Metaverse: What are the economic benefits?

By Kevin Chan

  • The metaverse, built upon immersive technologies and mixed reality, is set to unlock significant economic value across the world.

  • A series of reports released by Meta and Deloitte have highlighted the impact the metaverse will have on the US, Europe, Asia, and MENA region.

  • Governments are already looking to the metaverse as a valuable new avenue to boost GDP.

The metaverse will be the successor to the mobile web and the next evolution in social connection. Immersive technologies – like augmented reality (AR), virtual reality (VR) and mixed reality – have the potential to unlock significant value for governments, businesses and people around the world. These extended reality (XR) technologies are being built by multiple companies of all sizes, organizations and creators around the world. The development of the metaverse is a cross-sectoral effort that will benefit from openness, compatibility and common standards across systems and platforms — maximizing the economic pie for everyone.

Businesses are stepping into the metaverse

Last month, we released a series of new economic impact reports that seek to bring greater analytical rigour to the discussion around the economic contribution of the metaverse. These reports, commissioned by Meta and produced by Deloitte, focus on the economic contribution of the metaverse to key regions and countries, including the United StatesCanada, the Middle East, and sub-Saharan Africa.
These add to other recently released research, including a report for Turkey commissioned by Meta and produced by Deloitte, an independent study by Deloitte for the Asia region, and Meta’s reports for the European Union (EU), and the United Kingdom (UK). The findings of this research are impressive and we hope that they will help offer governments and industry the ability to make evidence-based decisions about the policies they adopt and where they focus their efforts.
Impact of metaverse on annual GDP.
Impact of metaverse on annual GDP. Image: Meta

In the EU, business adoption of VR and AR is higher (10%) than in the US (9%), with the metaverse expected to contribute up to €489 billion to the EU’s GDP by 2035. That includes up to €105 billion in France, €66billion in Germany, and €53 billion in Spain. Already we see the leading European retailer Zara launching new clothing collections consisting of both digital and physical products for yourself and your avatar. BMW has developed VR-based training systems and used digital twins to design and plan a factory, resulting in planning processes that are 30% more efficient.

The UK, home to a thriving VR ecosystem of more than 1,000 companies, can expect up to £75 billion per year in additional GDP by 2035 from the metaverse, with innovative companies like Jaguar Land Rover developing new vehicles in VR environments.

The US also stands to benefit enormously from the development of the metaverse, with an estimated contribution of up to $760 billion to GDP by 2035. This important step change in economic growth is also expected to be driven by businesses harnessing new revenue streams, augmenting existing business models, and leveraging operational efficiencies. US companies are already starting to leverage metaverse technologies to drive value.

Canada is also well-positioned to benefit from the metaverse, with strong global hubs for artificial intelligence, video games and immersive technologies. Education is a big focus here: Georgian College has developed 12 VR learning programmes in areas such as architecture, tourism, and nursing, and it’s pursuing Indigenous language lessons in a VR environment.
Asia Pacific is emerging as a world leader in the development and adoption of metaverse technologies. Last year’s independent analysis produced by Deloitte Centre for the Edge estimated that the impact of the metaverse on regional GDP could be between $800 billion and $1.4 trillion per year by 2035. Japan, Taiwan and Korea all have flourishing VR industry ecosystems, and people are already learning, socializing, purchasing items, gaming and accessing social services on virtual platforms. Several governments in the region, including South Korea and Japan, have featured the metaverse in their economic plans.
The findings in these reports — utilizing published estimates for metaverse investments – take historical linkages between information and communication technologies (ICT) investments and economic growth, and apply them to IMF’s national GDP forecasts. They show a bright future for immersive technologies in the years to come.
Building the metaverse will, by necessity, be a cross-industry and cross-sectoral enterprise. It will only reach its full potential if it is built on a foundation of common technical standards and protocols that will enable people and businesses to seamlessly navigate and connect between experiences – just like they can browse the internet today. This will require technical and policy work from industry and regulators to achieve.
Meta is already working with leading international organizations — including the World Economic Forum, the OECD, the XR Association and the Metaverse Standards Forum — to ensure the metaverse is built on a foundation of open standards, like today’s internet. Collectively, we’re at the beginning of this journey.

We hope that by working together from this early stage across industry, the public sector, academia, and civil society we can begin to answer these questions as these new technologies are built and ensure that the enthusiasm for the potential these technologies hold is accompanied by a focus on developing them responsibly.

Link: https://www.weforum.org/agenda/2023/06/what-will-be-the-economic-benefits-of-the-metaverse/?utm_source=pocket_saves

Source: https://www.weforum.org

Source: https://www.fintechnews.org/metaverse-what-are-the-economic-benefits/