Technische Universität München

Radical changes through virtual reality

TECHNICAL UNIVERSITY OF MUNICH

Corporate Communications Center

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NEWS RELEASE

Radical changes through virtual reality

Study sees seven industries facing disruption

Virtual and augmented reality will have potential applications in countless business sectors as the technologies mature. A study by economists at the Technical University of Munich (TUM) shows that drastic disruption lies ahead for seven different sectors, impacting existing products, business models and production processes. These sectors include manufacturing, retail and the real estate sector.

When new technologies are integrated into a wide range of applications, as opposed to merely generating single products, they can revolutionize entire industries. Virtual and augmented reality have that potential. Virtual reality technology (VR) creates a virtual environment with which people can interact using mobile devices, especially VR glasses. Augmented reality technology (AR) presents users with virtual objects in their natural surroundings. For example, VR glasses might display information about an object in a person's field of vision.

What charges are in store for companies not involved in developing these technologies? In a first step, Prof. Thomas Hutzschenreuter and his team at the Chair of Strategic and International Management at TUM evaluated existing VR and AR research, interviewed experts and analyzed start-ups. On this basis they estimated the time frame and the branches for the rise of these technologies.

Disruption from 2020 on

The researchers' prediction: In seven of 41 industries studied, these technological developments will lead to radical changes between 2020 and 2040:

- In manufacturing, VR and AR will enable companies to reduce costs and increase
  productivity. Virtual models will transform the product development process. 
  In the production process, workers will see instructions, hints and other 
  information displayed in their field of vision. Teams distributed across 
  multiple locations will work together in virtual environments.  
- Another place where the new technologies will make working life easier will be
  automotive workshops, where tasks have become increasingly complex with the 
  growing differentiation and sophistication of modern cars. Augmented manuals 
  will display step-by-step instructions for a wide range of repairs for the 
  vehicle currently in the service bay. 
- In retail, a massive transformation will be seen in segments where online 
  sales now still play a very minor role. One example is the furniture business:
  With augmented reality, customers will create visualizations of furniture 
  without leaving home and then place their order online. Meanwhile, segments 
  that are already doing business online will be able to reduce costs. One 
  example is fashion, where fewer products will be returned when buyers can "try
  on" garments using avatars.  
- The communications and IT services industry will transform social VR services 
  into a mass medium. Companies will offer a wealth of virtual worlds where 
  users can meet and interact face to face. With options ranging from cafés to 
  games, and from holidays to dating services, this will bring disruption to 
  many sectors. 
- The music industry will undergo massive changes when VR technology enables 
  fans to experience concerts anywhere and anytime. Marketers will be able to 
  offer fans the virtual experience of sitting at any desired location in the 
  audience, or even on stage, with excellent sound quality. At the same time, 
  demand for concert tickets - now an important revenue driver following the 
  decline in CD sales - will fall off.  
- The real estate industry will see changes in the way buildings are marketed. 
  Companies offering virtual tours through buildings - whether they are still on
  the drawing board or existing - will have a competitive edge. The expensive 
  and time-consuming process of constructing prototypes will be a thing of the 
  past. VR applications will also become the default approach to planning the 
  interior design. 
- For the educational sector, the researchers predict an increase in market 
  share for universities offering online degree courses. Virtual reality 
  classrooms will make studying at home more attractive and effective by 
  facilitating better interactions between students and teachers while opening 
  doors for new learning methods and more user-friendly course materials.  

"Companies need to find strategic partners"

"Virtual and augmented reality are disruptive technologies: They will relentlessly and rapidly eliminate existing products, business models and production processes," says Thomas Hutzschenreuter. "This process will be moving full speed ahead in just a few years. To remain competitive, companies in the industries we have identified will have to develop new strategies. Most of them will need to find partners because they lack the necessary expertise in virtual and augmented reality. Those that succeed will have excellent chances of achieving growth by boosting productivity while lowering their costs."

Publication:

Hutzschenreuter, Thomas; Burger-Ringer, Christian: Impact of Virtual, Mixed, and Augmented Reality on Industries, 2018; DOI: 10.14459/2018md1454069

https://mediatum.ub.tum.de/node?id=1454069

Contact:

Prof. Dr. Thomas Hutzschenreuter

Technical University of Munich

Chair of Strategic and International Management

Tel.: +49 89 289 28131

th.sim@tum.de

http://www.simanagement.wi.tum.de

The Technical University of Munich (TUM) is one of Europe's leading research
universities, with around 550 professors, 42,000 students, and 10,000 academic
and non-academic staff. Its focus areas are the engineering sciences, natural
sciences, life sciences and medicine, combined with economic and social
sciences. TUM acts as an entrepreneurial university that promotes talents and
creates value for society. In that it profits from having strong partners in
science and industry. It is represented worldwide with the TUM Asia campus in
Singapore as well as offices in Beijing, Brussels, Cairo, Mumbai, San Francisco,
and São Paulo. Nobel Prize winners and inventors such as Rudolf Diesel, Carl von
Linde, and Rudolf Mößbauer have done research at TUM. In 2006 and 2012 it won
recognition as a German "Excellence University." In international rankings, TUM
regularly places among the best universities in Germany. 



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