Owning The Metaverse Opportunity

In October 2021, when Facebook rechristened itself as Meta, the world sat up. It took notice, for the first time in a big way, of the idea of a metaverse promising an immersive virtual reality world full of amplified experiences. Two months later, in December 2021, when Bloomberg came out with its master analysis of the metaverse opportunity, pegging it at a whopping $800 billion by 2024, the world hurried to make the opportunity it's own.

Since early this year, there has been a frenzy to drive and participate in the meta ecosystem at its various nodes, be it hardware, software, services, and content through VR/AR, games, simulations, experiences, NFTs, blockchains, etc. In a world where economies are slowing down and looking for the next big wave to ride on, private organisations and public institutions are both trying their best to corner a share of the metaverse ecosystem.

For most of the internet's evolution, a few countries dominated web 1.0 and web 2.0's technology and provider scape. The rest of the world was either a consumer or participated only in the services layer of the ecosystem. A large chunk of the ecosystem was ideated, developed, managed, and monetised by companies in the United States. Only China, with its choice to remain in total control and create its web 2.0 ecosystem insularly, provided some counterweight to the technology ecosystem that the USA steered. The web 3.0 opportunity provides nations that were hitherto on the periphery and primarily consumers to the web 2.0 ecosystem, yet again the chance at greater ownership and participation.

Several cities and countries have taken heed. Dubai (UAE) is fast moving to diversify itself into the web 3.0 economy by allowing blockchain and crypto businesses to flourish and is creating its own metaverse plays. Similarly, Seoul (South Korea) is leading the pack regarding government-articulated policies on the metaverse. Then there are countries like Barbados that have notched it up by creating Governance capability through the metaverse. Also, Shanghai (China) has devised its plan to leverage the metaverse opportunity to aid the nation's economic recovery.

India has yet to announce either an official web 3.0 or a metaverse-related policy. For now, the articulation of the metaverse in the public domain here has been centred on either creating digital twins to provide services, managing issues for citizens, or helping with supporting tourism-related activities. There is no clear policy stance on how India wishes to exploit the opportunity presented by the metaverse and the web 3.0 ecosystems. 

It is not that India is not conscious of the potential that web 3.0 offers. In December 2021, it came out with the National Strategy on Blockchain document that identified resource centres for developing the National Blockchain Framework. Budget 2022 also announced the establishment of a task force focused on employment opportunities in the Animation, Visual Effects, Gaming, and Comics (AVGC) areas. Concretely owning the metaverse opportunity for India should be centred on the following thought streams:

1. Focus on making India's metaverse foray IP dominant and services prevalent: The US has way less number of people (in absolute terms) working in the technology industry than India. Yet, the contribution of approximately $1.8 trillion of the industry to the USA's GDP is way higher than the industry's roughly $ 227 billion contribution to India's GDP. This implies that the US has IP-led businesses in technology, primarily products ‒ hardware or software, while India has settled to provide services. Given the immediate temptation of the massive employment generation potential attached to delivering services in the metaverse ecosystem, India needs to ensure that it effectively balances both ends ‒ IP-led products and services. Providing investment nudges for public and private capital towards core technologies and products that can be patented will be critical.

2. Utilise numbers to drive the growth of home-grown businesses at all the nodes of the metaverse ecosystem: Just the way it put its foot down on the import of drones in the country and gave a fillip to the development of this new and possibly critical industry in the country to come up rapidly, India needs to do a repeat with all nodes of the metaverse ‒ hardware, networks, software, and content. Given its large and willing population combined with its superior technology infrastructure and engineering talent, India can easily create the necessary momentum for critical mass to support the various nodes of the metaverse ecosystem. This implies that there needs to be a concerted policy-level nudge to increase the adoption of India-made technologies for the metaverse ecosystem. It also means driving talent and consumers to India-based players in the ecosystem. This could be through data localisation needs, local hardware sourcing, preferential taxation, public services exclusive to home-grown metaverses, etc.

3. Resolve ambiguity around metaverse issues: India needs to quickly rest all ambiguity around cryptos, digital assets, data storage, user privacy, IP rights, skillsets development, etc. It must move beyond resolving ambiguity to extending new ideas and technological breakthroughs in these and other areas relevant to the metaverse ecosystem, such as standardisation, interoperability, etc. The first step is to articulate a lucid web 3.0 and, more specifically, a metaverse policy for the country.

These pointers can significantly ensure that India not only pitches into but also owns the metaverse ecosystem meaningfully and successfully.

The author is a Tech Entrepreneur and Social Innovation Strategists