- Virtual and augmented reality technologies are maturing, and with cost savings, efficiencies and new business streams on the horizon, are set to add US$1.5tn to global GDP in the next decade.
- From product and development to healthcare, training, process improvement and retail, different industries will benefit in different ways from the tech.
- To implement successfully, business and industry need to address concerns around culture, ROI and user experience.
According to PwC’s report, Seeing is believing, virtual and augmented reality — technologies that have been around for years without quite living up to their promise — have reached a crucial point in their adoption. With the winds blowing in the right direction, these technologies are set to transform organisations, from how they work, engage with customers and grow revenue.
In doing so, it is predicted that together, AR and VR have the potential to boost the global economy up to US$1.5 trillion by 2030, a significant lift from its current GDP contribution of US$46.4 billion to date. The majority of this boost, around $1,092.4 billion, is estimated to come from augmented reality — the display of digital information, objects or media onto the ‘real’ world via a mobile or headset. Virtual reality, or full immersion into a digitally created environment, by contrast is expected to deliver $450.5 billion.
But what will cause this massive spike, and how will its impact on industry play out?
The reality of
Like many emerging and established technologies, AR/VR offer the transformative power of efficiency gains and cost reduction — for instance through improving productivity with smart glasses and information that allows field workers faster access to critical data. But they also offer unique tech-specific benefits. For one, allowing virtual teams to be brought together in one location, accelerating product development and decision making. Another distinctive use is in the training of employees via simulation scenarios — of especial use in high-risk employment such as military deployment.
Real opportunity also lies in the creation of entirely new revenue streams and the growth of existing ones, both in the creation of new products and services, and in the businesses involved in developing the technology itself. The desire to grow through market differentiation is a critical business goal. Technology that achieves it should logically take off — but thus far, neither AR or VR really has. But that’s about to change as both reach maturity. Unlike the clunky ‘realities’ of the past, both hardware and software, not to mention content, are becoming sophisticated enough to justify their business case.
Headsets are lighter, cheaper and more comfortable to wear, and the speeds promised through 5G will reduce latency, ensuring a smoother user experience. With processing and storage pushed to the cloud, both cost and user-friendly design are likely to improve further. Haptic sensation — allowing users to ‘feel’ interactions — is developing, helping users to gain more ‘reality’ in their experiences and extending AR/VR use into further industries where touch feedback will be beneficial, such as healthcare.
The report identifies five categories of use cases, and analyses the contribution AR and VR is expected to make in each over the next decade.
For product and service development, the augmentation of product design and enablement of new techniques is expected to boost GDP by $359.4 billion by 2030, for instance, via shortening development pipelines and accelerating creation in the automotive industry. In healthcare, the two ‘realities’ are expected to impact patient care and medical training — such as in allowing students access to operating theatres and increasing consultation opportunities — boosting GDP by $350.9 billion.
The development and training of staff could add up to $294.2 billion, allowing training at scale and in dangerous situations, but also in boosting engagement and knowledge retention. Process improvements in the efficiency, productivity and accuracy of employees and processes has the potential to add $275 billion to GDP: for example, by the use of AR interfaces which help engineers to quickly identify problems and conduct repairs via overlay of a machine’s blueprints.
Finally, the analysis suggests that $204 billion could be added to GDP in the retail and consumer sector, such as from the creation of new media entertainment experiences and the augmentation of retail, like virtual fitting rooms or testing the look of furniture in a consumer’s own home before purchase.
Despite the optimism, the implementation of AR and VR, as with any new technology, will need to be managed carefully in order to avoid pitfalls. As has continually been seen with the use of smart glasses in the consumer sector, there are cultural issues (and of course privacy ones) that can halt uptake. Trust needs to be established by those developing the technology by engaging companies to understand and address concerns.
For business, the cost outlay on AR and VR has to date been a big drawback. As mentioned, 5G and cloud technology will help bring prices down, but to get over the ‘novelty’ aspect of investing in these technologies, business cases will need to focus on the positive outcomes they enable. The cost savings and benefits, such as speed to market and productivity, as well as quantitative ROI, should be the focus.
Finally, there is still progress to be made in improving the user experience of AR and VR. While VR headsets have gotten immeasurably better over the years, there are still some problems (especially for women it turns out) with virtual reality sickness, such as nausea and headaches — not to mention the potential for feeling self-conscious during use. For organisations, careful thought must be put to the type of technology adopted, how it is tested and how it is rolled out.
Success is virtually
With AR and VR already contributing billions to global GDP and these technologies developing into fully fledged business case material, it’s time for businesses to put on the smart glasses and jump on board. To start, visit the Seeing is Believing report for PwC’s tips to getting started — and have your smartphone and its QR code scanner at hand to bring it to augmented life.