend to adopt 5G. In addition, 150 senior telecom executives from 75 telecom companies that have deployed or are planning to deploy 5G networks were also interviewed. Capgemini also conducted in-depth interviews with 25 experts from large industrial organizations and telecommunications companies that are working on 5G, as well as other participants in the 5G ecosystem. The research builds on Capgemini's 2019 study on 5G in industrial operations, which explored industrial organizations' appetite for 5G adoption.
To read the full report, click here.
About Capgemini
Capgemini is a global leader in partnering with companies to transform and manage their businesses by harnessing the power of technology. The Group is driven daily by the purpose of unleashing human energy through technology for an inclusive and sustainable future. It is a responsible and diverse organization of 270,000 team members in almost 50 countries. With its strong 50-year heritage and deep industry expertise, Capgemini is trusted by its clients to address the full breadth of their business needs, from strategy and design to operations, powered by the innovative and rapidly evolving world of cloud, data, AI, connectivity, software, digital engineering and platforms. The Group reported global revenues of €16 billion in 2020.
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About the Capgemini Research Institute
The Capgemini Research Institute is Capgemini's in-house think tank on all things digital. The Institute publishes research on the impact of digital technologies on large traditional companies. The team draws on Capgemini's worldwide network of experts and works closely with academic and technology partners. The Institute has dedicated research centers in India, Singapore, the United Kingdom and the United States. It was recently ranked first in the world for the quality of its research by independent analysts.
