In a highly connected world, shoppers get pinged with promos as they walk by a store. They pop inside, try on clothes virtually, and walk out without checking out. Elsewhere, factory workers conduct quality checks on equipment through augmented-reality eyewear, receiving detailed maintenance info at the tap of a fingertip. And in the wake of a natural disaster, first responders dispatch drones to affected areas, instantly assessing damage and pinpointing recovery efforts.
This year, those visions and others will move closer to reality as the world’s digital connections continue to become broader and faster. New technologies, such as high-band 5G, are within reach. Existing technologies, like Wi-Fi 6, are expanding. Novel architectures, like cloud and edge computing, are evolving. And all while storage, sensors, and processors are growing more powerful and affordable.
To help leaders understand this tech evolution, we have now published Connected World: An evolution in connectivity beyond the 5G revolution. The new paper outlines the technologies’ significant opportunities and not-insignificant obstacles.
A collaboration with our think tank McKinsey Global Institute (MGI), the new research quantifies the economic potential of advanced connectivity across the automotive, healthcare, manufacturing, and retail industries. From selected use cases, we’ve identified $1.2-2 trillion in value that can contribute to global GDP by 2030. And these four industries make up only about a third of global GDP.
Connected World is not just about the future; it’s also about today. The report finds that existing connectivity technologies enable some 70 to 80 percent of this economic potential. “A lot of people think it will be the newest technologies that will massively move the needle,” explains Ferry Grijpink, a McKinsey senior partner, “but we believe that if we can more effectively use the profusion of tech we have today, we can see some amazing improvements.”
The inspiration for the research traces back to MWC Barcelona 2019. “We noticed a shift from talking about 5G tech and advanced connectivity to thinking about applications,” Ferry says. “People were very taken with the ‘remote surgery’ example, which in reality was very rare, and impractical, since a truly remote location might not be well connected. People were ready for 5G; the tech was ready, but they didn’t know next steps.”
So our firm started a series of discussions. A research group, led by McKinsey partner Davide Schiavotto, interviewed industry experts across the globe. “We asked them what could companies do if suddenly they had connectivity at speeds ten times faster, with 50 times lower latency, and seemingly endless bandwidth? How could their performance change? Which use cases offer the most value? What are the hurdles preventing them from fully exploiting what is already possible today?”
At the same time, we assembled a team of more than 20 experts and technology partners called the McKinsey Center for Advanced Connectivity, a group dedicated to helping clients develop use cases, test prototypes, and launch pilots.
In one example, a telco piloted work with an agriculture business that used drones to monitor weather conditions, reduce water usage, and track field productivity. The telco provided the connectivity while the agricultural company ran the analytics for data, either centrally or on the spot.
In another scenario, we developed a concept for an offshore oil and gas platform, the ‘refinery of the future,’ applying advanced connectivity technology to significantly improve speed, production, security, and maintenance.
Naomi Smit is the McKinsey partner who leads the group. “Our telco people understand the realities of the tech, and our industry consultants know what is possible on the ground,” she says. “We use Leap, our business-building methodology, and other digital and design capabilities, to quickly build and test prototypes. With our networks, we can convene ecosystems of partners to create end-to-end solutions.”
Taking full advantage of the technology can require a transformation of some work process. Alexandre Menard, a senior partner, offers this example: “A manufacturing company installed a network of 500 sensors in a factory – and had to quickly revamp its way of working,” he recalls. “We helped them figure out which of the corresponding 500 alarms were most important; how to calibrate and respond to them; and how to integrate this new function into the existing practices. Often this meant bringing in new digital and tech talent to work side by side with operational experts.”
“We are at an inflection point: there are countless pilots for each industry,” says Davide. “What they need to do now is solve some of the obstacles preventing them from scaling: aligning incentives, creating ecosystems of stakeholders, developing standards, managing the people-side of the transformation—all of which are areas where our firm can help.”