This past Wednesday, Verizon introduced 5G capabilities in the cities of Chicago and Minneapolis. In doing so, Verizon became the first telecommunications company to serve its customers with the new technology. Although there have been complaints about spotty service and inconsistent coverage, these appear to be only temporary delays which are expected when a new technology is introduced to the public. As Verizon and other telecommunications companies optimize their 5G capabilities, the general public will be able to utilize the technology without a hitch.
5G wireless networks will prove as tremendous improvements over current 4G technologies. In fact, estimates put current 5G speeds as much as twenty times faster than 4G speeds. To put that in perspective, the average consumer will save roughly one full day per month due to increased download speeds.
It is entirely possible that Verizon introduced 5G technologies knowing that there would be incomplete coverage. However, there are oftentimes great benefits for market participants to be the first player in a new market segment. This market strategy is referred to as first-mover advantage. A market participant has first-mover advantage if it is the first entrant and gains competitive advantage through control of resources. This brief period of time where the first-mover has seemingly total market control provides monopoly-like status and the firm rightfully garners inflated profits. Of course, if the first-mover does an exceptionally poor job during the market introduction phase, second-movers may have the advantage in entering the market. In this case, companies like Sprint or T-Mobile may be able to roll out their own 5G technologies before Verizon is able to optimize its technology; Sprint and/or T-Mobile would then enjoy second-mover advantages.
There have been recent concerns raised about emerging technologies and their effects on the average (American) worker. Of course, technological developments will displace some jobs and individual laborers may be forced to find new opportunities for personal income. However, history provides numerous examples of these workers finding such opportunities after a short shake up period. When the market is left free to operate and innovation continues, new job opportunities will continue to pop up. For example, as we continue to rely more heavily on computers, the need for ‘soft skills’ will be emphasized. Complementing human abilities with technological capabilities is and will continue to be prevalent in the modern marketplace. Indeed, man with machine is much more powerful than man or machine. When firms are free to compete in order to maximize profits, all parties benefit. The shareholders at the most successful companies get financially rewarded; employees at these companies are able to maintain both their employment and subsequent income stream; customers necessarily receive better service and improved overall well being.