This is according to new research conducted by international legal practice Osborne Clarke.
According to the study, concerns regarding security, as well as data protection and privacy in relation to GDPR regulations are slowing the adoption of Internet of Things (IoT) and 5G networks.
More than 60% of all businesses across 11 countries say cybersecurity threats are very or extremely likely to lead to avoiding greater connectivity.
64% of respondents cite data protection concerns are potential barriers to IoT adoption.
Almost 74% of the respondents say data security and privacy concerns is hindering IoT and the adoption of 5G networks in the energy sector.
88% states that the energy industry is most likely to recognise the commercial and strategic importance of 5G over the next five years.
Ashley Hurst, a partner at Osborne Clarke, said: “There is understandable hesitancy around privacy and security issues given the potential consequences of cyber-attack for energy companies but there is a real danger in falling behind the curve for those that don’t take advantage of greater connectivity.
“Aside from staying ahead of the game, technically, by using appropriate software and encryption, energy companies need to practice their crisis plans. They need to be able to clearly articulate their data flows and how their IT systems talk to each other so that decisions can be made quickly.”