Note: BPC has partnered with the XR Association to set up an XR Initiative to study the policy implications of immersive technology. On April 13th, the BPC initiative hosted a private convening with academics, industry representatives, civil society groups, and other stakeholders to better understand XR issues. The following blog highlights research leading up to the convening and the convening itself.
“XR” is a general term for immersive technologies, such as virtual reality (VR) and augmented reality (AR). Contrary to popular belief, these technologies can be used for much more than just gaming and entertainment purposes. People and businesses are already using XR for various other purposes, such as improving retail experiences, testing furniture virtually in a home, and designing digital prototypes for cars. The growth of the XR market over the past decade, and its potential going forward, gives policymakers reason to notice and think through its policy implications.
XR can currently be segmented into three main categories: AR, VR, and mixed reality (MR).
- AR superimposes digital information like an image or text onto real objects or environments. Current examples include the yellow yard marker on football broadcasts or face-altering filters on social media platforms.
- VR is an interactive experience that allows users to leave physical reality and wholly immerse themselves in a virtual space. For instance, NASA uses a VR training facility to train its astronauts for rescue scenarios on spacewalks or to handle objects in space through immersive simulations.
- MR combines these two experiences so that virtual and physical objects can interact directly, such as a doctor who gets to practice complicated surgeries in an operating room through a projected simulation.
These technologies are not always distinct from each other and fall on a spectrum from most virtual to least.
XR is a fast-growing market, with large tech companies putting significant resources into developing XR products. Kenneth Research estimates XR production will grow by 46.5% annually from 2020 to 2026 and calculates global demand for XR to reach $346 billion by 2026. Statista estimates that around 77 million XR headsets will be shipped to customers by 2024. According to Grand View Research, the VR market (a subset of the XR market) has grown from around $205 million in 2016, to almost $22 billion in 2021, and is forecasted to increase at an annual rate of 18% from 2021 to 2028. While these forecasts may prove overly optimistic, the market is already large enough for policymakers to start learning about the technology and the policy implications.
Today, XR technologies are becoming increasingly mainstream. XR tools have become more commonplace in a range of industries and government, from retailers letting customers try on eyeglasses with AR to the military training soldiers with MR, to schools using VR for educational experiences (such as virtual field trips). Advancements in XR hardware and software will continue to make these technologies more accessible while people discover additional innovative use cases.
XR technology brings potential benefits and challenges that policymakers may need to address. Benefits include finding new ways to educate students, design products, and convey information. Workforce training and R&D policy can help guide the development and application of these technologies to raise living standards and boost economic competitiveness. Challenges include finding ways to protect privacy and secure data, fostering inclusion and access, and addressing other critical issues, such as safety and bias.
In speaking with various industries, civil society, and other stakeholders, BPC identified several policy questions that are important to ask in the context of XR. These include:
- How do we protect user privacy, especially with regards to biometric data? How do we protect bystander privacy with AR glasses?
- Who owns the data collected by an XR headset, and what can they do with it? What should be done to ensure data security?
- How should content be moderated on XR platforms?
- How can research help us better understand any potential effects XR has on children’s brains and development?
- What issues should be considered when it comes to children’s use of XR and their health, safety, and privacy?
- How can we make XR products more accessible, inclusive, and equitable so we don’t intensify technological inequality and the digital divide?
- How do we prevent harmful bias that hurts the most vulnerable segments of the population?
- How can the federal government best adopt and utilize XR technologies?
- What are the barriers to XR adoption for various use cases (e.g., healthcare, education)?
- How can the workforce best leverage XR technologies?
- How can government R&D improve XR?
- How should the United States coordinate policies with other countries?
- How should intellectual property be protected?
Answering questions like these and shaping standards and norms early in the technologies’ adoption is essential since many of the initial decisions will be difficult to reverse later. Building XR products with inclusion, privacy, and security as top priorities will positively steer the technology adoption and have long-term ripple effects.
A major policy debate in XR will be around when more flexible tools, such as standards, frameworks, and best practices are sufficient versus when government regulation with more enforcement power behind it is necessary. These tools are not inherently competitors and can often complement each other. For instance, standards that are well-designed can be later codified into government regulation. Finding the right balance is critical.
Existing laws and regulations should be reviewed to see which are applicable and relevant for XR. Policymakers should use this review to identify both policy gaps and areas where existing law is adequate. For instance, copyright laws should be reviewed to see if they are suitable for protecting the intellectual property of creative works in the virtual world. Legal reviews can identify which statutes should be modernized for XR technologies.
Industry standards will play a significant role in addressing many of the challenges that arise with XR. These standards should be based on input from diverse stakeholders and should be regularly updated to address evolutions in the immersive technology market. Policymakers can review these standards and their implementation to help decide if, and when, additional regulation is necessary.
The XR market is an area of rapid growth and innovation. Contrary to stereotypes, XR is not just for gaming and entertainment; it is being deployed in a diverse range of fields, including healthcare, education, manufacturing, retail, and government. XR raises many important policy challenges, such as protecting privacy, managing data security, and promoting inclusion that will greatly affect large swaths of the population. Policymakers should pay attention to this emerging field, because many of the early decisions on guiding and regulating XR will have long-term effects that will be harder to reverse when XR technologies becomes more pervasive. Industry, civil society, and other stakeholders should work with policymakers to better understand the technologies and its effects on society, so they can design policy that will enhance the benefits, alleviates concerns, and builds public trust for XR.