The industrial metaverse: the reality beyond the hype

The metaverse – the mirroring of real-world activity in immersive, 3-D digital spaces – has been one of the most over-hyped (and possibly least understood) technology developments of recent decades. 

The first wave of hype peaked around the turn of 2021–2022 as Facebook owner Meta laid out its vision for the metaverse as “the next evolution in social connection and the successor to the mobile internet,” with tech analyst groups such as Gartner boldly predicting that by 2026 a quarter of people would be spending “at least one hour a day in different metaverses for work, shopping, education, social, and/or entertainment.”¹

To date, that grand vision has proved more virtual than reality – even Meta recognizes its version of the metaverse could take 10 years or more to come to fruition. While the hype has certainly cooled, the many reports of the “death of the metaverse” seem greatly exaggerated and premature. 

The fact is, say informed observers such as Magdalena Dellinger, Technology & Innovation Manager in the Corporate Technology Office of G+D, the proto-metaverse is already here, with the initial hype having given way to the progressive application of many of its core elements in both new and adapted business models.

Key elements of the metaverse are evident in increasingly immersive virtual reality games and augmented reality apps. But it is also being applied more widely in industry, in advanced digital twin environments, process simulation, and in the use of augmented reality to enhance maintenance tasks. In healthcare, it is an enabler for “extended reality” that supports surgery in highly complex operations.² And it is present in the form of virtual experiences that enable hands-on training, immersive meetings, and brainstorming sessions. 

The fact is, the industrial metaverse is going mainstream, with many businesses actively exploring or implementing increasingly sophisticated use cases. The 2023 industrial metaverse study by Deloitte found that 92% of the surveyed executives said that their company is experimenting with or adopting at least one metaverse-related use case. And, on average, they are currently running more than six. “Manufacturers are building on their smart factory momentum to springboard into the industrial metaverse,” Deloitte consultants observe.³

That is echoed by consultants at Arthur D. Little. Their perspective is that the industrial metaverse is a further evolution of discrete technologies that already exist today but are being progressively extended to ultimately represent an end-to-end, real-world industrial system, including external elements outside the company and the environment within which it operates. As such, there may be no such entity today as “the industrial metaverse” but, rather, multiple platforms running fast-evolving Industry 4.0 technologies that are currently non-interoperable, but which represent big steps in that direction.⁴

As the adoption by industry broadens, there are some major questions for business leaders. Where is the early application of the industrial metaverse showing the greatest potential for gains in productivity and competitiveness? What are the main challenges organizations face as they enter the new dimensions of the industrial metaverse – from identity and interoperability to payments? And where does the concept go next under the inevitable influence of AI?

The start of a virtual industrial revolution

Given those rapid developments, it is worth defining the purpose and scope of such virtual environments and the opportunities they present for organizations and individuals – as G+D’s Innovation Lab recently did. (See box “The metaverse: defined”)

Any such definition is not set in stone and is likely to change as the metaverse evolves. But industrial organizations are certainly discovering where the technology can add value to their operations – from production and supply chain to R&D and customer engagement. Here are just some areas of high interest:

Enhancing processes 
By creating process simulation environments in which they can test-drive and refine new processes, businesses can avoid costly mistakes, optimize their process flows, and achieve higher throughput. That opportunity shows itself to be the most popular use case in the Deloitte survey, with half of companies saying they had either already implemented process simulation or were already experimenting with it. Creating a simulated environment that can be “walked through” applies as much to a company planning crowd flow in a new international airport as to a manufacturer looking to retool its production line for a new product.

Cutting costs/boosting efficiency
The application of the industrial metaverse is also a route to reducing business costs in many areas. For example, when prototyping an early-stage design such as an aircraft engine, a virtual twin of the physical design can be tried, tested, and refined until the design is optimal. That makes for lower development costs and arguably a more successful product. One major German car company, for example, calculates that its use of metaverse platforms has already resulted in a planning process that is 30% more efficient.⁵

Boosting customer engagement through enhanced interaction
Creating immersive customer experiences and virtual aftermarket services – from providing, say, a preview of a holiday resort or to allowing the test drive of a highly customized car – can prove highly valuable in sales engagements. 

