More than $177 million dollars will be
invested to kickstart national jobs and companies in this field, according to
statements made by Lim Hyesook, minister of science and information and
communication technologies. South Korea is one of the first countries to put
funds into this field.
As part of its Digital New Deal, a program
for investing in new technologies in the country's economy, the Ministry of
Science and Information and Communication Technologies plans to kickstart the
metaverse industry in South Korea by supporting companies and creating jobs.
Minister of Science and ICT Lim Hyesook
called the metaverse "an uncharted digital continent with indefinite
potential," with the government earmarking 223.7 billion won ($177.1
million) for the endeavor.
On the city level, Seoul's metropolitan
government is building a 3.9 billion-won metaverse platform to allow citizens
to access public services virtually.
The metaverse, which has drawn hype in the
last year, refers to technologies like virtual reality and the idea that people
may be playing and living in virtual worlds. It has been touted as the next
frontier in technology services, especially since Facebook rebranded itself as
Meta and committed to developing a metaverse-focused future.
That all fits into the concept of Web3, a
broad church encompassing the metaverse, virtual reality, augmented reality and
blockchain technology, as well as digital assets like cryptocurrency and
non-fungible tokens (NFTs).
South Korea's investment of around $177.1
million is among the first investments in the nascent industry to be made by a
national government and is a cautious first step into the metaverse.
It signals an interest in a technology that
could take center stage in the coming years — and it could provide a blueprint
for others to follow.
"It's interesting, it's predominantly
a private sector and Big Tech-driven initiative and trend. Governments have not
done much beyond South Korea," Yugal Joshi, a partner at research firm
Everest Group, told CNBC.
Other government bodies in Asia are taking
notice, too. Shanghai's authorities have been encouraging public services to be
built with the metaverse in mind, as previously reported by CNBC.
"Some things are happening in bits and
pieces but I believe this does tell you that governments are starting to take
this more seriously because it's a platform where people come together.
Anything which makes people come together, it makes governments
interested."
Joshi said that in China, tech giants likeTencent and Alibaba have shown a keen eye for developing metaverse products,
with the latter recently investing in an AR glasses start-up.
He added that metaverse activity in Asia,
much like the rest of the world, is still in its infancy, as companies invest
time and money in finding the first major winning application.
Despite the growing interest and South
Korea's plans, no country has emerged with a clear first mover advantage, he
said.
"How governments will use it is still
undecided because the entire ecosystem is still undecided. It is still being
built."
How metaverse technologies will gel with
existing regulations is therefore among many questions that governments and
policymakers will have to grapple with in the coming years.
For example, NFTs, a critical component of
many metaverse developments, remain in a legal gray area in South Korea and are
not subject to the same rules as cryptocurrencies.
A spokesperson for the Ministry of Science
and ICT declined to comment beyond its public statements.
But, for now, the adoption of NFTs or
crypto in the country hasn't been curtailed, and big names are getting in on
the trend.
By 2023, Seoul hopes to create a metaverse "allowing citizens to conveniently meet with avatar officials to deal with civil complaints and consultations, which are currently handled only by visiting municipal offices." https://t.co/cl6KiqldPX
— William Gallo (@GalloVOA) November 3, 2021
BTS, the record-breaking K-pop group,
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 is moving ahead.
Meanwhile, LG Electronics, the Korean tech
giant, launched a blockchain and cryptocurrency division earlier this year.
In November last year, the South Korean
military had also reportedly announced that it would phase in metaverse
applications to soldier training programmes by the 2030s.