Is there a territorial dimension to the Metaverse?

June 2024

The term Metaverse has been buzzing, capturing the imagination of gamers, developers, and business tycoons alike. Often depicted as the successor to the Internet, the Metaverse seems to promise a future where digital and physical realities converge. This blog post delves into what the Metaverse is, and what it territorial dimension might me.

Given the nature of the topic, the blog post has been written in collaboration with ChatGPT, trying to exploit some artificial intelligence on the issue.

What is the Metaverse?

The Metaverse refers to a collective virtual shared space, created by the convergence of virtually enhanced physical and digital reality. It is persistent, providing a sense of continuity, and is interoperable, allowing users to take virtual items like avatars or objects from one platform to another. This concept is not just limited to virtual reality (VR) but extends to augmented reality (AR) and other technologies that blend the digital and physical worlds.

The concept of the Metaverse is not entirely new. It first appeared in Neal Stephenson's 1992 science fiction novel "Snow Crash," where humans interacted with each other and software agents in a 3D space. Since then, the idea has evolved significantly with advancements in technology:

• 1990s to early 2000s: Early forms of the Metaverse were seen in multiplayer online games like "Second Life," which allowed users to interact in a virtual world using avatars.

• 2010s: The acquisition of Oculus VR by Facebook in 2014 marked a significant investment in virtual reality, pushing the boundaries of virtual experiences.

• 2020s: The rebranding of Facebook to Meta in 2021 symbolises a strategic shift towards embracing the Metaverse, highlighting its potential as a multi-dimensional canvas for social and commercial interactions.

Today, the Metaverse starts being utilised in various fields, demonstrating a wide array of applications:

• Gaming: Platforms like Roblox and Fortnite have transformed gaming into a space for virtual concerts and events, where millions interact through their avatars.

• Social Interaction: Virtual reality platforms like VRChat and AltspaceVR allow people to meet, interact, and participate in activities together in a virtual space.

• Education and Training: The Metaverse offers immersive environments for training and education, where medical students can perform virtual surgeries or mechanics can practice on virtual engines.

• Commerce: Brands are exploring digital storefronts and virtual goods markets within the Metaverse, offering everything from fashion to real estate in virtual formats.

Future prospects of the Metaverse

While still in its nascent stages, the Metaverse represents a significant leap towards a more integrated digital lifestyle. Its continuous evolution promises to transform not just how we interact with technology, but potentially every aspect of how we live, work, and play. As we stand on the brink of this new virtual frontier, the Metaverse beckons us to imagine and shape a future that blurs the lines between the digital and the physical.

The future of the Metaverse is said to hold “limitless” possibilities, potentially reshaping various aspects of daily life. For example, the Metaverse might redefine remote work, offering virtual offices that replicate the experience of physical workspaces for better collaboration and communication. It could also change our social interactions, with digital identities and avatars becoming as significant as real-world personas. There are also expectations that new economic models could emerge, including digital currencies and virtual real estate, expanding economic activities beyond traditional markets. Furthermore, no doubt, with the growth of the Metaverse, regulatory frameworks will need to evolve to address issues of privacy, security, and digital ownership.

By exploring the Metaverse, we might not just witness a technological revolution but participate in the creation of a new world. The journey is just beginning, and its trajectory are rather unpredictable.

The territorial dimension

Even though the Metaverse seems to move us into a virtual world, there is also a territorial dimension. This is rather complex and multilayered. The territorial dimension includes aspects such as server locations, the geographic distribution of developers and users, and the economic benefits accruing to various organisations and regions they are placed in, etc:

• Server Locations. The Metaverse relies heavily on the infrastructure of data centres and servers that are typically located around the world. These servers are critical for hosting the services and experiences that make up the Metaverse, ensuring low latency, high availability, and reliable performance for users globally. Major tech companies have extensive networks of data centres across different continents to manage the heavy data and processing requirements of immersive virtual environments. The location of these servers often correlates with areas having robust infrastructure, favourable economic conditions, cheap energy and supportive regulatory environments.

• Developers and programmers. The development talent for the Metaverse is globally distributed, with significant concentrations in tech hubs like Silicon Valley, Seattle, Bangalore, London, and Beijing. However, as the tools and platforms for Metaverse development become more democratised, there are expectations that a growing number of developers from diverse geographic backgrounds enter the field. Remote work trends, have also decentralised the physical necessity of being in a specific location, allowing for a more geographically dispersed set of contributors.

