Web3 and immersive-reality technologies in the McKinsey Technology Trends Outlook 2022

New analysis by the McKinsey Technology Council highlights the development, possible uses, and industry effects of advanced technologies. These include immersive technologies and those that will define the Web3.

Technology continues to be a primary catalyst for change in the world. Technology advances give businesses, governments, and social-sector institutions more possibilities to lift their productivity, invent and reinvent offerings, and contribute to humanity’s well-being. And while it remains difficult to predict how technology trends will play out, executives can plan ahead better by tracking the development of new technologies, anticipating how companies might use them, and understanding the factors that affect innovation and adoption. This is precisely the purpose of the McKinsey Technology Trends Outlook 2022 , which this year focuses on two major thematic groups: Silicon Age, which encompasses digital and IT technologies, and Engineering Tomorrow, which encompasses physical technologies in domains such as energy and mobility.

Among the technologies examined, we focus on Web3 and immersive technologies. Here is what emerges from McKinsey's analysis.

?Why leaders should pay attention to the Web3

According to McKinsey, Web3 includes platforms and applications that enable shifts toward a future, decentralized internet with open standards and protocols while protecting digital-ownership rights, providing users with greater ownership of their data and catalyzing new business models.

Why should leaders pay attention? For five fundamental reasons:

1)???Disruption of existing business models: Web3 enables the disintermediation of business models by encoding existing functionality into autonomous smart contracts. Web3 could offer wider economic opportunities (eg, decreased fees), moving the accumulation of value away from middlemen and toward users and suppliers.

2)???Rapid innovation through open protocols: Rapid innovation is unlocked by the opensource and modular nature of Web3, which allows for rapid development, testing, and scaling of applications, built by a global developer base. This composability and growing developer base could increase the level of innovation exponentially over time.

3)???Increased access and inclusion: Web3 is public and permissionless, meaning that everyone can access, create, and own information and assets, globally, without intermediaries.

4)???Opportunity to build new infrastructure: Web3 infrastructure is nascent; new applications require new tools and infrastructure to scale and meet expected service requirements (eg, development platforms needed to build Web3 internet services, middleware software, node infrastructure, etc).

5)???Unified customer experience: Web3 enables a transition from omnichannel to unichannel, seamlessly integrating customers’ digital identity across applications by leveraging a common decentralized blockchain data layer, as opposed to a siloed view of customers that is limited to an individual business’s customer profile.

Retailers are already using Web3 technologies to create new offerings, devise new modes of customer engagement (eg, ecosystem loyalty programs, access to unique experiences), assure the authenticity of goods, tap into new royalty-based revenue streams, accept novel payment methods (such as “stablecoins”), and track and orchestrate logistics across loosely coupled global supply chains.

Immersive-reality Technologies, towards the metaverse

Immersive-reality technologies use sensing technologies and spatial computing to help users “see the world differently” through mixed or augmented reality or “see a different world” through virtual reality. Immersive-reality technologies will have a significant role to play in the metaverse.

According to McKinsey analysis, most mature immersive-reality solutions fall under a few key themes, such as:

1)???Learning and assessment | Learning and training: Hands-on skills and procedures training - especially useful for simulating unusual or dangerous edge cases that are difficult to simulate safely in real life, thus building muscle memory. Assessment: Use of the same infrastructure (eg, 3-D models, procedure rules) to stress-test the workforce’s knowledge, skill, and capability in safety and efficiency and target further training needs.

2)???Product design and development | Product design: Creation of digital twins to enable virtual walk-throughs of a physical environment (eg, construction site) or a physical product (eg, new space satellite), enabling more efficient product prototyping and test simulations. Development: Simulation of process design, such as a software engineer “grabbing” blocks of code overlaid virtually onto factory equipment to redesign the process flow, then pushing the equipment back into production.

3)???Enhanced situational awareness | Overlay of data visualization enables more productive assessment of situations. Retail example: Store manager observes store while wearing AR glasses that display sales data overlaid on sections and products. Manufacturing example: Lead engineer conducts factory operations and maintenance remotely; VR tech enables workers to conduct virtual walk-throughs, with visualized data and pop-up decision options for areas requiring maintenance or repair.

4)???B2C use cases (eg, gaming, fitness, retail) | Live events: Gaming, virtual workouts, and other virtual events mimicking real-life experiences such as concerts, conferences, sporting events, and fashion shows. Virtual showroom: Shopping by virtually walking through stores, trying on new products, etc.

Use cases are already emerging both horizontally and vertically across industries. For example, in the Retail sector virtual store and digital showrooms are emerging. Around 33% of customers who are already active on the metaverse have purchased real-world items there. There are also already some examples of companies experimenting with the metaverse for customer services, and companies exploiting immersive technologies to redefine their design and product development processes.

Indeed, some of the benefits that immersive technologies will bring go in the direction of:

1)??Process improvement through early-warning-detection mechanisms, risk management, improved quality assurance, on-the-job visual guidance, and more.

2)??Introduction of new products and services by engaging consumers in new ways and enhancing customer experiences.

3)??Increased collaboration by facilitating more engaging virtual-team interactions, without the need of being physically present.

What are your topics of debate related to the trends?