5G and Startups in the EU: Building a Stronger Digital Future

5G, the next generation of mobile networks, is set to revolutionize the way we live and work. It promises faster speeds, lower latency, and increased reliability, which will enable new and innovative applications across a wide range of industries. In Europe, the deployment of 5G networks is seen as a key enabler of the digital economy, which is why it has become a priority for many startups and policymakers. In this opinion piece, we will explore the potential of 5G for startups in the EU, the challenges that need to be addressed, and the policy responses required to support their growth.

Table of Contents show

The Potential of 5G for Startups

The deployment of 5G networks is expected to have a profound impact on the startup ecosystem in the EU. According to a report by the European Startup Network, 5G has the potential to create 2.4 million jobs and generate €1.2 trillion in economic value by 2025. This is due to the fact that 5G networks will enable startups to develop new products and services, such as autonomous vehicles, smart cities, and immersive entertainment, which were not possible with previous generations of mobile networks.

Moreover, 5G will provide startups with access to new markets and customers, both domestically and internationally. With the faster speeds and lower latency provided by 5G networks, startups can reach a wider audience and deliver services in real-time. This will be particularly important for startups in the digital and creative sectors, such as gaming, streaming, and e-commerce, which rely on fast and reliable networks to deliver their services.

Keep exploring EU Startups: Unwrapping the European Digital Identity: Bridging the EU Digital Divide with EUDI

Challenges and Obstacles

Despite the potential benefits of 5G for startups, there are still several challenges and obstacles that need to be addressed. One of the biggest challenges is the cost of deployment. Building 5G networks requires significant investment in infrastructure, which can be a barrier for startups that do not have access to large amounts of capital. This is particularly true for startups in rural or remote areas, where the cost of deploying 5G networks can be prohibitive.

Another challenge is the regulatory environment. Startups need a supportive and flexible regulatory environment that allows them to innovate and experiment. However, the current regulatory framework for 5G is fragmented and complex, which can hinder startups from entering the market. Additionally, there are concerns around data privacy and security, which need to be addressed to ensure that startups can develop and deploy services with confidence.

Policy Responses

To support the growth of startups in the 5G ecosystem, policymakers need to take a holistic approach that addresses the challenges and obstacles faced by startups. This should include measures to reduce the cost of deployment, such as public-private partnerships and tax incentives. Additionally, policymakers need to create a more flexible and supportive regulatory framework for 5G, which allows startups to experiment and innovate.

One potential solution is to revise public procurement rules for SMEs to better support the ‘twin’ digital and green transitions as the EU adopts its Green Deal Industrial Plan. Fifteen startup bodies from across the bloc have signed a non-paper in defense of EU digital sovereignty and the twin transition, which calls for a revision of EU public procurement rules so that smaller and more innovative SMEs can be eligible. The non-paper argues that the rules as they stand give too-conservative a definition of innovation, narrowed down to ‘Research & Development’ (R&D), which results in imperfect economic outcomes, and a suboptimal distribution of projects to innovative tech services that lack explicit R&D elements.

Keep exploring EU Startups: Navigating the Digital Transformation: Unpacking the EU's Digital Services Act (DSA) and Digital Markets Act (DMA)

Moreover, policymakers need to address concerns around data privacy and security by developing clear and enforceable rules that protect the rights of consumers and businesses. This could include the development of a European digital identity framework and the creation of a European cybersecurity certification framework, and the establishment of a European Cybersecurity Competence Center.

To ensure that startups can benefit from 5G networks, policymakers also need to address the digital divide between urban and rural areas. This could be achieved by investing in infrastructure in underserved areas and promoting digital literacy and skills development. For example, the European Union’s Rural Broadband Initiative aims to bring high-speed internet to every corner of the EU by 2025, which will provide startups in rural areas with access to the same opportunities as their urban counterparts.

Finally, policymakers need to promote international cooperation and collaboration in the 5G ecosystem. This could include working with international partners to develop common standards and best practices for 5G deployment, as well as promoting cross-border innovation and investment. One example of this is the European Commission’s Digital Europe program, which aims to strengthen Europe’s digital sovereignty and leadership in emerging technologies.