"From Virtual Shipyards to VR Military Training" XR Economy Arrives... 30 Trillion Won Economic Impact Within 5 Years

Government Unveils 'Virtual Convergence Economy Development Strategy' Aiming for XR Economic Leadership

[Asia Economy Reporter Seulgina Jo] #1 In the so-called 'Virtual Shipyard' applying Extended Reality (XR) technology, large ships can be designed and quality tested through virtual reality (VR) and augmented reality (AR), which were previously only seen in games. Since design changes and verification can be easily done in virtual space, it is expected that the time and cost required at manufacturing sites will be greatly reduced.

#2 The military is introducing precision shooting training and tactical training based on VR. Trainees wear VR devices in front of a screen and receive training applying realistic recoil and ballistic trajectories for each type of bullet. For command and control training, it takes place among AR-implemented terrain features as if directly overlooking the operational area right before their eyes.

The virtual convergence economy is becoming full-fledged. With the acceleration of non-face-to-face (untact) transitions worldwide due to the novel coronavirus infection (COVID-19), XR, which connects the real and virtual worlds, is emerging as a new engine for economic growth. The government has set a goal to achieve an economic ripple effect of 30 trillion won by 2025 and to enter the global top 5 leading countries under the vision of 'Realizing an XR Economy Leading Nation.' The virtual convergence economy refers to an economy that creates new experiences and values by utilizing XR such as VR and AR.

On the morning of the 10th, the government finalized the 'Virtual Convergence Economy Development Strategy' at the National Policy Coordination Meeting chaired by Prime Minister Chung Sye-kyun at the Government Seoul Office. The core consists of three major promotion strategies and 12 implementation tasks: ▲ spreading XR utilization across the economy and society ▲ expanding leading XR infrastructure and system improvement ▲ supporting XR companies to secure global competitiveness. A total budget of 403 billion won will be invested jointly by related ministries throughout next year.

◆ Applying XR to Core Industries such as Manufacturing

First, the government will fully implement XR utilization from industrial sites to solving social problems. Especially, in six major industries with significant ripple effects on our economy?manufacturing, medical care, construction, education, distribution, and defense?'XR Flagship Projects' will be promoted to discover leading cases. Specifically, XR will be applied to all processes from design, operation, to management like in the Virtual Shipyard, and underground facilities will be checked in real-time with AR while conducting road and building construction. Traditional military training systems will also be transformed into ultra-realistic virtual training systems. Virtual human bodies containing medical information will be used to predict future health conditions or conduct simulations like actual surgeries.

Additionally, the government will operate 'XR@Region' and 'XR Device Centers' to support XR utilization linked to regional key industries and establish an 'XR Fund' worth 40 billion won in 2021. Inclusive services that solve problems faced by socially vulnerable groups such as the disabled in daily life through XR will also be developed and distributed. Large-scale virtual fire-fighting training and AR sign language services for the hearing impaired will also be promoted.

Related infrastructure and systems will also be improved. While actively developing core technologies related to devices such as AR glasses, pilot services that citizens can experience will be expanded. Essential data such as three-dimensional spatial information will be constructed and supported for private companies as well. This is part of building the so-called 'Data Dam.'

XR companies with global competitiveness will also be nurtured. Through nurturing programs that support the entire cycle from funding to demonstration and commercialization, the goal is to increase the number of XR specialized companies with sales exceeding 5 billion won to 150 by 2025. The utilization rate of XR by companies, which was only 0.3% last year, will be raised to 20% by 2025. Support will also be provided for discovering XR joint projects between domestic companies and local companies in 5G commercial countries, as well as global co-entry of XR companies and specialized companies by sector.

◆ Global Economic Ripple Effect of 520 Trillion Won

The government expects that XR will spread not only in the cultural sector but also to core industries such as manufacturing, medical care, and distribution, creating an economic ripple effect of more than 470 billion dollars (approximately 520 trillion won) worldwide by 2025. It is also judged that XR will play a major role in the 'Korean New Deal,' which is being promoted as a post-COVID-19 measure.

Song Kyung-hee, Software Policy Officer at the Ministry of Science and ICT, explained, "It will accelerate innovation in traditional business models and drive economic growth," adding, "We will expand XR utilization across the economy and society based on world-class digital infrastructure." KPMG estimates the added value of XR utilization in six major domestic industries to be about 26.3 trillion won by 2025.

Countries around the world are also accelerating their efforts to secure a leading position in the virtual convergence economy using XR. The United States is promoting VR and AR research in key areas such as defense, disaster, and medical care under national leadership. The U.S. Department of Defense plans to invest a total of 11 billion dollars by 2022 in developing related training systems. China also announced the 'VR Industry Acceleration Guidance Opinion,' designating VR convergence in key fields as a core task. The multinational management consulting firm Accenture previously stated, "The XR era is no longer an exaggeration, and we are already living in the XR era."

Minister Choi Ki-young of the Ministry of Science and ICT emphasized, "XR, based on Data (D), Network (N), and Artificial Intelligence (A), will spread across all economic and social fields such as manufacturing, medical care, education, and distribution, improving the quality of life of our people and innovating the productivity of national industries. As an important axis of the Digital New Deal, we will promote a digital transformation that innovates the entire economy with XR and realize a leading virtual convergence economy nation by 2025."

This content was produced with the assistance of AI translation services.