Small businesses missing out on £8.6bn productivity savings a year due to slow roll-out of 5G

Small and medium sized businesses in the UK are not able to benefit from total productivity savings of up to £8.6bn a year due to the slow roll-out of Standalone 5G, a new report reveals.

The study by Vodafone said that while the UK is 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.

According to the report, the UK is set to be the 5th most attractive place in Europe for SMEs to use technology to grow, behind Denmark, Finland, Sweden, and the Netherlands. However, the UK could jump into 2nd place if the roll out of 5G Standalone networks can be accelerated.

Examples of benefits include the average farmworker at a small agricultural businesses saving 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.

In addition, the report said over two million employees in the retail sector could save over 45.3m working hours a year with 5G Standalone-enabled technologies, such as IoT stock maintenance systems, which monitor stocktakes and depletion, avoiding manual checks and freeing up workers so they have time to complete other important tasks. Such technology could contribute to productivity savings of £1.85bn a year, the study claimed.

Nick Gliddon, CEO of 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, added:

"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, science, innovation and technology secretary, commented:

“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."

Kevin Hollinrake, small business minister, said:

“Over 16m 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."

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. 

The report said the following regional productivity savings could be made:

• North East: £260m

• North West: £909m

• Yorkshire & Humber: £676m

• East Midlands: £605m

• West Midlands: £711m

• East England: £842m

• London: £1.55bn

• South East: £1.22bn

• Wales: £317m

• Scotland: £575m

• Northern Ireland: £194m

Productivity savings by sector (national):

• Agriculture: £112m

• Manufacturing: £854m

• Construction: £1.28bn

• Wholesale & Retail: £1.84bn

• Logistics: £792m

• Hospitality: £92m

• Professional/Tech/Research/Science: £1.67bn

• Customer and Administrative Services: £807m

• Education: £34m

• Health & Social Care: £280m

• Arts & Entertainment: £118m