Here’s what 5G tech could mean for the Aussie economy
- 09 April, 2018 16:21
The rollout of 5G in Australia could see the country’s economic productivity surge to the tune of an extra $2,000 in gross domestic product (GDP) per capita by the end of the first decade after the technology’s local rollout, according to new Government forecasts.
The Bureau of Communications and Arts Research, which sits within the Federal Government’s Department of Communications and the Arts, released its assessment of the potential impacts of 5G on Australia’s productivity and growth on 9 April.
The working paper, Impacts of 5G on productivity and economic growth, aims to inform any changes to the regulatory landscape that may be needed to support the rollout and adoption of 5G services.
The paper suggested that 5G is likely to improve “multifactor productivity” (MFP) growth across the economy, with the potential to add an additional $1,300 to $2,000 in GDP per person after the first decade of the rollout.
About 80 per cent of per capita growth in income in Australia over the past 30 years is attributable to labour productivity growth, which is comprised of multifactor productivity (MFP) growth and capital deepening, the paper said.
“MFP has languished in recent years and is not expected to bounce back – new drivers of productivity growth will need to be found,” it stated.
“This estimate of the economic benefit is likely to be conservative in that it does not fully take into account the consumer and non-market benefits that are not captured in economic statistics.”
The paper said that the forecast estimates come from a number of factors, including cost and time savings for households arising from ‘smarter cities’ and the indirect effects from improvements in health services on participation and productivity, both enabled by better mobile telecommunications.
“The sharing economy (which harnesses household assets for market production) is also likely to increasingly blur the line between productive and household sectors in terms of the drivers of output, innovation and productivity growth,” it said.
The paper also suggests that the industries in which Australia is already telecommunications-intensive, including the information, media and telecommunications, arts and entertainment, education, and wholesale and retail sectors are well placed to take advantage of 5G services.
However, the economic impact of 5G will be determined by the extent to which it is an improvement on previous mobile technology, or if it is a “general purpose technology” – one that is typically associated with industrial revolutions.