In early July, news began circulating of the government of Dubai preparing to take some of its departments into the metaverse, which would allow users access to services in an integrated network of 3D virtual worlds. This is one of the United Arab Emirates’ many initiatives in the metaverse – a rapidly growing global industry and an important component of developing an advanced digitalized society. The UAE is turning to the metaverse to improve overall industrial competitiveness and increase productivity and efficiency in an increasingly digitalized world. Emirati leaders hope the metaverse and Fourth Industrial Revolution technology will provide new avenues to diversify the UAE’s economy away from hydrocarbons.
The metaverse is a virtual reality platform for living a second life online. However, while augmented and virtual reality are technologies for creating 3D environments with certain purposes and functionalities, the metaverse is an open, shared, and, in theory, limitless virtual world created by users. Its evolution is expected across three overlapping phases: emerging, advanced, and mature. The emerging stage, which has already begun, is expected to continue for the next four to five years. Currently, markets are exploring and experimenting with applications. The advanced phase is expected for 2024-27 and will provide more direct opportunities within the metaverse. The mature phase, likely to be reached about eight years from now, will progress toward immersive experiences.
The industry’s global market size is projected to reach $1.6 trillion by 2030, with a 43.3% compound annual growth rate. There is a race among companies and countries to invest in the prospective digital world to influence how it is developed. Companies such as Microsoft, Google, Qualcomm, and Nvidia kicked off the race with significant investments in early 2021. Investments in the industry from a wide range of businesses reached $120 billion in the first five months of 2022, more than double the $57 billion investments made all of 2021. Companies in Dubai and Abu Dhabi owned or funded by the government have joined the race, launching new initiatives in the metaverse, in efforts to be pioneers in the growing global industry with a vision to gradually replace the UAE’s oil wealth with advanced technology.
Taking the Virtual Lead
In early May, the ruler of Dubai, Mohammed bin Rashid al-Maktoum, announced the launch of the Dubai Metaverse Strategy. The strategy aims to increase the contribution of the metaverse sector to the emirate’s economy to $4 billion by 2030. With a task force to track the latest developments in the digital economy, including technology and metaverse trends, and a committee to focus on key pillars and objectives of the Dubai Metaverse Strategy, Dubai aims to become a key player in the virtual world. To do so, Dubai will build on successes the emirate and the broader UAE have already had in the technology field: The Economist Impact’s Digital Cities Index 2022 ranked Dubai first in the Middle East and 18th globally in its inaugural ranking evaluating the extent and impact of digitization in 30 cities across the world.
Several important steps led to the Dubai Metaverse Strategy. In 2019, Dubai established a virtual business license. On December 27, 2021, Dubai introduced the world’s first virtual megacity – Metaverse Dubai. Different than any other metaverse project at the time, Metaverse Dubai was based on a real-world map of Dubai, recreating the city’s geography and topography. The UAE’s Ministry of Health kicked off 2022 by unveiling a new metaverse platform that allows individuals to access medical care virtually. In late March, the Dubai Municipality announced plans to create Dubai’s twin city in the metaverse – “One Human Reality” – while the Dubai Ministry of Economy hosted Investopia, the world’s first economic summit held in the metaverse. In April, Dubai World Trade Centre announced the launch of MetaIncubator – the Middle East’s first metaverse incubator – and Union Square House, a multibillion-dirham Dubai real estate agency, announced plans to launch the first metaverse mansions in the region this year, contributing to the growing wave of virtual real estate.
On May 4, Dubai’s Virtual Assets Regulatory Authority announced that it had become the world’s first regulator to make its debut in the metaverse with the establishment of its Metaverse HQ. On May 19, the Abu Dhabi Department of Economic Development signed a memorandum of understanding with SAP, a German multinational software corporation, to accelerate the digital transformation in the UAE. This includes a plan – “Industry 4.0” – to explore and launch Fourth Industrial Revolution technology initiatives in Abu Dhabi. On May 26, DP World, a world-leading, Dubai-based port operator, announced the formation of DPMETAWORLD, a platform for digital solutions in the metaverse, which is expected to launch by the end of the year. Soon after, on May 30, Everdome, a metaverse game, began auctioning 12,000 plots of metaverse land in the Everdome ecosystem in a virtual experience colonizing Mars. As on Earth, owners will have the right to develop these virtual plots of land and the opportunity to generate revenue or resell the plots in the future. The immersive journey to “live” on Mars will begin in Hatta, Dubai, Everdome’s mission launch site.
As part of the Industry 4.0 initiative, in mid-June, the UAE gathered representatives from 17 national and global tech companies for the “Champions Network Assembly,” to boost tech adoption in the industrial sector. In early July, Magnati, a UAE-based payment platform, launched the region’s first metaverse marketplace.
Implications of Industry 4.0
The large number of Industry 4.0 initiatives launched over the past year has sparked discussion regarding how the metaverse, among other Industry 4.0 technologies, may affect different parts of society. Some proponents of the metaverse have claimed it will promote inclusion in the health care and education sectors, allowing increased accessibility for people with disabilities, who will be able to enter the digital world and interact with others through their avatars, which can be created to resemble the ideal image of the users and can hide any disabilities if they choose. As the metaverse advances, education and health care may be more readily provided to the larger global population, enabling easier access, improving quality, and decreasing costs.
There is also optimism about the effects of the metaverse on businesses. The majority of UAE executives think the metaverse will have a positive impact on their businesses and organizations. For instance, DP World’s DPMETAWORLD includes an initiative to use the metaverse to solve supply chain challenges and other operational issues. The metaverse can help increase the efficiency and transparency of businesses, while also enhancing the sustainability of operations. In addition, the new opportunities for immersive training programs, meetings, and other routine procedures enabled by the metaverse could reduce training times by 50% and help reduce carbon emissions by eliminating the need for physical travel.
There are, however, some concerns about the metaverse. Emirati experts are worried about the effects the metaverse can have on mental health. Some argue that it will increase anxiety, fatigue, and depression – similar to effects seen with other technologies. However, some virtual reality proponents argue it can increase empathy, as the metaverse provides greater opportunities for increased interaction among people who might otherwise have never crossed paths.
The UAE has been simultaneously making other advances in the tech world, including in digital payments, cryptocurrencies, and artificial intelligence. But as the current crisis in the crypto industry indicates, investing in new technologies, such as the metaverse, can come with high risks. Despite the several factors driving investor interest, such as increased marketplace readiness and ongoing technological advances, the metaverse is a high-risk investment, with no guarantee of success, long-term interest, or even smooth development, despite the detailed plans put in place.
Into the Future
The UAE is demonstrating that it is willing to bet on the high-risk advanced technology industry. As the country seeks to diversify its economy, Emirati leaders hope the tech sector might become the new oil industry equivalent for the economy. Industry 4.0 is expected to improve the UAE’s overall industrial competitiveness, drive down costs, increase productivity and efficiency, improve safety, and create new jobs. The metaverse, a significant part of the Fourth Industrial Revolution, is the next promising frontier of technology – and the UAE wants to be front and center.