An Augmented World: Detangling the Technologies of the Future

How to escape the hype and drive holistic value in a world being reshaped by the Metaverse, Robotics, IoT, Web3, and GenAI

Authored by: Urs Rahne, Tibor Merey, Katharina Skalnik, Katie Round, and Filip Sokolowski

We are standing at the brink of a new era of technology. At the same time, multiple seemingly independent technologies — be it the metaverse, robotics, Internet of Things (IoT), Web3, or the latest kid on the block, Generative AI (GenAI) — are reaching breakthrough after breakthrough.

We believe these technologies are not independent, but rather jointly form the fabric of an “augmented world” — a landscape of complementary innovations that can amplify each other. Success in this augmented world requires a holistic approach in which businesses integrate and leverage these technologies to support their strategic goals. But to achieve this, organizations must first develop a deep understanding of these technologies individually, as well as how they interact with each other, to drive value.

Join us on a journey into this augmented world, as we explore how these frontier technologies contribute to enhancing the human experience as well as business outcomes, and demonstrate how they can be orchestrated to drive value for your organization.

Understanding the Technologies of the Future

In the face of transformative innovations, we tend to study each technology in isolation. This approach treats new technologies as frontiers for exploration that exist on their own and demand discrete strategic and technological capabilities. Thus, their full potential often gets underestimated or overlooked. Technologies such as ChatGPT have significant standalone value, but their true potential lies in how these technologies interact with other gamechangers such as IoT and Web3.

We propose a different perspective: technologies of the future are best understood as bridges — powerful in their own right, but far more powerful in their ability to amplify value through their connections to and interfaces with other technologies, including the following:

• The metaverse (often referred to as Spatial Internet) creates a new space by extending the physical world to the digital world, enabling the creation of altered realities that open up new dimensions of immersive digital experiences by blending elements from our physical world into the digital space.
• IoT builds the bridge between this digital world and the real one by pulling data from the physical world to enrich virtual simulations (the most obvious example is headsets and controllers pulling data from the physical world to replicate a person as an avatar in the metaverse), while robotics forges a link from the virtual back to the physical world — enabling AI, for instance, to operate actuators in the physical space, such as with self-driving cars.
• Web3 forms the protocol layer of this augmented world, governing relationships, transactions, and rules. It fosters a decentralized and trust-based ecosystem, playing a pivotal role in “proving who you are” through secure and decentralized identity verification as well as “proving what you own” through transparent digital asset management, enabling transactions through currency and value assignment and establishing rules and protocols for interactions both in the physical and the digital world.
• GenAI acts as an accelerator across all of these elements (for example, by augmenting code/asset generation or creating synthetic data that allows efficient training of AI systems with little data). At the same time, the metaverse grants AI agents bodies (avatars) to interact with, while robotics grants them an embodiment in the physical world.

Collectively, these breakthrough technologies constitute an augmented world: a loose, non-hierarchical affiliation of interconnected technologies.

It’s important to remember that, while digital innovations are densely interconnected, the flow of value always ultimately leads back — directly or indirectly — to the physical world. Most all digital breakthroughs depend on applications and use cases that ultimately act on or optimize the physical world. In the augmented world, the physical world is its capital, the center of gravity around which other innovations are organized and from which they derive meaning and value.

Let’s explore this idea further by taking a closer look at the way these technologies operate — and how value flows through the connections between them.

1. The Metaverse and the Spatial Internet

Etymologically, the metaverse promises a universe beyond the physical — a blurring of the boundaries between the “real” world and the digital, allowing people to interact with one another, with places, and with objects in powerful new ways.

Because of this, the power of the metaverse lies less in producing entirely new 3D spaces than in extending the physical world into virtual spaces. That might mean modeling the real world in detail, empowering real people to interact in intentionally unrealistic settings, or, through augmented reality, projecting digital information outward into physical environments.

Many use cases center around replicating complex or high-risk environments (such as a nuclear power plant) or situations that would be costly to enact in the real world (such as skyscraper firefighting procedures). This creates obvious routes to value for metaverse applications, particularly in customer-facing or asset-intensive industries.

