An attendant with a Meta Oculus Quest 2 headset during a virtual reality tour during the Mobile World Congress in Barcelona in March 2022. South Korea is betting on Metaverse as the next big thing, but there are questions about the form available in the industry. in the coming years.
Joan Cros | Nurphoto | Getty Photos
What shape the metaverse will take is not yet known, but South Korea is betting on the new industry as the next big thing.
As part of its Digital New Deal, a program to invest in new technologies in the country’s economy, the Ministry of Information and Communication Science and Technology plans to revive South Korea’s metaverse industry by supporting businesses and create jobs.
Science and ICT Minister Lim Hyesook called the metaverse an “unexplored digital continent with undefined potential,” with the government allocating 223.7 billion won ($ 177.1 million) for the venture.
At the city level, the Seoul Metropolitan Government has built a 3.9 billion won metaverse platform so that citizens can access public services.
The metaverse, which was all the rage last year, focused on technologies like virtual reality and the idea that people could play and live in virtual worlds. It’s been called the next frontier of tech services, especially since Facebook rebranded itself as Meta and promised to build a future focused on the metaverse.
All of this fits the concept of Web3, a broad church that includes metaverse, virtual reality, augmented reality, and blockchain technology, as well as digital assets such as cryptocurrency and non-fungible tokens (NFTs).
Who will be first?
The South Korean investment of approximately $ 177.1 million was one of the first new industry investments made by a national government and a cautious first step in the metaverse.
It marks the interest in a technology that will be at the center of the stage in the coming years – and it could provide a model for others to follow.
“It’s interesting, it’s usually a private sector and big initiative driven by technology and fashion. Governments have done nothing better than South Korea,” said Yugal Joshi, a fellow at research firm Everest Group. , told CNBC.
Other Asian government agencies are also watching. Shanghai authorities have urged the construction of utilities with the metaverse in mind, as previously reported by CNBC.
“A few things are happening, but I think that tells you that governments are starting to take this more seriously because it’s a platform where people come together. Anything that unites people is interesting. governments. ”
Joshi said that in China, tech giants like Tencent and Alibaba have shown a keen eye for metaverse product development, the latter having recently invested in an AR glasses startup. .
He added that metaverse activity in Asia, like the rest of the world, is still in its infancy as companies invest time and money to find the first big winning app.
Despite growing interest and plans in South Korea, no country has come out with a clear first-mover advantage, he said.
“How governments will use it has yet to be determined because the entire ecosystem has yet to be decided. It is still under construction.”
How metaverse technologies will interact with existing regulations is one of the many questions that governments and policymakers will need to address in the coming years.
For example, NFTs, a core component of many metaverse developments, remain a legal gray area in South Korea and are not subject to the same rules as cryptocurrencies.
A spokesman for the Ministry of Science and ICT declined to comment beyond his public statements.
However, so far, the adoption of NFTs or crypto in the country has not been banned, and big names have jumped on the bandwagon.
Record-breaking K-pop group BTS announced an NFT project late last year. Despite some backlash from fans over environmental concerns – NFTs and cryptocurrencies require a lot of computing power – the project continues.
Meanwhile, LG Electronics, the Korean tech giant, launched its blockchain and cryptocurrency division earlier this year.
New frontiers, new risks
Javier Floren, CEO of startup NFT DNAverse, said countries experimenting with these new technologies will understand them better in the future.
However, this experiment has many risks. Cryptocurrencies, another important component of Web3 and metaverse developments, are notoriously volatile, as seen during the May price crash.
For a country like El Salvador, which makes bitcoin legal, leading new technologies also means being vulnerable to such risks.
“It will depend on how different countries approach the legal side,” Floren said.
“With any disruptive new technology or ecosystem and new areas to interact, there are problems, challenges and certain risks.”
Governments need to “change their thinking a little bit”, he said, to understand the opportunities and risks, such as user privacy or the threat of scams. .
“Initially, there was no legal support or coverage from official institutions, so governments had to understand how Web3 evolves because the [existing] The protocols do not work on Web3, ”Floren added.
Think before you act?
Meta envisions a metaverse where people interact with the digital world through avatars. But a new digital experience also brings with it old problems. Issues of privacy, security, safety and illegal activities can be challenges for these platforms and the authorities that manage them.
These are the many issues that South Korea and other governments will have to address as they venture into the metaverse, whether it is using technology to improve citizen engagement or deciding the role they will play as regulators in an expanding technology.
As a result, South Korea plans to create a body that will unite various ministries to monitor issues such as data protection, illegal conduct and intellectual property protection.
But collaboration between different authorities may be necessary if the Metaverse is to be as ubiquitous as its proponents hoped.
The Institute of Engineering and Technology, a UK -based organization, released a report in April raising concerns about abusive or illegal content in the metaverse. Children are at risk, he said, citing a survey that found two-thirds of parents don’t understand how Metaverse works or what content their children access.
“No one thinks about it in a meaningful way, which is bad because it’s actually very important, but it also happens on social media,” Joshi said.
He added that there are many companies jumping on the metaverse ‘wonder bandwagon’ without looking at particular risks.
“I haven’t seen many places where vendors build these platforms or even companies that really think about these things.”