UK SMEs missing out on £8.6bn a year due to slow roll-out of standalone 5G, new Vodafone report finds
While the UK is undoubtedly one of the best places to start a new business, it risks being outpaced by European rivals that are investing in reliable, superfast 5G connectivity at a faster rate.
New report from Vodafone finds that UK small and medium enterprises (SMEs) are missing out on up to £8.6bn a year in productivity savings due to the slow roll-out of standalone 5G.
While the UK is undoubtedly one of the best places to start a new business, it risks being outpaced by European rivals that are investing in reliable, superfast 5G connectivity at a faster rate.
Without the right investment in our standalone 5G network, the UK could miss out on being the second most attractive place in Europe for providing the connectivity and digital competitiveness that SMEs need to scale-up their operations.
A Europe-leading position could be successfully achieved should the proposed merger between Vodafone UK and Three UK be approved. It would deliver £11 billion of investment for reaching 99% of the UK population with standalone 5G coverage by 2034.
Michelle Donelan MP, Secretary of State for Science, Innovation and Technology, Kevin Hollinrake MP, Minister for Enterprise, Markets and Small Business, alongside Enterprise Nation and the Federation of Small Businesses (FSB), call for the speedy rollout of standalone 5G to ensure that Britain remains the most attractive destination to start-up and scale-up in Europe.
With over 5.6 million small and medium-sized enterprises (SMEs) operating today, SMEs account for 99.9% of the UK’s private sector businesses. As the pillars of the local communities they serve and the wider economy at large, SMEs play a pivotal role in driving job creation, sparking innovation, developing regional economic activity, fostering entrepreneurship and diversity and making significant contributions to the UK’s Gross Domestic Product (GDP).
However, a new report from Vodafone has found that SMEs across the UK could be missing out on up to £8.6bn a year in productivity savings, unless the Government accelerates the rollout of 5G Standalone (5G SA) mobile connectivity.
And, while the UK remains one of the best countries in which to start and develop a new business, it risks slipping behind other European rivals as the best place for SMEs to grow due to other countries such as Sweden, the Netherlands, Finland, and Denmark investing in reliable, superfast 5G connectivity at a faster rate.
The report, “Supercharging Small Businesses”, published by Vodafone Business UK, highlights how the accelerated roll-out of new 5G Standalone could boost productivity among SMEs. It goes on to model the competitiveness of 17 European countries in relation to small business growth using three metrics: 5G coverage, SME adoption of 5G-enabled technology, and 5G speeds.
The UK is currently on course to be the 5th most attractive place in Europe for SMEs to use technology to grow, trailing only Denmark, Finland, Sweden, and the Netherlands. However, the UK could leapfrog all its rivals into 2nd place – behind only Denmark – if it can accelerate the roll out of 5G Standalone networks which have the potential to deliver vast economic savings to small businesses.
For example, small agricultural businesses could see the average farmworker save over three working weeks of their time by utilising 5G Standalone-enabled technologies – such as soil, weather and equipment monitors – which drive efficiency savings by ensuring that workers can identify and prioritise issues in real-time. Deploying 5G Standalone at speed, and accelerating the development of the technology it enables, would lead to a collective saving of over 37.7 million working hours a year across the sector. This would deliver £112 million in annual productivity savings and empower SMEs to reinvest, driving business growth.
Similarly, over 2 million employees in the retail sector could save over 45.3 million working hours a year by deploying 5G Standalone-enabled technologies, such as IoT stock maintenance systems. These monitor stocktakes and depletion, avoiding laborious manual checks and freeing up workers so they have time to complete other important tasks. Such technology could contribute to productivity savings of £1.85 billion a year.
The report cites a limited window of opportunity to act while the quality of digital infrastructure remains a competitive advantage within the global economy. With the UK having historically been a global leader, it is essential that it does not fall behind its European rivals at such a crucial moment.
Nick Gliddon, CEO, Vodafone Business UK said: “UK SMEs are already some of the most advanced in Europe at integrating digital tools into their businesses and we’d hate to see them get left behind by not having adequate access to best-in class connectivity such as 5G Standalone.
“That’s why we are excited by the further opportunities our merger with Three UK can unlock for this crucial sector of the UK economy. It would allow us to roll out a national 5G Standalone network, at pace, to help SMEs across the country take advantage of leading 5G-enabled technologies such as AI and IoT to help boost their efficiency, productivity and, most importantly, growth.”
Emma Jones, CEO of Enterprise Nation, said: “It is essential that the UK seizes the opportunity to improve 5G networks to create a first-class environment for SMEs to grow and scale. Enhancing our digital infrastructure can create critical competitive advantages and productivity savings for SMEs, ensuring that the UK stays ahead of the regional competition.”
Michelle Donelan MP, Secretary of State for Science, Innovation and Technology, said:
“As this report rightly recognises, there is huge potential for businesses across the economy to benefit from advances in technology like 5G. This was a major theme of our Wireless Infrastructure Strategy published last year. As this report shows, the UK is one of the best places for small businesses to use technology to grow, and we want to use 5G connectivity as a springboard for that.”
Federation of Small Businesses (FSB) Policy and Advocacy Chair, Tina McKenzie, said:
“Strong and reliable mobile connectivity is essential for small businesses to thrive and grow. Yet, we often hear that unreliable mobile connectivity remains a big obstacle for small firms and the self-employed and is particularly disruptive for productivity in rural areas.
“As technology develops, the need for a decent connection is even more vital. Rolling out 5G Standalone to all areas of the country quickly and efficiently will help small firms stay at the forefront of technological innovation, improving work rates as well as ensuring the UK remains a great place to start and run a business.”
Kevin Hollinrake MP, Minister for Enterprise, Markets and Small Business, said:
“Over 16 million people in the UK work for small and medium-sized businesses. They are the bedrock of our economy. As this research shows, we need to help them use technology to grow even faster. That involves providing people with the necessary skills to understand how to make the most of innovative technologies such as AI. It also means ensuring we have first-class digital infrastructure, including gigabit broadband and 5G Standalone, rolled out across every part of the UK so that every business can benefit from faster speeds and a more reliable network.”
Selaine Saxby MP, Chair of the Broadband and Digital Communication APPG, said:
“A decent mobile phone signal is becoming increasingly important in rural areas, particularly for small businesses. Indeed 5G, rather than 4G, needs to be prioritised for some hard-to-reach rural areas where fixed broadband is sometimes near impossible or would result in physical infrastructure intrusions onto some of our most loved and protected landscapes. The technology of not just the future, but today, requires 5G enabling, it is an essential productivity enabler.”
Unlike non-standalone setups, a 5G Standalone network operates independently with its own core and radio components, providing better coverage, speed, and connectivity. 5GSA enables advanced services like augmented reality (AR), virtual reality (VR), autonomous vehicles, and IoT by fully utilising 5G technology.
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Editor’s notes
Productivity savings by region:
North East: £260 million
North West: £909 million
Yorkshire & Humber: £676 million
East Midlands: £605 million
West Midlands: £711 million
East England: £842 million
London: £1.55 billion
South East: £1.22 billion
Wales: £317 million
Scotland: £575 million
Northern Ireland: £194 million
Productivity savings by sector (national):
Agriculture: £112 million
Manufacturing: £854 million
Construction: £1.28 billion
Wholesale & Retail: £1.84 billion
Logistics: £792 million
Hospitality: £92 million
Professional/Tech/Research/Science: £1.67 billion
Customer and Administrative Services: £807 million
Education: £34 million
Health & Social Care: £280 million
Arts & Entertainment: £118 million
All figures, unless otherwise stated, are from WPI Strategy.
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