How next-generation connectivity will give UK businesses the edge
New research commissioned by Osborne Clarke reveals UK businesses must overcome significant barriers to embrace the next era of connectivity.
If we were to fast forward ten years, we would see that the tech-led future we have all been promised will be predicated on a new level of connectivity. This next-generation of connected technology, particularly fifth generation mobile networks (5G), will bring about huge changes to the way we work, live, communicate and travel. Standards for the fifth generation of wireless technology will not be finalised until the World Radiocommunications Conference in November next year, but the claims being made for it are impressive: lightning fast speeds, incredibly low latency and the capacity to handle massive numbers of connections simultaneously.
The possibilities, as a result, are endless. Harnessing the benefits of next-generation connectivity will require investment, strategic initiatives, new partnerships, and redesigned business processes and even business models. Those that embrace it now will find they have the competitive edge in this new era of connectivity.
What do businesses stand to gain from greater connectivity?
The Internet of Things (IoT) is set to be one of the main beneficiaries of the next generation of connectivity, and business executives are very aware of its capabilities. In fact, four out of five respondents in a recent study we commissioned with The Economist Intelligence Unit which polled C-Suite and senior executives from 11 countries said that IoT would have a significant impact on their business in the next five years.
The opportunities that IoT presents are countless; connected buildings, vehicles and infrastructure such as utility networks bristle with sensors, actuators, meters and other devices that use connectivity to report on their status and respond as data is collected. This data can provide insights into customer behaviour and business performance, allowing businesses to adapt their models and best cater to their customers’ needs. 86% of UK executives in our study said they see data analytics as a source of new opportunity between now and 2023, and IoT promises to deliver a step up in this field.
Similarly, greater levels of connectivity will also ramp up the potential for AI tools to respond immediately to real-time data. AI will be key in transport and logistics, for example, enabling connected vehicles and robots to navigate their surroundings autonomously, avoid collisions and learn from errors in order to refine future responses or actions. However, it’s not only the transport and logistics sector that will benefit; almost three-quarters of UK respondents, across all sectors in our study, consider AI as an opportunity for their business in the next five years.
Preparation is key
It was clear in our research that senior executives in UK businesses are excited about the impact next-generation connectivity will have on their business. In fact, out of the countries we surveyed, UK respondents were the most likely to believe that greater connectivity will be more important in the next five years (92%).
However, in order to reap the rewards, UK businesses face a number of roadblocks. One of the main challenges businesses face when adopting new levels of connectivity is ensuring they have the right talent and skill-set. This obstacle appeared to be most apparent in the UK, where business executives here were the most likely to say that they do not have the talent or skills that they need to capitalise on next-generation technology. Investing in talent will need to be high on the agenda for businesses in the next five years.
Cost, too, was a concern for UK businesses as nearly half of UK respondents highlighted high costs of investment as a significant barrier to the adoption of next-generation connectivity. Furthermore, 70% believed that these costs would cause their organisation to avoid or withdraw from greater connectivity in the future. Organisations might be fearful that there may not be sufficient return on their initial investments, but businesses will regret not having taken action sooner when they see their rivals reaping the rewards.
Preparing for 2023: what do businesses need to do?
It won’t be long before the next-generation of connected technologies becomes an everyday reality, so UK businesses must act quickly if they are to capitalise on the opportunity and gain the competitive edge in the golden era of super-fast, always-on, ubiquitous connectivity. Here, I recommend four steps businesses should be taking in order to prepare:
- Adopt a ‘fail fast’ approach: This may involve a trial-and-error process by which you test out different solutions and quickly cut your losses if they do not pay off. Once you’ve cracked it, it does not take long for connectivity to increase productivity, boost revenue or eliminate inefficiencies.
- Invest in talent: Hiring new talent will breathe fresh life into your ideas and is the key to unlocking the potential of next-generation connectivity.
- Forge new partnerships: 80% of UK business executives said they expect to have an increased reliance on real-time data from third party sources and systems in the next five years. Forming partnerships with third parties will enable businesses to fully capitalise on connectivity, so long as they are wary of data sensitivity and confidentiality.
- Get the security basics right: There is no doubt that with greater connectivity comes the greater risk of hacking. Yet there are some simple, often overlooked, ways in which you can protect your business: changing default passwords and upgrading to the latest software is a good start. A disciplined approach to IoT is essential.
Jeff Travers, head of IoT at Ericsson, stated: “Boardrooms, worldwide, are addressing how connectivity might change their engagement with customers and the way they develop their products and services. In fact, it has the potential to change the whole basis of a business. These conversations lead them very quickly to say ‘we must be more connected—and so must our products’ in order to innovate.”
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