Future of internet virtually in sight

Shanghai incorporates novel ideas like metaverse in its five-year plan to further advance electronic information sector

The metaverse has become a buzzword in just a few months' time as businesses, investors and developers depict it as heralding the future of the internet.

The nebulous concept gained further public traction after Facebook rebranded itself as Meta in October, extending such discussions beyond gaming and entertainment.

The metaverse has been described as a world of endless, interconnected virtual communities where people can meet, work and play, using such technology as virtual reality headsets and augmented reality glasses.

Today, China's coastal city Shanghai has incorporated the concept into its development plan, hoping to gain an early advantage in the race for the next generation of technology.

On Dec 30, the Shanghai Municipal Commission of Economy and Informatization, which charts the course for the city's technology footprint, mentioned "metaverse" in its five-year plan guiding the development of the electronic information sector to 2025.

Positioning the metaverse as one of the four frontiers for exploration, the commission is aiming to integrate it with public services, entertainment and industrial manufacturing.

The commission said it plans to incentivize further use and study of the research and development of underlying technologies, including sensors, real-time human-computer interaction and blockchain. Blockchain is a database shared in a computer network that stores information in a secure way in digital blocks.

In its 14th Five-Year Plan (2021-25), China has identified seven "frontier" technologies that it should focus on to achieve self-reliance in science and technology. Shanghai's recent statement represented the first mention in a guideline of metaverse, which more local governments are likely to use, according to experts.

While the document did not provide a specific timeline or elaborate on the goals it is looking to achieve regarding the metaverse, Shanghai is clearly a pioneer, said Ding Daoshi, a senior internet expert and former chief of internet consultancy Sootoo.

"Since last year, Shanghai has been at the forefront in the industrial layout of the metaverse, from policy guidance to private capital, from core technology breakthroughs to innovative service applications," he said.

Policy directives are necessary, Ding said, since a metaverse requires a whole suite of technologies. They include the internet of things－a network of devices that enables them to communicate－blockchain, big data, artificial intelligence and virtual reality/augmented reality technologies. As a result, no company can afford to construct a metaverse on its own, Ding said.

Shanghai's strength

The inclusion of the metaverse in Shanghai's development strategy follows the city's long-term vision to build itself into a "globally influential digital hub" by 2035, with major information technology upgrades for a range of industries.

What's more, a list of incentives has been introduced as part of the city's near-term five-year digitalization plan. By 2025, the intention is to establish a digitally advanced ecosystem featuring artificial intelligence, telecom network infrastructure, data usage and transaction policies, professional exchange and improved business environment.

The digital targets include building faster 5G and broadband networks, constructing intelligent factories and digitized hospitals, developing AI and data-driven services and boosting applications for the aged and people with disabilities.

"The digital city upgrade is a national strategy to strengthen China's abilities in manufacturing and broadband. It also offers tools to us to better serve people and their daily lives," said Wu Jincheng, director of the Shanghai commission.

It includes digital transformation covering at least 80 percent of large local manufacturers, over 100 benchmark digital tools to improve people's lives, the ability to file online over 80 percent of all governance-related applications and construction of 100 million IoT sensors and devices, according to the latest government blueprint.

"It's no surprise that Shanghai is quickly embracing the metaverse idea, since the city has always been a bellwether for all types of reforms in China, and the Pudong New Area has been designated as a pioneer in China's new reform drive," said Lin Le, founder and CEO of Shanghai Lingshu Technology Co Ltd, a blockchain company.

Shanghai also boasts advantages like a comprehensive industrial layout and robust synergies between consumption, industries and technologies across the Yangtze River Delta region, Lin said.

Shanghai's strong financial market also fuels innovation and digital development, which is a boost for the city in achieving its global digital hub goal.

In 2021, Shanghai firms raised 150.7 billion yuan ($23.7 billion) through IPOs via the STAR Market, 30 percent of all money raised through the Shanghai bourse. That percentage makes Shanghai the top destination of firms in terms of money raised.

Industry opportunities

Experts perceived the metaverse as one phase of the inevitable evolution of internet technologies and a new way for people to interact with content online.

Lingshu's Lin said the concept is linked to the dawning era of Web 3.0.

The current Web 2.0 features the shift from desktop to mobile and from local to cloud storage. During the current phase, the internet has largely been bolstered by three key pillars: IoT, blockchain and artificial intelligence.

"IoT facilitates information collection, blockchain handles the trust issue, and AI turns abstract ideas into tangible applications," he said.

While many companies have benefited greatly from the Web 2.0 era, which features the use of those technologies to provide a range of services, "in a Web 3.0 world, we can expect more control by data users, increasingly decentralized systems "and a variety of payment mechanisms, Lin added.

Rather than interactions with two-dimensional applications on a phone, websites will be transformed into three-dimensional objects, said Xu Zhengchuan, an associate professor specializing in information management at Fudan University's School of Management.

"In the Web 2.0 era, users create content, while companies control and monetize it. But Web 3.0 users manage to create, control and then monetize the content all by themselves," he said.

"With stronger computing power and faster speeds, information exchange, trading and consumption are likely to converge in the virtual world that we call the metaverse," Xu said.

The metaverse will require－and ultimately boost－a number of technologies. Among them is blockchain, which provides the foundation of trust in the economic system of the metaverse.

Lin said blockchain, with its digital ledger containing a growing list of records, functions with each block on the chain having a cryptographic hash－a function that converts one value to another－which describes the previous block on the chain.

"So virtually it is unalterable and impenetrable to fraud, since there is always an end-to-end record for transparency," he said.

Because the metaverse is real-time, decentralized and has parts that can work together without being specifically instructed to do so, Lin said it is easy to imagine how blockchain fits into the vision for metaverse. "It provides reliable, traceable data and all actions can be implemented in a trustworthy way."

Lin is expecting the myriad applications of blockchain in the metaverse to be distilled in the following areas: smart governance, consumer-facing sectors from videos to gaming, industrial internet and digital finance.

"This is because blockchain may become a way we verify the legitimacy of almost any virtual asset, including e-currencies, identities and the authenticity and ownership of virtual property," he said.

Xie Hao, founder and CEO of Yuanyi Changxiang, said some lightweight metaverse solutions have surfaced. He cited the example of a tool for facilitating intelligent sales, designed for BMW China, in which users can easily immerse themselves in a virtual store through a customized mobile app.

The metaverse will also be the place where the concept of IoT digital twins will come together－meaning a virtual version of an actual IoT system can be used, for example, to test the system before it is built in reality.

Performing tests and modeling "what if" scenarios on a digital model turns out to be a lot less costly and labor-intensive than testing physical objects, said Chen Li, founder and CEO of Zhongmo Information Technology.

"In the future, whether it's constructing a new factory or a new subway project, we can have them simulated in the metaverse world before putting them into production, hence greatly improving efficiency," he said.

Such a practice can significantly lower a carbon footprint while including AI in the final decision-making.

People are also upbeat about the future of smart city initiatives, with the metaverse likely to allow civil servants to handle administrative services in areas like the economy, culture, tourism, education and civil complaints in a virtual setting.

"China has over 100 'smart cities' nowadays, putting us in an advantageous position compared with peer cities in the United States or in Europe," said Chen. "With the metaverse in sight, we are likely to see digital twins not only in the industrial sector but in a wider range of social aspects."