5G and Site Selection: Why advanced telecommunications matter for FDI attraction

With the global rollout of 5G networks accelerating, advanced telecommunications infrastructure is poised to become a crucial factor in site selection. Businesses in sectors like manufacturing, logistics, and autonomous vehicles increasingly demand faster, more reliable networks, meaning regions with robust 5G coverage could gain a competitive edge in attracting foreign direct investment (FDI). 5G is reshaping industries, and countries must prioritize its rollout to stay competitive in the global FDI race.

The transformative potential of 5G

The potential of 5G extends far beyond faster mobile downloads or better video streaming. At its core, 5G can reshape entire industries by enabling the widespread use of technologies like AI, big data, and the Internet of Things. This next-generation network has speeds up to 100 times faster than 4G, along with ultra-reliable low latency that enables real-time interactivity.

According to the United Nations International Telecommunication Union, global 5G coverage has reached 38%, with high-income countries having achieved an average of 89% coverage, compared to virtually no 5G in low-income regions. Even within the European Union, the rollout has been patchy, with countries like Malta and Denmark achieving near-total coverage, while others like Romania, Sweden and Belgium lag far behind.

5G’s role in attracting high-tech foreign direct investment

It has been estimated that 5G will contribute a value-add of over USD 960 billion to global GDP in 2030, representing around 0.7% of the projected global economic output. Disparities in 5G deployment could therefore significantly impact a region’s ability to drive economic growth. Countries that lag in 5G infrastructure may face challenges in appealing to tech-driven industries that depend on advanced telecommunications for competitiveness. On the other hand, regions with robust 5G coverage may be more likely to become attractive to foreign investors, particularly in sectors reliant on cutting-edge connectivity.  

High-tech sectors like autonomous vehicles, smart manufacturing, and healthcare may prioritize locations that can meet these advanced connectivity requirements, making 5G infrastructure a key factor in investment decisions. Moreover, sectors traditionally viewed as non-tech, such as manufacturing, logistics, and agriculture, are becoming increasingly data-driven, further highlighting the growing need for advanced connectivity across all industries.

How 5G supports key industries

A prominent example is the automotive sector, where the race for autonomous driving technology is intensifying. 5G networks enable faster data processing, better vehicle-to-vehicle communication, and real-time updates, all critical for developing autonomous vehicles. Companies like VW and Tesla are exploring private 5G networks in their factories to support operations and develop digital twins for enhanced efficiency. However, relying on private networks is not feasible for SMEs and start-ups. These businesses depend on the availability of reliable public 5G infrastructure to remain competitive. As 5G becomes integral to industries like autonomous and electric vehicles, companies will prioritize regions with advanced 5G networks to stay ahead.

Smart manufacturing stands to gain significantly from 5G, as its ability to transfer large volumes of data quickly and reliably is essential for the adoption of advanced technologies. With enhanced connectivity enabling greater efficiency and precision, industries such as robotics, industrial automation, and supply chain management will prioritize regions with robust 5G infrastructure to optimize production processes, integrate new technologies, and improve operational agility.

In healthcare, the availability and implementation of 5G will be transformative. From telemedicine and remote surgeries to 5G-powered augmented reality for medical training, the speed and low latency of 5G will enable more efficient and accessible healthcare services. Hospitals and medical centers will be able to offer real-time consultations, remote diagnostics, and even high-definition, real-time surgery assistance from specialists across the globe. As healthcare systems continue to adopt digital solutions, locations with advanced 5G infrastructure will become increasingly attractive to healthcare providers, biotech companies, and medical research firms.

A global race to 6G: Preparing for the future

In the evolving landscape of global investment, 5G availability will become a critical location driver. As the global economy becomes increasingly dependent on the speed, reliability, and scalability that 5G offers, locations that can provide these capabilities will be in high demand. For nations still in the early stages of 5G deployment, prioritizing its rollout will become increasingly crucial to remain competitive in the global race for FDI.

As significant as the 5G rollout is, it is just the beginning. Countries and companies are already looking ahead to 6G, anticipated to be even faster, more reliable, and more efficient. Regions that are proactive in fostering 5G infrastructure will be better positioned to attract the talent, business, and investment required to lead the 6G revolution. As countries and the private sector push forward with their 6G development efforts, today’s investment in 5G will ensure that countries and cities are ready to better compete for FDI in the decades to come.  

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