Investment promotion is an ideal springboard for the rollout of virtual reality (VR) and augmented reality (AR) across government services, according to a report by US think tank the Information Technology and Innovation Foundation (ITIF).
Some investment promotion agencies (IPA) have already begun experimenting with immersive technologies, and uptake is expected to accelerate as continuing travel restrictions and digitisation reshape their operations.
The report, released by the ITIF in August, argues that AR and VR’s ability to overcome the barriers of physical space has huge potential in activities that heavily rely on site visits.
“The big takeaway that a lot of [investment] agencies don’t recognise is that this technology is available and affordable now,” says Ellysse Dick, ITIF policy analyst and co-author of the report. “This isn’t a future projection: it’s something they can start to integrate into their activities at this moment.”
The report comes as the pandemic renews interest in immersive technologies. According to Statista, global sales of VR headsets were expected to hit 68 million units last year, up from five million units in 2016. Market research firm Mordor Intelligence forecasts the global VR industry will grow from $17.25bn in 2020 to $184.66bn by 2026.
Boštjan Skalar, CEO of the World Association of Investment Promotion Agencies (IPAs), says some of the most advanced members in Europe started using AR before Covid-19 hit. “Maybe because it was still possible to travel, investors didn’t receive it so well. But I presume that now there is a pressing need to travel less, this will gain in importance.”
“It will now be even more important for IPAs to be aware of these technologies and adapt, at least up to a certain point,” he adds.
Better than a slideshow
For IPAs, the biggest value-add is likely to be in investment generation, via creating and touring virtual replicas of buildings, streets and cities. While investors are less likely to choose locations without physically stepping on the ground, these tools enable more meaningful interactions earlier in the process.
The real-estate sector is already using this technology to help potential purchasers visualise how they might use an empty site. “If an investor doesn’t want to do a site visit during their first meeting … they could use a headset with a tour of a site in a way that a slideshow wouldn’t necessarily do,” explains Ms Dick.
The report notes that for IPAs, the easiest starting point for AR or VR adoption is image-building activities, via immersive promotional events such as conferences and exhibitions.
Public sector springboard
The report notes that governments in the US, UK, Finland, Sweden and France are already using immersive technologies in the likes of healthcare, military and education. However, investment promotion is believed to be the ideal springboard for more widespread use across public sector activities.
“Investment agencies interact a lot with the private sector and there is interest in the technology on that side,” Ms Dick adds. In addition to real-estate, advanced manufacturing and retail industries are also familiar with immersive technologies. Mr Skalar notes that many consultants advising locations are using — or advising IPAs to use — this technology as an entry point.
It means businesses have a gentler learning curve in adopting VR and AR than the general public, which makes investment promotion a good testing ground for governments. For IPAs, these technologies have the extra incentive of showcasing the country’s innovation capabilities to potential investors.
The report suggests that concerns about accessibility and user hardware could reflect “lingering perceptions from the earlier days of these technologies.” AR can be experienced using a mobile phone or tablet; VR can be accessed via simple headsets that a mobile phone slots into, or web applications on a computer.
More advanced headsets are also becoming increasingly available, more user-friendly and less expensive. “All of these things are trending in the right direction for more widespread adoption,” Ms Dick adds. But the industry has a ‘chicken-and-egg’ problem, with both content creation and demand hamstrung by the others’ growth.
For IPAs, expertise is another hurdle to AR and VR adoption. “Many IPAs are actively searching for talent that will help them move faster,” Mr Skalar explains. “Tech is one thing, but this requires people with certain skills.”