The ambitious goals set for 5G wireless networks, which are expected to be introduced around 2020, require dramatic changes in the design of different layers for next generation communications systems. Massive MIMO systems, filter bank multi-carrier modulation, relaying technologies, and millimeter-wave communications have been considered as some of the strong candidates for the physical layer design of 5G networks. In this article, we shed light on the potential and implementation of IM techniques for MIMO and multi-carrier communications systems, which are expected to be two of the key technologies for 5G systems. Specifically, we focus on two promising applications of IM: spatial modulation and orthogonal frequency-division multiplexing with IM, and discuss the recent advances and future research directions in IM technologies toward spectrum- and energy-efficient 5G wireless networks.