Deloitte analysis: With sustained investment, the GDP impact of the metaverse on Asian economies could reach US$1.4 trillion per year by 2035 has been saved
Deloitte analysis: With sustained investment, the GDP impact of the metaverse on Asian economies could reach US$1.4 trillion per year by 2035
SINGAPORE, 15 November 2022 – A recent analysis performed by Deloitte estimated that the impact of the metaverse to GDP in Asia could be between US$0.8 and 1.4 trillion per year by 2035, which is roughly 1.3 to 2.4 percent of overall GDP. This may come to fruition over the long term should there be sustained technology investments made in the next five to ten years. How much is actually realised, and how quickly, depends on the unique strategies the underlying economies may take to accelerate economic benefits of the metaverse.
This analysis, consolidated into a report titled “The metaverse in Asia – Strategies for accelerating economic impact”, showcases the potential impact of the metaverse in 12 Asian economies (Hong Kong, India, Indonesia, Japan, Mainland China, Pakistan, the Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam), and highlights the strategies that these economies are adopting to reap the rewards of the metaverse. Each economy featured in this report is approaching the metaverse from its own unique direction, which makes the region an interesting one to watch.
Early metaverse platforms are already being used by millions in Asia
Awareness of the metaverse in Asia is high, and early metaverse platforms are already being used by millions of people in the region – gaming, socialising, creating digital twins, attending concerts and purchasing items. For example, South Korean app Zepeto has over 300 million registered users worldwide. However, a fully immersive metaverse with smooth real-time rendering of visually rich worlds for millions of simultaneous users is still years away.
The metaverse will have a transformational impact on Asian economies
While early estimates suggest that the potential growth and contribution of the metaverse can be significant globally, the timing and size of the economic impact is challenging to forecast and will depend on a wide set of socioeconomic factors and enablers.
Nevertheless, the metaverse is envisioned to create new market, business and employment opportunities as well as improve the way we work, consume and collaborate. If these developments are fully scaled, it will be transformational for the more than 4 billion people who live, work, and play in the region.
Asia is an interesting region to watch for metaverse developments
From software to hardware, regulators to entrepreneurs, cultural to digital talent, Asian economies are leaning in from many directions in all things metaverse. Some key highlights of the region include:
- Asia dominates the hardware supply chain in terms of raw materials and the manufacture of electronics and semiconductors.
- The region has over 1 billion mobile gamers, the biggest mobile player base worldwide.
- South Korea was the first major economy to articulate a comprehensive blueprint to foster its metaverse industry.
- On the regulatory front, Singapore, Hong Kong, India and others are creating positive business environments and instituting clear regulatory guardrails, ensuring businesses and consumers alike can engage with the metaverse safely.
- Indonesia, Thailand and Vietnam are pioneering new business models especially among small- and medium-sized enterprises, and innovating with web3 and blockchain technologies.
- The region has rich and diverse cultural legacies to tap into to develop compelling content and experiences. For example, Japan is leveraging its heritage as a pioneer of the video game industry to create new metaverse industries.
- India, the Philippines and Pakistan are key sources of global tech talent.
“The metaverse is inevitable. Developing the technology stacks, human capital and regulatory frameworks to realise Asia’s trillion-dollar metaverse potential will benefit a wide range of industries and economic activities,” said Mr Duleesha KULASOORIYA, Managing Director, Center for the Edge, Deloitte Southeast Asia.
“The successful future of the metaverse calls for action not just by governments, but all ecosystem actors. While the metaverse is still in its early forms, it is now a good time for businesses and players to experiment, find their edge in the metaverse, and identify opportunities to scale these edges,” added Duleesha.
The Singapore story
Deloitte’s analysis suggests that the potential 2035 economic impact of the metaverse in Singapore is US$9 to 17 billion per year, or 1.3 to 2.4 percent of overall GDP.
With a small population and few natural resources, Singapore’s transformation into a global economic and financial hub within five decades has been driven by political stability, robust regulatory frameworks, and a plug-and-play business environment that is open to investors. These stellar credentials have made Singapore a top pick for companies as a base for their metaverse operations in the region.
Key enablers for Singapore include its efforts to strengthen regulations for online safety and cryptocurrencies which will improve social acceptance, creating a vibrant ecosystem for technology and digital content creation businesses alike, and developing a strong bench of international and local digital talent.
Key sectors to watch are:
- Healthcare: Singapore has begun to use immersive virtual technologies to enhance medical education and medical services with Singapore conducting the world’s first holography-guided heart surgery.
- Urban planning: Singapore was one of the first countries to implement a country-scale digital twin, which can unlock commercial opportunities in multiple sectors from real estate to retail.
- Gaming: As it develops its reputation as an e-sports destination, Singapore could tap into the younger demographic that is expected to spend more time and money in the metaverse in the future.
“Singapore can leverage its strong global reputation as a financial hub to be a key market that discovers ventures into the next internet, such as the metaverse. Early pivots can be to attract top metaverse companies and investors to Singapore. This will in turn help the country position itself as an early value-adding innovator to attract tech talent globally to its shores. Sectors to watch include healthcare, urban planning and gaming, as the Singapore government rides the crescendo to accelerate the economic and social benefits of the metaverse,” said Ms Michelle KHOO, Director, Center for the Edge, Deloitte Southeast Asia.
To read the full report, including detailed analysis of the 12 economies featured, please click here.
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