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NEW STUDY: Estimated Economic Impact of Metaverse

By at 11 May, 2023, 2:29 pm

Small Business Insider

by Raymond J. Keating –

As the metaverse continues to develop, and its future is deciphered and debated, the combination of advancing computer, digital, internet, telecommunications, e-commerce, and virtual and augmented reality technologies promises to add considerable value for entrepreneurs, small businesses, large companies and, of course, consumers.

A series of regional studies by Deloitte, done for Meta Platforms, has just been released, and the estimates are fascinating and in line with what others have put forth.

Economic Contribution to U.S. GDP

Meta explained that these are “country-level economic impact estimates of the metaverse,” with “examples showcasing how metaverse technologies are already being applied in innovative ways, a localized discussion of the state of metaverse technology fundamentals and enablers, as well as economic policy insights relevant to those countries and regions with respect to the metaverse.”

As for the U.S., Deloitte noted: “Based on global metaverse investment scenarios set out in the literature, the potential economic contribution of the metaverse to US GDP could be between US$402 billion and US$760 billion annually by 2035 (equivalent to between 1.3% and 2.4%). This suggests that the metaverse may lead to a significant increase in the value of goods and services being produced in the US. Given the emerging state of the technology, the timing and size of the economic benefits are dependent on an enabling environment for its growth and adoption.”

The key source of growth is innovation, or as it is put in this report:

“The contribution of the metaverse to US economic growth is expected to be driven by businesses harnessing new revenue streams, augmenting existing business models, as well as bringing operational efficiencies.”

Economic Contribution Worldwide

In terms of the potential worldwide impact, the global report in the series offered the following:

“Our model implies that if metaverse adoption began today, it would have a contribution to global GDP of $3.01 trillion (measured in 2015 U.S. dollars) in 2031. This estimate lies within the range of existing industry projections, which include estimates ranging from $800 billion to $2 trillion over the next few years, which tend to focus on near-term impacts on gaming, social media, ecommerce, and live entertainment, for example, to long-term estimates ranging from approximately $3 trillion to over $80 trillion.”

The following graphic from this report highlights assorted studies estimating the potential value of the metaverse.

As noted in the study: “In spite of the differences, all the estimates that have been made suggest that the global economic potential of the metaverse is significant.”

Positive Impact for Entrepreneurs and Small Businesses

This is an exciting moment for entrepreneurs, businesses, workers and consumers. The possibilities and opportunities appear expansive and significant, and shouldn’t be ignored.

As always, there will be experimenting, failures and successes. Among the assorted foundational matters that must be kept in mind, first and foremost is that freedom is vital – that is, the freedom to invent, to innovate, to experiment, to test, to invest, to improve, to fail, to build, to invest and expand domestically and globally, and to succeed.

That means that government needs to be limited. That is, government should not go down a path of taxing, excessive regulating, dictating, and even “guiding,” but instead, should do the basics of protecting private property rights; encouraging investment and innovation; working against fraud and abuse; enforcing contracts; and prosecuting wrongdoing.

Free enterprise promotes growth, transforms and creates industries, and raises living standards. That has been the case since the industrial revolution, and will be the case into the future, including in the metaverse.

For more about the metaverse, educational content and future events visit The Metaverse Business Alliance, a project of the Small Business & Entrepreneurship Council.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His latest book is The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist.

 

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