According to a study released on Monday, the development of the metaverse, this virtual universe that some have compared to the Internet of tomorrow, will add $3,000 billion to global GDP over ten years. But there are some dubious assumptions in this Facebook-funded work.
A virtual world that can bring down billions on the real economy. Three trillion in ten years, to be exact. According to a study published on Monday, May 16 by the American economic group Analysis Group, the metaverse, the now well-known concept of the virtual universe promoted by Meta (ex-Facebook), is capable of increasing global GDP by 2.8% in ten years. consulting firm, and funded by… Meta.
These economists have calculated that the metaverse, “if adopted today,” will contribute $1 trillion to Asian GDP growth by 2031, add $440 billion to European GDP, or even more than $500 billion to United States GDP over the same period. The region least affected by the metaverse will be Sub-Saharan Africa, with only $40 billion in economic damage.
A consumer paradise without a consumer?
“This study has at least the merit of existence because, as a general rule, this type of data – no matter how dubious it may be – is often missing when a new technology comes along. This allows at least to lay the groundwork for discussion,” said Pascal de Lima, chief economist at Harwell Management, an economics consulting firm.
This is all the more true of the metaverse, a loosely defined concept that has spawned many fantasies since Facebook founder Mark Zuckerberg made it the cornerstone of his digital empire’s future in October 2021. “the successor to the Internet,” according to the authors of the Analysis Group report, means everything and nothing.
More prosaically, the metaverse includes a technological aspect—the development of tools such as virtual reality headsets—that allow you to project yourself into a permanent online world where everything real can become virtual. It is assumed that users, embodying an avatar, can communicate, work, travel, play, build, or even buy in the metaverse.
Enough to whet the appetite of traders of all stripes. Many of them have already set foot in this metaverse, although Mark Zuckerberg himself says that it will be years before we actually see it take shape. So Zara launched a “figital” collection (abbreviation of physical and digital) of clothes that exists both in store and for avatars, while Decentralant, one of the main metaverse projects (Facebook is not the only one trying to create this universe) , organized a “Metaverse Fashion Week” featuring brands such as Dolce & Gabbana or Tommy Hilfiger. There are even developers selling parts of the metaverse.
Thus, we were in a “risk situation” for these traders, as the Spanish economist Manuel Hidalgo said in an interview with the Spanish daily newspaper El Pais. “Before, someone created a technology, like an internal combustion engine, and when it became viable, products like a car were born. With the metaverse, the situation is reversed: the idea is promoted, and when traders invest in it, it develops, ”he summarizes.
Thus, the metaverse becomes a consumer’s paradise without consumers. This is where the Analysis Group study comes in: it should reassure these investors by giving an academic edge to the idea that the metaverse will have a huge economic impact.
A bold parallel with mobile internet
And “the authors have created a very serious copy that strives to be strict,” admits Pascal de Lima. Their demonstration really seems very tempting. They extrapolate the future economic impact of the metaverse to the impact of the mobile internet.
“The way a smartphone combines technology—a device, Internet access, or even photography—for a new way for people to communicate echoes the promise of the metaverse,” the study authors write.
They then assessed the economic contribution of mobile Internet in each country by comparing the penetration rate of this technology with GDP growth between 2007 and 2019. “Our results show that a 10 percent increase in mobile Internet adoption in a country was associated with a 0.087% GDP growth,” the study says.
It then suffices to apply the same method to the metaverse to conclude that “the potential impact represents a contribution to world GDP of 2.8%”. Simple, effective and something to please the Meta, who financed this work?
“However, there is a problem of intellectual honesty at several levels,” Pascal Lima sums up. Starting with the calculation of the economic effect of the mobile Internet. “The authors note a statistical correlation between GDP growth and smartphone adoption, but this does not mean that there is necessarily a causal relationship,” notes this economist, author of Capitalism and Technology: A Dangerous Relationship.
Then the comparison with the mobile Internet has its limits. No one knows yet what the metaverse will be, and “comparing this to the mobile Internet allows us to simplify this phenomenon, putting it on the same level as a technology that we know well and that globally has had a rather positive impact,” emphasizes Pascal de Lima.
Research that above all is reassuring
For him, the main goal of the authors of the study with this comparison is to “reassure the public” regarding a technology that is still difficult to identify. The almost subliminal message of this paper will be to say, “You survived the mobile revolution, you will survive the metaverse revolution very well.”
“This allows us to leave aside any discussion of possible undesirable economic consequences and social risks specific to the metaverse,” explains Pascal de Lima. For him, the main danger of the triumphant metaverse will be in the world of work. Professions that involve mobility or direct human relationships, such as sales representatives, doctors, salespeople, teachers, or even couriers, will require “much greater training commitments than after the advent of mobile internet,” says the economist.
The risk then will be to leave aside all those who have not been able to adapt to this new reality…virtual. The economic costs of this “potentially much greater technological unemployment than with the mobile Internet” are not accounted for in the study at all.
The Analysis Group’s logical conclusion is also that Mark Zuckerberg’s luck brings happiness to the global economy. “This is a macroeconomic approach, which means that the metaverse will explode global GDP because Gafam and large groups will get rich building it and selling their products in it,” sums up an economist at Honeywell Management.
This is a classic application of the theory of trickle down, which assumes that anything that makes the rich richer will eventually benefit everyone through additional tax revenue and money that will be reinvested in the economy. Except that “nowhere is it explained to us how the wealth concentrated in the hands of Mark Zuckerberg and others will benefit everyone,” notes Pascal de Lima.
This does not mean that it is impossible, but it still needs to be shown how developing countries, for example, will benefit from this – where the high-speed Internet necessary for the proper functioning of the metaverse does not yet exist.