The advent of the metaverse will transform every aspect of our lives, and businesses and governments need to prepare for it now, writes John Ward
Consider the possibility of hosting a meeting with colleagues physically located in different parts of the world but virtually present in the form of 3D avatars. What about being able to try on clothes in a virtual shop without leaving your armchair, or even designing and test-marketing a new car without the need to build a prototype?
These are all examples of the massive potential held out by the metaverse, the shared three-dimensional virtual world where people interact with objects, the environment and each other through digital representations of themselves.
Up until now, online platforms have enabled us to simulate many offline activities, but they cannot substitute physical presence. The metaverse aims to bridge this gap by creating a tactile, sensorially immersive experience that delivers the feeling of being present without requiring your physical presence.
This will demand a radical shift in companies’ approach to customer engagement, branding, product development, innovation and, ultimately, their entire business model.
We are already seeing retailers sell clothing and shoes for avatars, manufacturers creating digital twins to optimise factory performance, and organisations using the technology to conduct interviews and onboard recruits.
Governments are beginning to realise the potential for deeper interactions with citizens in areas such as education and culture. Some countries are combining artificial intelligence (AI) with digital replicas of physical environments to predict the spread of wildfires.
These examples provide a glimpse into the astonishing possibilities offered by the metaverse. But there are also potential pitfalls. The challenge for businesses, governments, and society is to successfully navigate the transformed environment created by this immensely powerful new technology.
As we begin the journey into this new world, five key questions emerge:
How will the metaverse transform business?
Irish businesses need to ask themselves what investments they should make to prepare for the metaverse.
Like digital transformation, the metaverse has the potential to become a breeding ground for a new set of competitors, markets, customer preferences and business models. Businesses need to start factoring this into their medium- and long-term strategies.
Are regulators ready for the metaverse?
The metaverse is likely to magnify challenges already faced by regulators in areas such as personal data collection and privacy.
The virtual and augmented reality devices used to access the metaverse will allow organisations to track and collect highly personal data such as blood pressure and other health indicators. This will require extensive revision of current data regulations and legislation.
What will good regulation look like in this new landscape, and how can regulators ensure their efforts do not lag behind the technology?
How will the metaverse impact human-centred experiences?
Successful experiences in the metaverse will be contingent on the ability to understand and adapt to changing customer behaviours and expectations. Furthermore, as customers journey through the metaverse, trust will become even more important.
In this context, organisations will need to examine how this will change the way brands design and implement the customer journey, what it will take to deliver trusted experiences, and how customer engagement and loyalty will be redefined.
How will the metaverse affect sustainability efforts?
Making the metaverse a reality will require a vast new technology infrastructure, and it will necessitate the adoption of resilient, net zero solutions.
The shift to a virtual world could, on the one hand, reduce physical resource consumption and greenhouse gas emissions, but the electrical power required by the expanded infrastructure could offset many of these gains.
At the same time, the metaverse could transform our ability to model the physical world, offering a more profound understanding of our environmental impacts and enabling better decisions on mitigation.
How will the metaverse develop in different countries and regions?
Although globally recognised standards will emerge over time to enable interoperability, governments worldwide will likely intervene in the implementation and operation of the metaverse in the same way as they have done with the internet.
Organisations must ask how this will impact the evolution of the metaverse and their global operations utilising it.
At the same time, the global decentralisation movement – which seeks to free the internet and the metaverse from government and corporate regulations – is gaining traction. What implications might this have on the future of business models and corporate structures?
We are standing on the threshold of a transformative technological epoch, and this will demand a new approach to every sphere of human and business activity. Businesses, governments, and civic society will need to understand the full implications of the technology and prepare accordingly.
John Ward is Partner of Head of Digital & Emerging Technology at EY.
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