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Why 5G is creating the perfect conditions for the Industrial IoT

Estimated reading time: 5 minutes

Last updated September 2022

Two hundred years ago mankind invented machines that could do unprecedented physical work – orders of magnitude greater than humans were capable of. This 'horsepower' kick-started the industrial revolution. The world would never be the same.

Today, another revolution is under way. But this time, the machines are doing cognitive work. They are pattern detecting – making smart decisions based on vast data sets. And again, this work is beyond the capability of individual human beings.

But these super-smart machines are not acting alone. They are exchanging information with each other in complex networks of connected devices and sensors – mostly without any direct human intervention.

This is the Industrial Internet of Things. And like its 18th century predecessor, this new revolution also promises to unleash innovation that will change the world in remarkable ways.

Of course, the IoT itself is hardly new. Smart connected machines have been ‘talking’ to each other for decades. In fact, some argue that the IoT began with a connected Coke dispenser back in the 1980s.

This first generation of the IoT comprised machines that performed relatively simple functions: their sensors would collect and analyse data, and then send instructions over the air.

Many consumers are already familiar with this IoT. They see it in the form of smart home applications such as remote alarms, thermostats and doorbells.

But now, after a decade of steady growth, the IoT is ready for a new phase. It's moving into the industrial sphere and promising to transform sectors from manufacturing to healthcare to automotive to agriculture.

What's behind this next generation IoT? 5G

Complex webs of pattern-detecting, decision-making machines require fast, widespread low-latency connectivity. 

Only fifth generation cellular can deliver it.

Yes, there are other network options. Satellite, Wi-Fi, Bluetooth, RFID, NFC, Low Power Wide Area Networks (LPWAN) and Ethernet all have the ability to connect devices. 

But every one involves a trade-off around speed, range, power consumption, bandwidth and so on. 

5G is different. Let's investigate how

Every time the mobile industry upgrades its network, there is excitement at what innovative new services will be built on top of it. The results are always surprising. 

When 4G brought speedy, always-on connectivity to millions of people, it was easy to imagine something like video streaming. But ‘challenger’ banks with no branches? Language learning apps? TikTok-based dance crazes? Not so much.

What fuels all these new ideas is the speed and reach of connectivity. Give innovative entrepreneurs access to ultra-fast mobile broadband that rarely if ever goes out of range, and they will dream up amazing new services.

And with 5G, the improvements are off the scale

5G is not just faster 4G. It's a new type of network, built on virtual infrastructure rather than the (mostly) physical network components that underlie previous cellular generations. 

Thanks to its software-defined core (and its use of shorter frequencies between 30GHz and 300GHz), 5G changes the way that mobile services are delivered – with radical improvements in speed, bandwidth and capacity. 

•    Speed

5G can reach up to 10 gigabits per second. That's around 100 times faster than 4G. To put this in practical terms, it takes 50 minutes to download a movie on 4G. On 5G, it could take seconds.

•    Capacity

5G has the potential to connect one million devices per 1 Km2 – 1,000x more than is feasible on 4G. Also, thanks to the unprecedented reach of the new 5G networks, they will finally be able to extend connectivity to remote locations – and thereby change the limits of what's possible with IoT devices in previously unconnected regions.

•    Latency

Latency describes the delay between the sending and receiving of information. In more tangible terms, it's the gap between tapping to ‘fire’ in a mobile game and seeing something happen on the screen. 

5G radically reduces the latency of cellular connectivity to as little as one millisecond. By contrast, 4G delivers 40 to 60 m/sec.

This is important stuff – especially for new Industrial IoT applications such as remote surgery and autonomous transport. The average reaction time for humans is estimated at around a quarter of a second. In this context, 5G could make it possible for a car to react 250 times faster than its driver.

Customizing 5G for the enterprise: private networks at the edge

In addition to improving network speed, reach and capacity, 5G is also divisible. In other words, it's possible to create smaller virtual networks at the edge of the 5G core. 

This is known as ‘network slicing’, and the key to it is ‘multi-access edge computing’ (MEC). Mobile network operators can use MEC to allocate bandwidth to enterprises – so that these organisations can run their own mini-networks that are perfectly customised to their needs.

By giving private companies ultra-fast connectivity that they control (and can secure), private networking will be a key driver of the Industrial IoT. And enterprises are already experimenting. The Global Mobile Suppliers Association says it is tracking 370 companies around the world that have been or are investing in private mobile networks based on LTE or 5G. 

What are the building blocks of the Industrial IoT?
In the Industrial IoT, devices have to go from ‘dumb’ to ‘smart’ – and then be able to share data with each other seamlessly. For this to happen, a number of building blocks need to be in place… 

•    A sensor in the device

At a fundamental level, any IoT device has to capture data and then send it somewhere. So it needs a sensor to measure data such as temperature, humidity, pressure, light, motion, acceleration, smoke and so on.  
•    The ability to connect 

Any device must be able to connect to the network in order to transmit data to the cloud and receive commands. On a mobile network, this is done via a SIM (which can be embedded or even software-based).

•    A software application to tell the device what to do

No device can measure, process or transmit data without an application giving it instructions. The application runs on a processor. 

•    A fast and available network

Obviously, all IoT devices connect to some kind of network so they can ‘talk’ to each other or some form of central server.

•    A cloud application to process the device data

All IoT data, once sent, is stored in a cloud database where it is processed and acted upon. Now, there are public cloud platforms designed for IoT applications such as AWS IoT from Amazon, Google Cloud, or Azure from Microsoft.
•    A data analytics capability

IoT devices gather and process data in vast quantities. But in the more advanced use cases, they learn and evolve their decision-making over time. This is machine learning, and it is driving some of the most exiting IoT innovation.


The 5G Industrial IoT: security is essential

The Industrial IoT will unleash an exponential increase in data – and a vast rise in the number of devices processing that data. Every one of these end points is a potential entry point for attackers. Without robust security, bad actors could corrupt the network, undermine confidence in the Industrial IoT and drastically reduce its impact.

Securing ‘things’ as opposed to human-owned devices is a complicated process. But it can be understood in terms of answering six key questions:

•    What is the device’s identity?
•    How can the device authenticate itself?
•    Does on-device data need to be encrypted?
•    Does over-the-air data need to be encrypted?
•    How will trust be managed on the device?
•    How can vendors validate software/firmware updates?

Industry experts are currently working hard to secure the Industrial IoT. The consensus is that the best way to do this is to build in security from the ground up across three locations: the device, the cloud and the communications channel between the device and remote servers. 

How big is the 5G IoT market now? And how big can it be?

Analysts agree that, thanks to 5G, the Industrial IoT is on the cusp of rampant growth. A 2020 study by Juniper Research projected that the number of Industrial IoT connections will increase from 17.7 billion in 2020 to 36.8 billion in 2025. That's an annual growth rate of 107%. The research identified smart manufacturing as the major factor, accounting for 22 billion of these connections.

This could be the trigger for a new era of productivity improvements. A report by McKinsey estimated that 5G could boost global GDP by around $1.2 to $2 trillion by 2030. 

In Part 2 of this analysis, we explore how the 5G-powered Industrial IoT is impacting a diverse range of verticals – and speculate about how it might accelerate future innovation.