The Rapid Growth of Extended Reality (XR)
We are about to break one of the longest and most eagerly-awaited hype cycles in tech history. XR includes virtual reality (VR), augmented reality (AR), haptics, holograms and an expanding range of immersive tools that use and enhance our natural senses.
XR tools blur the boundaries between the physical and virtual worlds, they are opening up vast new markets and set to transform our day-to-day lives.
Don’t be fooled. While XR has brought to life exciting realities for consumers and gamers, the real action is now taking off across all parts of the economy. In fact, industry spending on AR and VR is already outstripping the consumer market and will be triple its size within four years.
The number of patents in AR and VR is growing strongly. And startup funding grew by 237% between 2014 and 2016.
Extending the reality today
XR is extending well beyond AR and VR thanks to innovations that allow a more intuitive connection between our natural senses and the world around us. Start-ups are experimenting with bringing touch, taste and smell to enhance these immersive experiences. Even our thoughts are being harnessed to connect with and to control the physical world, through the translation of brainwaves into digital signals.
This is helping to take us into a post-digital age in which our interaction with technology is becoming so intuitive that it will change the way we live and work on a daily basis. Many firms are already experiencing this fundamental shift that is quietly playing out beneath our feet:
- Worker Productivity: From designing prototypes in virtual teams, to augmenting assembly-line and warehouse workers, XR is boosting workforce productivity across all parts of industry value chains.
- Designers at Volkswagen can submerge themselves in virtual worlds, more vividly experiencing the car’s look, feel and drive—spatially, in 3D—thanks to XR tools.
- Training: IDC expects spending on VR/AR training to grow at 46% (CAGR) between 2018 and 2023, reaching US$8 billion by 2023. VR and AR have different strengths but both enhance and accelerate experiential learning.
- BP’s use of VR training allowed engineers to complete offshore drilling operations tasks 40% under budget and 4 months ahead of schedule.
- Customer experience: AR lenses and filters are now commonly used for social media marketing, and customers are already able to use VR to tailor cars or houses to their liking before they are built.
- Lowes’ in-store VR Holoroom allows customers to sample household products before making a purchase.
- Social sphere: XR is educating children by taking them to places they’ve never seen, providing therapies for those with physical or psychological disabilities, and helping health workers learn new skills.
Our analysis shows that XR will enhance the value of workers and boost their productivity through human + machine collaboration. On average, 21% of worktime could potentially be augmented by the use of XR, rising to more than 30% in healthcare and social services, manufacturing and construction.
Sensing the new risks
We are familiar with today’s data-related risks. But as with all new technologies, immersive experiences bring new dangers. Their power and intimacy raise the level of risk in three ways:
XR will soon integrate into our daily work lives. An unintentional misstep that potentially harms customers or employees can destroy trust and, consequently, brand, reputation and future prospects. XR will test companies with a deeper set of challenges that touch upon mental health and social cohesion. We identify six risks:
Misuse of personal data: Personal data will go beyond people’s credit card number, purchase history, or social media activity. Their feelings, behaviors, judgments and physical likeness will all be exposed to potential cybertheft and manipulation.
Fake Experiences: When news and information are consumed through immersive experiences, it will be harder to separate reality from falsehood, profoundly influencing behaviors, opinions and decisions.
Cybersecurity: Not only could avatars be used to create new forms of identity-related crime, but ransomware and extortion risks will rise as more critical tasks, like surgery or engineering, become dependent on smooth, real-time XR procedures.
Tech addiction: Over-dependence could significantly impact mental health and wellbeing by extending the gap between reality and what life could be like. New mental-health disorders related to extended periods in virtual worlds are still being explored.
Antisocial behavior: Trolls could go from intimidating with words on social media to physically intimidating targets in a virtual world with avatars. And undesirable behavior that is normalized in a virtual environment can creep into real-world behaviors.
Digitally divided worlds: Unequal access to new educational or working experiences amplifies social divisions. And increasing time spent in virtual worlds can disengage people from real-world societal problems.
A new sense of responsibility
Companies already know from current technology challenges that retrospective responsibility costs dearly. With immersive experiences, the stakes are so high, we cannot afford to wait until large-scale business models are making commercial returns. Firms are obliged to take pre-emptive, preventative action.
Responsibility and ethics must be designed into the way XR tools are built and deployed, starting today:
Business leaders must encourage policymakers to enable Responsible XR growth through three main priorities: