Is the metaverse key in economic development? Well, sceptics will scoff and economists would frown, if we said yes to this. But hold on, it may just be the elixir to the ever evolving and growing digital economies. As inflation rears its ugly head and economies continue to struggle, many countries are banking on emerging technologies such as the metaverse and non-fungible tokens (NFTs) in the hope of recovering from the rampant falling economy.
Of late we see, Shanghai making Web 3.0 an integral part of its five-year economic recovery plan. Post-COVID-19, Shanghai’s GDP growth rate had already dropped by 13.7 pc in the Q2 of 2021. To mitigate this, the Shanghai Municipality released a draft paper of its 14th Five-Year Plan for the ‘Development of Shanghai’s Digital Economy’ on July 13. Key highlights included integration of metaverse into tourism kicking off with a digital art-themed events to promote related NFTs during the Shanghai International Artwork Trade Week. It also put forward suggestions like the creation of virtual enterprises, the use of virtual reality in education, and the incorporation of technology in tourism and entertainment. They will be exploring fashion, retail, entertainment, travel, and all the uses of metaverse to create what will be the future of online commerce, which is also known as ‘Experiential Commerce’.
The draft paper suggests government-directed funds to create 10 ‘leading’ companies as chain-owner enterprises, who would compete in the international market. In addition, about 100 smaller firms will master core metaverse technology with a vision to focus on accelerating research and deployment of the metaverse platform, emphasising virtual concerts, idols, sports, and other digital entertainment options. A $52 billion metaverse cluster expansion in the city is one of the key objectives of the plan and they aim to immediately allocate a $1.4 billion fund to reach that goal.
Besides Shanghai, South Korea too is moving in on the Web3 space, as a part of the ‘Digital New Deal’, and is planning to invest $177 million into metaverse projects. West Dubai is taking proactive steps to prepare its government for the metaverse embracing Web3 and blockchain.
Moral of the story - digital economies are driven by people and nations well-versed in future technologies such as AI, ML, VR, AR, and blockchain.
From an India perspective, we truly need to build a support framework that would enable start-ups to work freely in this space which is possible by strengthening cutting-edge technological breakthroughs by providing a better environment for talent to stay and work in India. We also need to formulate a long-term plan to ensure that businesses in the space builds and thrives, and also brings in revenue to the country. New tech zones need to be created and promoted to encourage new technology R&D and buffer and strengthen the infrastructure.
India, which has resources and consumers, therefore has the potential to become a major Web 3 hub. This would only be possible with a synchronised effort from the government and industry to help India from just being the digital back-office of the world to becoming a metaverse product-centric country. Now is the time to make a cohesive effort and rope in all stakeholders to set the foundation of a Web3 nation.