Seeing is believing: Why Germany is set to lead the European VR / AR revolution

by Ryan Hamilton Economist, Strategy&, PwC United Kingdom

Virtual reality (VR) and augmented reality (AR) are already transforming several sectors in many countries around the world - largely improving processes, enhancing job roles, creating efficiencies but also reimagining how we communicate and visualise information.

The US, China and Japan are the three markets which have taken these technologies under their wings the most. These three economies account for over 50% of the impact on GDP that is expected globally by 2030 from VR/AR. This confirms perceptions that these countries have more rapid adoption rates and are primed to benefit from these new technologies.

In Europe, there are also some very interesting trends. VR/AR applications in Healthcare are expected to have the biggest impact across the UK ($17.7bn), France ($13.1bn) and Finland ($2.0bn) by 2030. Whereas, Germany will reap the largest economic benefits from product and service development of $27.1bn by 2030.

One thing I find most intriguing are the ratios of total GDP impact versus the number of jobs enhanced. Germany ($103.6bn and 400,368 jobs enhanced) and France ($50.4bn and 202,500 jobs enhanced) have similar ratios of GDP impact versus the number of jobs enhanced by VR/AR. However, the UK seems to be an outlier in Europe. It is expected to see over $30bn less in GDP terms than Germany, yet see a similar level of jobs enhanced by 2030. So how can this be?

One explanation of this is the difference in the sectoral make-up of each economy. For example, the UK’s economy is one of the most service intensive globally, with around 80% of jobs based in service activities versus the likes of Germany at 70%. These differences are important, because one of the fundamental assumptions underpinning the analysis is that certain sectors will benefit more (or less) from VR/AR technologies than others.

In a European and Global context, we found that one of the biggest drivers of economic value across all economies is the category of product and service development. Manufacturing is the sector across the economy which is anticipated to be transformed most from these applications and in particular advanced manufacturing activities. In Europe specifically, Germany has a much greater concentration of employment in manufacturing (19%) than the UK (9%). In addition, Germany has a much stronger focus on higher value added manufacturing - helping explain why aggregate GDP impacts are much larger in Germany yet the number of jobs enhanced are more similar.

I think you will agree that the differing impacts of VR/AR technologies across economies is interesting. But, if we are to truly see these benefits, then there needs to be collective buy in from government, businesses and people. As with all new transformative technologies, the potential economic wealth they bring is hugely dependent on our ability as people to adapt and adopt these exciting technologies in our day to day lives.

Interested in learning more?

Our report includes five clear tips for getting started with VR and AR. The most important of which is simply getting stuck in and seeing for yourself how these technologies have evolved and what they can do for you, or your organisation.

Click here to download our ‘Seeing is believing’ report to;

  • explore the economic data for yourself
  • enjoy the AR experiences we’ve included using your mobile phone
  • read up on the insights and opinions of our technology and industry specialists


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by Ryan Hamilton Economist, Strategy&, PwC United Kingdom

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