Lokesh Rao
As the global economy continues to tank below expectations due to rising inflation, many countries are banking on emerging technologies such as Non-Fungible Tokens (NFTs), and metaverse to recover from the rampant falling economy.
Shanghai, the second-most populated city in China, is relying on Web3, metaverse, and NFTs as an integral part of its five-year economic recovery plan, and India has a lot to learn from this. The ‘Shanghai Plan’ comes following a two-month lockdown enforced by city authorities in compliance with the country’s zero-COVID-19 policy.
Notably, Shanghai’s GDP growth rate had already dropped by 13.7 percent in the second quarter of 2021, and the city is positive that blockchain can help.
The Shanghai Model
The municipality of Shanghai released a draft paper of its 14th Five-Year Plan for the ‘Development of Shanghai’s Digital Economy’ on July 13. Some of the options that are currently being explored by the city are the integration of metaverse into tourism. The city wants a digital art-themed event to promote related NFTs during the Shanghai International Artwork Trade Week.
Additionally, the plan suggests several actions, such as the creation of virtual enterprises, the use of virtual reality in education, and the incorporation of technology into tourism and entertainment, to name a few.
In short, Shanghai will explore fashion, retail, entertainment, travel, and all the uses of metaverse to create what will be the future of online commerce, which is also known as ‘Experiential Commerce’.
The draft paper suggests some programmes that the government vows to promote which include government-directed funds to create 10 ‘leading’ companies as chain-owner enterprises. These companies will compete in the international market. Around 100 smaller firms will master core metaverse technology. These companies will focus on accelerating research and deployment of the metaverse platform, emphasising virtual concerts, idols, sports, and other digital entertainment options.
A $52 billion metaverse cluster expansion in the city is one of the key objectives of the plan. Shanghai aims to allot a $1.4 billion fund to reach that goal.
Web3 is the driving factor of the metaverse. It is the third generation of the Internet free from the power of tech companies such as Amazon, Facebook, and Google. It is a decentralised space fuelled by the power of blockchain where no central authority controls the flow of information. To put it simply, Web3 is more about blockchain concepts such as decentralised applications, smart contracts, and digital identity.
The metaverse should not be confused with Web3. It refers to a virtual reality-based Internet world where users can interact with each other in a 3D space. The next generation of buyers will want richer and more immersive online purchase experiences. Given this, there is a huge potential in this space.
For Web3 to work it would require infrastructure such as access equipment, virtual reality headsets, augmented reality glasses, chips, cloud computing, 5G tech, decentralised finances (DeFi), and NFTs. Most importantly it would require people’s digital identity in the form of avatars.
Learning For India
With countries such as South Korea stepping on the Web3 space, as a part of the ‘Digital New Deal’, the country is planning to invest $177 million into projects related to the metaverse. West Asia is not behind as well. Dubai is taking proactive steps to prepare its government for the metaverse embracing Web3 and blockchain.
Digital economies are driven by people who are well-versed in future technologies such as AI, ML, VR, AR, and blockchain. An entrepreneur in this space wants a business-friendly ecosystem and environment to build, and succeed. People with knowledge and experience in these technologies will also want job opportunities in the space.
The Indian government needs to build a support framework that enables startup entrepreneurs to work freely in this space. This is possible by strengthening cutting-edge technological breakthroughs by providing a better environment for talent to stay and work in India.
Formulating a long-term plan is important to ensure that not only the businesses in the space build and thrive, but also bring revenue to the country. Ultimately, new tech zones need to be created and promoted to encourage new technology R&D.
It is high time for India which has both — resources and consumers — became a hub for Web3, and this is possible with the combined effort from the government and industry. This will help India from not just being the digital back-office of the world to becoming a metaverse product-centric country.
Lokesh Rao is Co-Founder & CEO, Trace Network Labs. Views are personal, and do not represent the stand of this publication.
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