Stock and debt markets are in great shape and it’s easier than ever for companies to raise money for investments.This may be the ideal time for companies to prepare for how massive technological changes such as artificial intelligence (AI), robotics and additive manufacturing, as well as VR, may affect them.
Having used a VR headset for the last couple of months, we in Corporate Advisory at RBS are of the view this technology in particular will follow the internet and mobile phone revolutions as the next transforming force for businesses.
Although still too immature to drive much change until the next decade, it is coming and companies need to get ahead of the curve.
Cinema operators may be challenged earlier than most firms as Facebook makes it possible to experience the movie theatre experience, including friends sitting next to you virtually. The social media site bought start-up Oculus VR last year for USD2 billion.
Film firms may benefit from larger audiences but could lose market power if Facebook becomes as dominant for new movies as Netflix has become for on-demand entertainment.
The opportunities for retailers to increase volumes while saving working capital and lease costs are vast. VR combines the convenience of buying items online with the spontaneity of physical shopping. Imagine being able to peruse thousands of related food products in a virtual shopping aisle. You need only say “bread” and jump to that aisle, where you realise you want bagels as well.
In 20 years, desk-based businesses may see office space as a wasteful, indulgent luxury, and their staff may not need to buy expensive, cramped urban property just to be within commuting distance.
VR means people can interact easily with colleagues across their entire department around the world instead of only seeing those close by. Confidential meetings can be arranged at the tap of a virtual shoulder. Nothing can match the in-person interaction experience, but VR may come close while vastly exceeding in-person meetings for convenience.
Hospital efficiency may shoot up thanks to virtual consultations and robotic operations which should lower the cost of health insurance. Pharmaceutical companies may benefit from more prescriptions being written due to an increasing number of consultations.
Power and utilities
Fewer offices and less travel may drive down energy use and the oil price with obvious knock-on effects on power producers, energy consuming industries like manufacturing and oil producing economies. Even the definition of “utilities” may shift to include elements of telecommunication infrastructure.
Click here to see a more detailed version of this article, including how we think VR could affect the telecommunications, technology, manufacturing, travel, infrastructure, financial services, paper and pulp and building material industries.
The statements and opinions expressed in this article are solely the views of the author and do not necessarily represent the views of The Royal Bank of Scotland plc, The Royal Bank of Scotland N.V. and/or their affiliates (“RBS”).