Creating Socioeconomic Value Through 5G
The GCC countries boldly embracing the 5G revolution are among the first countries to do so. Gone are the days when the region was a late adopter of technology; the Middle East's take-up of 5G deployment is running at full-speed, alongside the U.S., Asia and Europe. Several GCC cities are rolling out 5G to harness the potential social and economic benefits that superfast, ultra-connected networks can bring.
5G refers to fifth-generation wireless technology for cellular networks, which has been continuously evolving in terms of capacity and speed and is expected to enable unprecedented levels of connectivity.
The five key functional features that distinguishes 5G over 4G are: superfast broadband; ultra-reliable low-latency communication; massive machine-type communications; high reliability; and efficient energy usage. These features will enable technology applications that facilitate industrial advances and enhance citizen experiences, leading to a transformation in sectors such as transportation, manufacturing, health and public services.
An analysis of 40 use cases has demonstrated the potential socio-economic impact of 5G. The analysis showed that 5G can deliver social value across 11 key areas corresponding to 11 of the United Nations' 17 Sustainable Development Goals (SDGs). The key SDGs impacted are good health and wellbeing and industry, innovation and infrastructure.
Take, for example, the use case of Peloton Technology, a connected vehicle technology company. The team is developing a vehicle platooning system that enables pairs of trucks to operate at close following distances, with a goal of improving safety and fuel efficiency. Pulling in over $700 billion in annual revenue and accounting for 80% of all transported cargo, the trucking industry is ripe for innovation. 5G technology will allow for enhanced realtime data gathering and data analysis, which will ultimately reduce average fuel consumption by 7.2%.
Another example is Bright Machines, which manages an AI-powered, cloud-based software for factory operations that can reconfigure and run any number of physical production lines for assembly. It successfully deployed this solution on an assembly line for infotainment electronics consoles, which was manual and labor-intensive, limiting the number of units produced per hour with relatively high defect rates. The manufacturer replaced the assembly process with Bright Machines software, resulting in a faster production rate and reduced defect rates. Since such a solution relies on cloud-based software with a very large amount of data inputs, 5G technology will enable this software to be widely deployed across factories with assembly lines.
The potential socio-economic benefits of 5G have proved an irresistible allure for GCC governments. The transition from 4G to 5G networks has societal implications that justify the relatively high infrastructure investment required. Therefore, the regional rollout of 5G should take an “ecosystem” approach involving key stakeholders, which minimizes upfront costs across a range of sectors and parties for the benefit of the greater good.
Stakeholders must cooperate to fully realize the socioeconomic value that 5G can deliver and to unlock various use cases across multiple industry sectors. The 5G Ecosystem Cycle framework consists of six components: spectrum, infrastructure, devices, services, impact and security. The framework serves to outline the key focus areas and corresponding actions that stakeholders should take to overcome challenges and ensure the successful deployment of the technology. It also highlights how coordinated decision-making will have repercussions on the ecosystem's subsequent components.
For example, to address the heavy upfront infrastructure investment required, there is a need for new funding models for fiber network deployment and ownership. To address this, telecoms, network operators and public-private partnership organizations must come together to design policies and guidelines to promote 5G infrastructure, explore collaboration models of public-private infrastructure sharing and define investment requirements for infrastructure deployment.
Given the interdependencies of stakeholders throughout the 5G ecosystem, they should continuously engage in dialogue to facilitate and expedite the execution of the relevant actions. As the region moves from consumer-focused connectivity to hyperconnectivity, the challenges are considerable. However, the rewards will likely be exponential as it enters an economically diverse future.
In her opening speech, Arora announced the launch of the “Sheconomy”—the first economic digital portal of its kind dedicated to women worldwide. The portal will be available from next year and will allow businesses led by women to sell, share and exchange products and information from across the globe. “We want to bring a million women, who have something of their own to trade, to the portal once we do the launch,” said Arora.
Hoda Mansour, Managing Director of SAP Egypt, also announced the launch of the SAP Egypt Business Women’s Network (BWN), which she said would offer to help launch “Sheconomy”.
Golden age
Women make up almost half of the world’s working-age population of nearly five billion people. Therefore the more women enter the workforce, the greater the impact on the global economy. Egypt plans to increase women’s contribution to the workforce to 35% by 2030.
“Studies show that closing the gender gap in the workforce could raise global GDP by up to $28 trillion by 2025 and help increase Egypt's GDP by 34%,” stated Hala Al-Saeed, Egypt's Minister of Planning and Economic Development.
The minister stressed that Egypt has already made remarkable strides in female economic empowerment with women currently occupying around 45% of government jobs compared to a global average of 32%. The percentage of business ownership by women has also increased to around 16%.
Challenges and opportunities “Despite the fact that technology utilization will result in the loss of approximately 33 million jobs globally, it will lead to the creation of another 133 million jobs,” said Rania Al Mashat, Minister of International Cooperation as she spoke about restructuring policies in the 4th industrial revolution. “But the first to lose jobs in technology are women, which is why women need to be enabled through training and knowledge to become a part of the fourth industrial revolution.”
According to Nevine Kabbage, Minister of Social Solidarity, Egypt is working across three pillars to support women. This includes work in social protection, economic empowerment, development, and social change. Programs include “Takafol w Karama”, “Forsa” and “Mawada”.
“Women own 37% of established startups in Egypt, played an important role in the industrial sector, and supported economic growth,” said Neveen Gamea, Minister of Trade and Industry. She added that the Micro, Small and Medium Enterprises Authority was granted a “Gender Recognition Certificate”—an international merit awarded to public institutions working on gender equality and female empowerment by integrating gender policies into processes and projects.
Financial footprint
Countries are also working to boost financial inclusion among women. Mohammed Omran, Chairman of Egypt's Financial Regulatory Authority, has been among the initiators, as he recently applied an amendment to listing and delisting rules to encourage more female representation on Boards of listed companies and companies operating in non-banking financial activities.
Omran explained that international experiences related to gender diversity on corporate boards have shown better corporate performance. Also, indicators show that companies with more female representation achieve higher profitability and better financial strength. In addition, companies that take into account gender diversity on corporate boards prefer equity financing and are less reliant on debt.
Private companies with female representation on their boards and a mixed workforce (made up of at least 25% women) have achieved more than double the rate of profit growth and greater financial capacity, with 8% growth in return on equity and return on assets and 7% in return on sales.