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THREE QUESTIONS FOR |
Naomi Smit |
Naomi Smit, a partner in McKinsey’s Amsterdam office, is a leader at the McKinsey Center for Advanced Connectivity, which brings together industry and strategy expertise, technical knowledge, new research, and implementation skills to capture the value presented by advances in connectivity. |
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What are the connectivity technologies of the future? What impact will advanced connectivity have on the world, and what are the benefits? |
The future of the connected world doesn’t just mean having the newest technologies. While high-band 5G and low-Earth-orbit [LEO] satellite constellations are important, much of the future landscape will actually be defined by the expansion and evolution of existing technologies. Think fiber, low- to midband 5G, Wi-Fi 6 (the next generation of Wi-Fi technology), and various other long- and short-range solutions. |
Next-generation connectivity tools will enable new capabilities, like near-global coverage with LEO constellations, enhanced broadband with 5G and fiber, a scaled-up Internet of Things [IoT] with Wi-Fi 6 and 5G, and the running of mission-critical services that demand absolute reliability—for instance, video for public-safety networks that could make the difference between life and death, providing critical information in real time. |
New technologies like cloud and edge computing will further change the architecture and widen the realm of the possible by reducing computing costs and latency. |
What role will 5G play in other industries and markets, like manufacturing, oil and gas, retail, healthcare, mobility, and more? |
The world’s digital connections are about to become broader and faster, providing a platform for every industry to boost productivity and innovation. Recently, we published a report quantifying the tremendous potential of advanced connectivity technologies for telcos and other industries. What we found is that enhanced connectivity across seven sectors could generate $2 trillion to $3 trillion in additional value for global GDP by 2030. |
These value-creating opportunities could transform every aspect of our lives, including building a more personalized, frictionless in-store experience with technologies such as biometric sensors and radio-frequency identification [RFID]; using autonomous farming machinery and smart-crop monitoring in agriculture; diagnosing patients with AI-powered software in healthcare; and, in mobility, improving vehicle-to-vehicle communications to increase safety and optimize the flow of traffic. |
How can companies capture the value at stake? |
Telco operators, connectivity-infrastructure providers, IoT-module providers, industrials, and even industrial-automation companies all have a role to play along the value chain. However, to be successful and deliver the tremendous potential at stake, these businesses will need to tackle the challenges of value-chain coordination, use-case fragmentation, misaligned incentives, data complexities, and deployment constraints. |
Establishing common technical and data standards may help companies introduce new reimbursement models for service providers and their ultimate beneficiaries. Companies may also start to coordinate their efforts and create more partnerships to test use cases, further develop technologies, and lobby for regulatory change. |
However, turning all of this potential into reality depends on whether connectivity providers, end users in multiple domains, and public-sector officials can forge new models and clear away some of the barriers. Considering the value at stake, there should be enough motivation for all the necessary parties to come together. |
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BACKTALK |
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