5G is not just a faster G

Technological disruption is ubiquitous in today’s economy, and yet, it’s just beginning.

07 Jan 2020

Key takeaways

  • Although the percentage of revenues derived from disruptive trends is still low, tech and tech-enabled companies are set to continue growing their market shares.
  • Investors should look long term when it comes to technology and focus on disruptive trends, such as 5G, that are gaining momentum.
  • 2020 should be a pivotal year for the latest upgrade in cellular technology because demand and supply factors are converging.

If you look at the percentage of revenues derived from disruptive trends, it’s still quite low. For instance, e-commerce only accounts for a low-teen percentage of global retail sales, while fintech penetration is in the low single digits. The figures are even lower for areas like healthtech and automation. Considering the tremendous change brought forth in just the past decade, tech and tech-enabled companies are set to continue growing their market shares against incumbent competitors across traditional sectors. As a result, technology disruption as a theme should continue to enjoy above-average growth prospects.

Investing in 5G

To participate, we recommend investors to invest in a diversified list of disruptors and enablers. Disruptors build new business models through rapid innovation and gain market share against traditional leaders in industries like retail, financial services, manufacturing, healthcare, etc. Enablers provide the underlying technologies that power the disruption, including in areas like artificial intelligence (AI), augmented reality/virtual reality (AR/VR), big data, cloud and 5G.

2019 was a rollercoaster year for technology. Stocks got hammered by near-term concerns around trade and Internet regulations, but then they recovered as structural growth prospects came into view. Without a doubt, disruption is accelerating as technology becomes ever more powerful. So investors should look long term when it comes to technology and focus on disruptive trends that are gaining momentum. One such structural trend— which is the theme of this publication—is 5G.

5G at an inflection point

Governments, telecom operators, smartphone vendors, corporations and consumers are preparing to harness the significant growth potential of 5G. We too are positive and believe the technology will be a key theme for tech-based investors in 2020. 2020 should be a pivotal year for the latest upgrade in cellular technology because demand and supply factors are converging. On the former, strong demand from consumers and corporates to support faster, reliable and low-latency applications is driving a need for a superior offering like 5G. And more importantly, on the latter, the 5G ecosystem is strengthening from increased spectrum availability, greater commitments from telecom operators and a solid 5G smartphone pipeline.

As such, we expect 5G technology to finally take off in 2020 and drive some of the most powerful innovations in the next decade.

In the full report, we dive into 5G and cover its investment implications, discuss what it means for entrepreneurs, share multiple use cases across industries and shed light on what makes it different from 4G.

Read the full report: Tech disruption: 5G is not just a faster G, 19 December 2019.


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