Mobile technology, a catalyst for innovation and socio-economic development
Some 40 years ago we made the unimaginable possible by enabling people to make voice calls from anywhere. Fast forward to today and there are more mobile subscriptions than the number of people living on our planet.
Communications technology has gone from being a luxury to becoming a basic human need and for millennials and younger, connectivity is now nearly as important as the air they breathe.
We know that connectivity improves lives every day, including the small things many of us now take for granted, like using digital wallets in communities without traditional banking, smartphones to navigate our way across town, wearables to track our health and fitness, to big things that might once have seemed unimaginable, like doctors being able to make an accurate diagnosis of a patient remotely.
Unfortunately, this reality remains a dream for over one-third of the world’s population who are unable to leverage the social, economic, and environmental benefits that accompany broadband connectivity. With the requisite infrastructure investments, ecosystems, and policies, many more people can enjoy these benefits and we can transform the planet.
While earlier generations of mobile networks enabled voice and some basic data connectivity, fourth generation (4G) mobile communications, along with smartphones and their ecosystem of applications spawned a new App economy worth over six trillion US Dollars, or seven percent of global output, and has transformed the way we live, interact, and conduct business.
The trend towards digitalization was accelerated with onset of the Covid-19 pandemic. During these difficult times, we enabled two years of digital transformation in a matter of months. And the pace of acceleration has set the bar for the speed of innovation.
The confluence of the global pandemic and digital acceleration has increased our comfort with online collaboration and communication tools – using technology to shrink distance and simulate physical presence. And while we cannot eliminate the need for human contact, millions of people are now comfortable replacing physical events with virtual ones, opening new possibilities for how we work and live.
Simulation of physical presence online will become part of the new world in what some call the metaverse, and others Web. 3.0. As with the early digital disruption, the asset light industries of entertainment and media are poised to lead this transformation.
With 5G, however, the transformation of asset heavy enterprise will usher in a new form of industrialization based on digitalization.
The convergence of digital-physical world will provide a vast number of benefits to product development and creation – allowing control of physical objects in a virtual world. ‘Digital twins’, virtual replicas, will be used in the automation of industry, helping with predictive maintenance in smart factories, and optimizing logistics flows.
Future connectivity will allow real-time collaboration regardless of location and therefore broaden access to expertise and talent pools, wherever they are in the world, making the brain-drain a relic of the past.
Mobile drives economic development
The role of mobile technology as a catalyst for innovation and socio-economic development cannot be overstated. Studies conducted by Ericsson and Imperial College in London have shown the clear link between mobile broadband penetration and GDP growth – a 10 percent increase in the mobile broadband penetration drives 0.8 percent increase in GDP.
This effect is even stronger in lower-income countries and hence the potential to leapfrog in the economic development by investing in mobile broadband infrastructure.
A catalyst for tackling the climate crises
Despite these economic benefits, digital transformation is also a contributor to the urgent climate challenge that confronts humanity, particularly through the energy consumed by the networks and data centers we build and operate.
While the ICT industry is responsible for 1.4 percent of global carbon footprint, research by Ericsson shows that ICT solutions can enable reductions in global greenhouse gas emissions by up to 15 percent.
Foundational pillars for transformation
We see three foundational pillars for enabling digitalization: the need for a robust and reliable network infrastructure; a conducive regulatory environment to encourage investment; and the evolution and growth of ecosystems.
Digital Transformation requires at its base an infrastructure that is scalable, reliable, dynamic, resilient, and secure, with reduced energy consumption.
Resilient, scalable infrastructure
Fast growing countries in the Middle East like the United Arab Emirates are investing substantially in their infrastructure capabilities to enable economic diversification and growth. In a bid to diversify their economies, these nations are now investing in greenfield Industry 4.0 initiatives.
Governments must incentivize pervasive, high quality infrastructure deployments. Spectrum price in the short-term should not be prioritized over long term value generated. Advanced countries in the Middle East have led the way on this and it is beginning to pay off in improved performance in many of the global infrastructure leadership indices.
A spectrum policy that drives development
From a government and regulatory standpoint, the biggest lever is the timely availability of ample, cost-effective, and harmonized spectrum. Spectrum is the lifeblood of mobile communications. It is a limited national resource and starving the mobile industry of spectrum will slow down the pace of digital transformation.
It is imperative to maximize spectrum availability and develop a clear, reliable, and long-term timetable for its assignment. Unused or underused spectrum does not add value to any country, and long-term clarity of spectrum licenses is necessary to encourage infrastructure investments.
Furthermore, spectrum license conditions should incentivize investment with the flexibility to use allocated spectrum for multiple technologies to reduce cost and increase agility. It is critical to uphold the principle of technology neutrality, to stimulate investments in infrastructure and enable innovation.
Finally, the ability to work with a broad cross-function of collaborators towards a common goal will become the norm, ending inherited ideas of competition, traditional boundaries, by focusing on true interconnectivity.
Ericsson is committed to open standards that enable mobile innovation to thrive. We will bring together partners across eco-systems to collaborate, innovate and kindle new ideas and evolve ways in which we expose network functions that enable digital innovations to scale. However, a country must ensure technology neutral policies so they can leverage the innovation brought by new generations of technology.
An opportunity to leap-frog development
Digital Transformation affords emerging economies a massive opportunity to be major players in the upcoming 4th industrial revolution based on world-class digital infrastructure and platforms for innovation. Governments, regulators, telecom industry and application ecosystems have key roles to play in enabling this step-change in development.
Nelson, vice president of Ericsson Middle East and Africa