Addressing skill shortages
In areas such as complex assembly and maintenance, new team members can learn skills faster in a safe environment via immersive training sessions and augmented reality. Over half of all companies in the Deloitte study said they were already using or experimenting with metaverse environments for training.

Key challenges of the metaverse

Taking advantage of such parallel digital worlds comes with many inter-related – and substantial –challenges. And as the number of use cases grows in scope and sophistication, those challenges will only become more significant. They include:

1. Securing identity
Secure engagement in the metaverse will require environments to be well protected against unauthorized access and cyber-attacks. They will also need to adhere with relevant rules, legislation, and standards – such as age restrictions and currency exchange limits. Secure identity will be a central pillar as well as an enabler of those requirements. 

According to the World Economic Forum (WEF), the pivotal role of identity is shaping immersive, human-centric experiences.⁶ Indeed, an ability to verify and safeguard digital identity and privacy will be vital for avoiding fake personas/impersonation, malicious activity, and any number of other security breaches that could compromise virtual spaces. 

Above all, to gain entry to, engage with, and transact within online spaces, participants will need to prove and maintain a trusted view of who they are. That makes self-sovereign identity (SSI) a particularly useful approach. With SSI, users only have to reveal the specific piece of their identity data that is necessary for the immediate purpose – for example, only their date of birth when entering a metaverse that is age-dependent. 

Such a “MetaSSI, “says G+D, would be a metaverse-compatible solution (aligning with the decentralized concept of the Web3 universe) that caters to human and/or asset IDs, giving individuals autonomy over their digital identities and bolstering the privacy and trust of metaverses. “Today, early metaverse users are lacking control over their digital identities, preventing them from regulating their use on a case-by-case basis, thereby impacting privacy and user trust in and around the metaverse,” says Veridos’s Muschik.

2. Interoperability between virtual worlds
To be fully effective, industrial metaverse environments shouldn’t ultimately sit in fragmented isolation. Organizations will need to establish ways to create secure gateway mechanisms not only between the real and virtual worlds, but also between multiple metaverse platforms.

Today, there is no secure way to exchange information between different user types (people, machines, APIs, and other metaverses), says G+D. Creating a “metalink” will be vital for many areas such as in the automotive industry where the complex nature of work programs (whether virtual or real) means participants engage in high levels of collaboration. One company working on the wheel assembly for a new car model within its metaverse should have secure access to select segments of the metaverse platforms of other partner companies who are working on inter-dependent areas of the overall design. 

Interoperability in the metaverse will need to present “frictionless experiences [that] enable users to move across and between the physical and digital world with relevant data, digital assets, and identities,” says the WEF, with different metaverse users set up as the custodians of their own data and digital identity.⁷

3. Establishing the “moneyverse”
As a digital frontier where many businesses and financial institutions are seeking to operate, metaverse platforms will need to establish a foundation for secure payments. “What is needed now is the will and expertise to develop the secure payment infrastructure necessary for companies and financial services organizations to confidently and safely carry out transactions in the metaverse,” says Dellinger. “The importance of such a ‘moneyverse’ lies not only in promoting trust among users but also in establishing a robust, secure, and efficient financial environment within this new reality.”

A moneyverse would encompass secure clearance, validation, and exchange mechanisms to ensure “real” money ultimately is exchanged as a result of transactions in the virtual world, accompanied by governance to cover such areas as know-your-customer (KYC) and anti-money-laundering (AML) frameworks. The goal: to effectively establish a secure economic environment within and around the metaverse.

AI meets the metaverse

The next big development steps in the industrial metaverse journey will involve:

• extending digital simulations beyond discrete physical assets to include multiple connected assets.
• integrating internal processes and functions into different metaverses
• spreading capabilities to upstream and downstream business activities so an entire industrial system is involved.⁴ 

Inevitably, those steps will be accelerated by the rise of AI. As the head of Meta’s Global Business Group, Nicola Mendelsohn, highlighted at the WEF in 2024: “You can’t have a metaverse without AI and you need AI in order to have the metaverse. These two things come together … as very happy bedfellows.”⁸

For many businesses, the challenge now will be to develop a solid strategy for success in the era of the industrial metaverse. The potential benefits they can expect in terms of productivity gains could be as high as “multiple double-digit percentages,” according to consultants at Arthur D. Little – enough to redraw the competitive landscape in many industries.

Published: 24/10/2024