Virtual Reality’s Economic Impact

Virtual Reality’s Economic Impact
Renata Krieger

Since the internet’s dynamic impact on the economy in the late 1990’s, industries are on a continuous search for the newest innovation to improve their businesses. In recent years, virtual reality has gained popularity due to features like no other. Virtual reality allows viewers to observe augmented spaces without leaving their current setting. As technologies continue to transform the economy, virtual reality will play a significant role throughout industries such as retail and education, thus increasing GDP and consumer spending.

    In a classroom setting, for example, virtual reality enhances learning by using the headset as an online school. Additionally, this allows students to collaborate with peers and educators internationally as another form of an online class. As schools and universities allow virtual reality to contribute to their classrooms, the demand for the headsets increase. Predicted by Wired Magazine, the virtual reality industry will experience economies of scale within the next 5 years due to the rapid increase in demand for the headsets.

    Another industry taking advantage of virtual reality's innovating purpose includes retail ranging from clothing to home improvement. One downfall to the convenience of online shopping is not having the ability to try the selections on. However, virtual reality alleviates this problem by creating a virtual avatar in proportion to one’s real body. Online shopping, as well as virtual reality, changes the demand for certain types of jobs. Also, within home improvement stores like Carpet World, an augmented view of customers’ homes is provided by changing wall colors or flooring options. Wired Magazine describes the shift as, “An explosion of wealth that leads to the creation of a massive number of high-tech, good-paying jobs and one of the most prosperous sets of economic conditions in history”. The overall effect could be underemployed workers and discouraged workers in the retail industry as consumers online shop, leaving stores empty, while jobs are thriving in technology. Additionally, the labor force will remain the same during the shift, while the unemployment rate within retail workers increases. On the contrary, the increase in consumer spending and inventory investment through the demand of virtual reality decreases the possibility of a recession.

In conclusion, the virtual reality industry is projected to increase by over 50% between years 2018 and 2020. Statista shows an increase from $12.6 billion dollars in economic impact in 2018 to $29.5 billion in 2020. With this, virtual reality will significantly transform the economy as the internet did in the 1990’s.

Works Cited

Chacos, Brad. “Virtual Reality, One Year out: What Went Right, What Didn't.” PCWorld, PCWorld, 22 Dec. 2016, www.pcworld.com/article/3148754/virtual-reality/the-messy-magical-birth-of-virtual-reality

Digital, Brian Shuster Utherverse. “Could Virtual Reality Revitalize the Economy?” Wired, Conde Nast, 6 Aug. 2015, www.wired.com/insights/2014/10/virtual-reality-economy/.

“Global Virtual & Augmented Reality Economic Impact 2016-2020 | Statistic.” Statista, www.statista.com/statistics/615968/global-virtual-and-augmented-reality-economic-impact/.