Failure to invest in Ireland’s 5G network could result in €12.6bn GDP loss

Amárach Research - Failure to invest in Ireland’s 5G network could result in €12.6BN GDP loss

Two thirds (64%) of SMEs believe effective 5G investment will be important to Ireland’s economic recovery

57% of Irish SMEs now willing to invest in 5G technology to improve remote working

Failure to invest in Ireland’s 5G network over the rest of the decade could see a significant loss of €12.6BN in GDP by 2030 according to a new study by Amárach Research.

The “5G Future SME Report”, completed by Amárach Research on behalf of Huawei Ireland, examines the role 5G will have in Ireland’s economic rebound in the face of the Covid-19 pandemic and explores how Irish SMEs view 5G in the context of its critical importance to their future business growth. The report was launched today in partnership with the Small Firms Association (SFA) and presented to its members.

Countries that want to stay competitive in the global economy are adapting to 5G technology at an increasingly rapid pace. The study found a delay in the rollout of 5G would lead to a slowdown in technological innovation and a reduction in economic growth in Ireland.  Using OECD predictions of Ireland’s long-term economic growth between 2020 and 2035, Amárach Research calculated the opportunity cost of low 5G adoption in Ireland is a loss in GDP of €6.1BN by 2025, €12.6BN by 2030 and €20.9BN by 2035. 

Over 200 Small Medium Enterprises (SMEs) were interviewed for the report, with almost half (48%) expecting some form of 5G to be widely available at the end of 2021. Seven in ten (69%) SMEs believe national 5G investment will support the growth of indigenous Irish businesses, with 67% stating 5G will help develop Irish start-ups and new businesses. Two-thirds (64%) believe effective 5G investment will be important to Ireland’s economic recovery.

5G’s capabilities relating to smart energy grids (69%), smart buildings (48%), telehealth (48%), next generation artificial intelligence (44%), real-time translation (43%) and virtual reality (36%), were named by SMEs as applications important to future business growth in Ireland.

The report revealed 46% of Irish SMEs have moved some or all of their business operations and services online because of the Covid-19 pandemic, with 93% of these predicting they will keep some or all of their operations online after the pandemic has passed.

The survey found strong enthusiasm amongst SMEs to introduce 5G to their businesses.

• 57% of Irish SMEs are now willing to invest in 5G technology to improve remote working for their staff, which has become increasingly important since the onset of the Covid-19 crisis. 
• 59% of SMEs believe the better remote working speeds and capabilities provided by 5G are extremely important for business growth in Ireland.
• Four in ten SMEs (41%) noted the higher quality voice and video calls 5G will provide as an extremely important application.
• The report found Irish SMEs see 5G as much more than just ‘faster internet’.  Half of the companies surveyed (47%) believe the operational cost savings obtained through 5G are a key reason to invest in the technology.

Commenting on the findings, Gerard O'Neill, Chairman Amárach Research, said: “From the viewpoint of the recovery challenge that lies ahead, it is clearer than ever that investing in a world class 5G network will play a vital part in Ireland’s future than anticipated even 12 months ago. 5G’s importance and relevance to the growth prospects of Ireland’s indigenous SME sector cannot be underestimated. Failure to invest in and adopt 5G could result in billions lost in GDP over the course of the next decade.” 

“Ireland recovered from the 2008-10 economic crash and recession by embracing the opportunities presented by broadband, smartphones and new digital technology. Our findings are that Ireland must do the same again, this time embracing the opportunities afforded by 5G technologies. Seven out of ten SMEs we surveyed agreed that effective investment in new technology infrastructure could enable Ireland to be a world leader in new industries by 2025.”

Commenting on the new report, Tony Yangxu, Chief Executive Officer, Huawei Ireland, said: “With the challenges now facing the country, the digital economy is more central than ever to Ireland’s future rebound and recovery. A competitive market for 5G infrastructure will help maximise gains from tech innovation and ensure competitiveness and balanced regional development. We are fully committed to being part of the roll out of 5G across Ireland, helping to create a world-leading digital infrastructure.”

Graham Byrne, Chairman of the Small Firms Association (SFA) said: “The pandemic and the necessity to trade online and to work from home in many cases has resulted in an acceleration in demand for new technologies and digital solutions for our members.  Nine out of ten SMEs has indicated they will keep some or all of their business online, while the vast majority - 85% - believe that it is important for Ireland to invest in technological infrastructure to ensure people can work remotely. The enhanced speeds, response times and more reliable connections provided by 5G make it an attractive option for SMEs.”