• Users. The user base of the Metaverse is intended to be as global as the internet or Metaverse itself. While early adopters are often in more technologically advanced and economically developed regions, the goal of many companies investing in Metaverse technologies is to expand access to these virtual environments globally. This expansion is contingent on the availability of affordable and capable hardware, such as virtual reality and augmented reality devices, and robust internet connectivity.

• Organisations profiting. The economic benefits of the Metaverse are currently captured by a variety of stakeholders. Companies like Meta, Microsoft, and Apple are investing billions into the infrastructure and development of Metaverse technologies, positioning themselves as key stakeholders in the economic landscape of this new domain. In addition, numerous startups around the world are exploring niche areas within the Metaverse, such as virtual real estate, fashion, and social platforms, potentially reaping significant economic benefits as the technology matures. As the Metaverse expands, so too does the potential for content creators, artists, and businesses to monetise virtual experiences, goods, and services. This has is expected to lead to new forms of entrepreneurship and business models.

• Regional economies. Regions that are home to major companies developing Metaverse technologies or that have policies supporting digital innovation may see economic growth from job creation, investment, and technological advancement.

The territorial dimension of the Metaverse thus reflects a dynamic interplay between technology, economy, and culture, distributed across the globe. As the Metaverse evolves, it is likely that these dimensions will continue to expand, bringing more diversity to the development landscape and broadening the economic impact to include a wider array of regions and demographics.

The European cohesion dimension

If the Metaverse has a territorial dimension, it also may affect cohesion in the EU. The Metaverse's effects on territorial cohesion involves assessing how this emerging technology might influence economic, social, and cultural integration among EU member states. The Metaverse, by virtue of its digital nature, offers both opportunities and challenges in promoting cohesion across different regions.

The Metaverse may hold some opportunities for actually strengthening cohesion in the EU. ChatGPT highlighted among others the following.

• Innovation and investment. The Metaverse could spur innovation and attract investment in digital infrastructure and related industries across the EU. Regions that become early adopters or hubs for Metaverse development might benefit from job creation and technological advancements.

• New business models. Smaller enterprises and entrepreneurs across the EU can access global markets more readily by creating virtual goods and services within the Metaverse, potentially levelling the economic playing field.

• Cultural exchange and interaction. The Metaverse provides a platform for enhanced cultural exchange and interaction among EU citizens, potentially fostering a greater sense of a shared European identity.

• Education and training. Virtual environments can offer innovative educational and training opportunities that are accessible to a broader population, helping to bridge educational gaps across regions.

Where there is light, there is also shadow. The Metaverse may also lead to new cohesion challenges in the EU. ChatGPT highlighted among others the following.

• Digital divide. There is a risk that disparities in digital infrastructure between EU regions could widen, with wealthier or more technologically advanced areas benefitting disproportionately from the Metaverse. Ensuring equitable access to necessary technologies and broadband is critical.

• Capital concentration. The centralisation of technological power and capital in a few multinational corporations could undermine local economic development efforts unless policies are implemented to encourage local participation.

• Social Isolation. As interactions move increasingly online, there could be negative impacts on physical community ties and local social structures, potentially leading to increased social isolation.

• Regulatory divergence. Varying national regulations on digital privacy, data security, and online interactions could lead to fragmented experiences for users across different EU countries, complicating the unified regulatory framework needed for a cohesive Metaverse experience.

• Cultural Homogenisation. There is a risk that dominant cultures could overshadow smaller or less represented groups within the EU, potentially eroding local cultures and identities.

To maximise the benefits of the Metaverse for territorial cohesion within the EU, policymakers could consider to:

• Invest in digital infrastructure. Ensuring that all regions have access to high-speed internet and affordable technologies to engage with the Metaverse.

• Foster innovation ecosystems. Supporting local startups and enterprises to participate in Metaverse development through grants, subsidies, and educational programs.

• Harmonise regulations. Developing and further strengthening EU-wide regulations that address key issues like digital rights, data protection, and cybersecurity in the Metaverse.

• Promote inclusive content. Encouraging the development of content that reflects the linguistic and cultural diversity of the EU to ensure all communities can see themselves represented.

Overall, the Metaverse might presents an opportunity for enhancing territorial cohesion in the EU, but it also requires careful management and proactive policy interventions to ensure that all regions and communities can benefit equitably.

by Kai Böhme