UK on track to be a world leader according to new report out today
The immersive economy, which includes technologies such as virtual and augmented reality, has grown 83% over the past five years, with Brighton being the city with the most immersive companies (115) outside of London and Manchester.
There are an estimated 2,106 immersive companies in the UK with an industry turnover of £1.4bn, positioning the UK as a world renowned, unrivalled centre of excellence in immersive technology. Applications of these technologies in the creative industry include virtual production in the film and television sector, location-based immersive experiences in the arts and heritage sectors, and multiplayer, multiplatform XR gaming. They also extend well beyond the creative industries, with use cases in manufacturing and engineering, remote training, and healthcare, where the technology could be used for pain management, rehabilitation, and to treat mental health conditions.
The 2022 Immersive Economy Report, by Immerse UK at Innovate UK KTN and the Audience of the Future Challenge Fund at UKRI, examines trends in the industry following COVID-19. It shows that the pandemic accelerated growth in the immersive economy by increasing demand for online, virtual experiences. It also caused a cultural shift in how people and businesses expect services to be delivered, and enabled international working and collaboration.
The report also suggests growth was driven by the global metaverse trend, increasing private investment in UK immersive companies. It is widely accepted that immersive technologies will play a crucial role in the development of the metaverse. In fact, private investment in this area reached a new yearly high of £224m in 2021 and looks set to rise further in 2022, with investments in the first half of the year totalling nearly 90% of that raised in 2021.
The highest turnover and biggest number of immersive technology companies are in media and entertainment, worth £164m. This is followed by education and training businesses which experienced 80% growth and a turnover of £156m.
Healthcare has the highest growth rate in the number of immersive technology businesses over the past five years (88% increase), reflecting the government’s 2021 Autumn Budget commitment to invest in the use of digital technology in healthcare.
The economic success from the sector is being felt across many parts of the UK. Although London is still dominant, the fastest growing areas are Wales (124%) and Scotland (95%). Apart from London, the cities with the most immersive companies are Manchester (118), Brighton (115) and Bristol (99).
Another significant factor in the growth of the nation’s immersive economy, according to The 2022 Immersive Economy Report, is the UK’s highly skilled and adaptable workforce combined with the research outputs of the nation’s world-leading universities.
However, the report warns that access to talent is a potential major barrier to growth. For example, real-time 3D skills are considered one of the most important skills for immersive technology which are in short supply. Demand for these skills is higher in the UK than abroad. Equally, a skills shortage in the education sector threatens the ability to bring on the next generation of immersive talent, hindering future growth.
Asha Easton, Immerse UK, explains “Immersive technology is a massive future industry and as our report shows, the UK has a real opportunity to be a global leader in it. This has huge ramifications for UK plc, indeed it’s already creating jobs and prosperity right across the UK. But this can only be achieved by addressing the growing skills shortage issue from grassroots upwards. We cannot wait. We must inspire the next generation of immersive specialists and attract talent to the industry if we’re to safeguard our position and see this industry realise its full potential.”