With the rise and popularity of the Metaverse, a question arises: how can it benefit all economies, in particular emerging and developing economies and not solely be something for wealthier nations?
The metaverse, which essentially projects to be the next chapter of the internet, where people can gather in a virtual world and interact with each other across various ways, is making its rounds. It has triggered the likes of Facebook – which in parallel changed its name to Meta – to embrace it, with its CEO, Mark Zuckerberg viewing it as “the future of the internet and of [his] trillion-dollar company”. It is shifting the company from a social media company to a metaverse company.
It is estimated that the metaverse will have a quarter of us will be working, studying, shopping and socialising for at least an hour a day by 2026. Also, around 30 per cent of the world’s organisations are projected to have metaverse products and services by then as well. Other stats, such as some from Citi, estimate that the direct metaverse related economy could be around $13trillion – where it can impact not just tech players but also the likes of cryptocurrencies.
But how can this also benefit emerging and developing economies and not just be rich nation trend?
It could bypass building physical infrastructure and build more effective ones
In comparison to developed economies, developing economies generally have less advanced infrastructures. However, the wider digital transformation happening across the world has, in many ways, helped emerging economies more so per value than already developed economies.
For instance, in the wider African continent, the emergence of fintech has helped a continent with various solutions in payments and remittances – despite generally having a relatively weak financial infrastructure overall. Ther is a ‘work with what we’ve got’ mentality, and this has seen fintechs like Kenyan M-Pesa help find solutions for many Africans with a relatively weaker infrastructure in comparison to the West.
In the case of M-Pesa, it has essentially given a digital structure to a region where generally much of the banking infrastructure is relatively weak. The importance of this cannot be understated as much of the population is still financially excluded from traditional banking services. The weaker infrastructure coupled with an excluded population could potentially benefit from a metaverse that offered a new solution and experience. Banks this year have slowly shown an interest – with announcements from the likes of JP Morgan Chase, Korea’s Kookmin Bank, HSBC and UK fintech Sokin planning on offering some type of service in the metaverse.
Can it potentially slow down urbanisation and help rural communities
One of the challenges that many emerging economies have had as been the growth of cities – which proves challenging – especially with a general lack of urban planning to absorb a large influx of rural workers and people. Also, a common challenge amongst both emerging, developing and developed economies, is the general disparity of services and advancements that large urban areas outstrip their more rural citizen counterparts.
From a survey published by Joseph Johnson last year, the key benefits of the metaverse were mostly around mobility, such as “overcoming obstacles that prevent us from doing something in real life”, “traveling the world without moving”, and “connecting with new people without feeling awkward”.
With a metaverse aiming to offer a new form of experience for people in the future, it can potentially reimagine a future where being in the city is not a necessity. It can also help cater to rural areas, especially in developing and emerging economies that have a lack of education, healthcare and traditional financial institutional access – to name a few.
The pandemic and the general rise of digital transformation prior to it has taught us the importance of digitalisation.
For instance, with education, millions of students across the world had to go virtually overnight through e-learning at the height of the coronavirus. Should the metaverse keep up with what its promising, a new experience could improve e-learning.
The future is still unsure but more needs to be done
Nevertheless, for this to work, emerging economies and developing countries will need to have, at the very least, the most basic infrastructure which unfortunately many still lack. For example, millions of people still do not have internet access (a case study is Malawi, Africa where in 2020 their internet penetration was only at 14.2 per cent). Nearly two billion people, globally, still do not have access to digital financial services – which could limit the potential of its metaverse participation.
The most important factor – both for developed but especially developing and emerging economies – is education and awareness of the metaverse and its adoption by the everyday citizen. The metaverse will need to be inclusive so it doesn’t become a fad for a certain populace – but rather one where everyone can one day access and benefit from it.