• Pfizer’s Virtual Drug Pipeline. During the COVID-19 pandemic, Pfizer designed a new drug production facility in the metaverse, using virtualization to optimize the facility before beginning real-world construction — a far faster and more cost-efficient option than reconfiguring heavy machinery layouts after a real-world ribbon cutting. Pfizer also uses virtual reality (VR) to train manufacturing employees, providing immersive training that has reduced onboarding time by 40% and driven a threefold increase in quality.

2. IoT & Robotics

Compared with more recent innovations, IoT and robotics might seem like old news. Certainly, they are already widely used, but while they have transformed manufacturing and industrial practices, significant untapped potential remains to be unlocked through combining them with other digital technologies.

Both technologies serve as critical linkages between physical and virtual spaces and are therefore vitally important in today’s world of interconnected digital technologies.

In essence, IoT funnels data from the physical world into the virtual one — from a headset’s sensors detecting your body’s movement to guide your online avatar to a tachometer feeding engine RPM data to a smart factory control system. Robotics closes the loop, allowing virtual entities — including AI systems — to reach out and effect change in the physical world.

• XPO’s Robot Helpers. Warehouse workers at logistics company XPO partner with a collaborative robot (or “cobot”) named “Chuck,” which guides employees to the correct shelves, validates commissioned articles, and transports those items to packing stations. Chuck lists steps individually to avoid confusion and uses IoT sensors to provide the spatial awareness needed to work safely alongside humans. The result: order accuracy is up by 40%, and occupational safety has also improved.

3. Web3

Web3 is pivotal in governing relationships, enabling transactions, and establishing rules within the augmented world. Leveraging blockchain technologies, Web3 provides a digital ecosystem that enables peer-to-peer interactions, low-cost transactions, verifiability of information, and proof of identity. This brings several benefits.

First, it provides both identity and asset ownership and eliminates the need for verification through centralized entities or databases, which are replaced with “trustless” ledgers.

Second, it promises to drive more transparent, equitable, and effective ways of working and conducting business by enabling a democratized and decentralized peer-to-peer business ecosystem. This ensures rock-solid asset traceability and auditability via blockchain tokenization, while at the same time enabling high-speed, low-cost transactions.

Third, Web3 supports self-sovereign identity (SSI) tools that put individuals and businesses in full control of their digital information, making organizations more independent and resilient.

Collectively, these methodologies enable value creation, storage, and exchange between real-world and virtual entities. They also serve as a kind of immune system for the physical-digital world, ensuring verification and the flagging or blocking of unwanted organisms.

• Klöckner’s CO2 Passport. German steel distributor Klöckner has partnered with BCG X to increase sustainability via a blockchain “CO2 passport” for distributed steel. Its Nexigen PCF Algorithm product logs the carbon dioxide emissions of sourced steel using an in-house certified algorithm, with results stored in the blockchain passport — immune to tampering — and made fully visible to each customer, along with other options from Klöckner’s portfolio that can be used to further reduce emissions.

4. Generative AI

The rapid rise of ChatGPT has put GenAI on the map and turned AI itself into a more vigorous and active force in the world. Unlike deep learning and machine learning, GenAI creates new content based on patterns and relationships extracted from vast pools of publicly available information and private data sets such as meeting notes and internal documentation.

GenAI allows humans and machines to interact in more natural ways, from consumer-facing chatbots to tools allowing software to be written in plain English instead of complex programming languages. Such applications not only unlock obvious productivity and efficiency gains, but also spur ideation and innovation.

However, ethical challenges remain, ranging from automation of human roles and algorithmic bias to copyright considerations and increased demand for energy and computational resources. Still, it’s easy to see GenAI being used to enable complex problem-solving and decision-making processes.

This will be felt in two key areas: streamlining data, and access technological acceleration. GenAI lowers the bar for access to digital resources. People can interact intuitively with “intelligent” virtual agents, seamlessly access data corpuses ranging from user manuals to the entire internet, and request services such as real-time notetaking during business meetings. At the same time, individuals and businesses can use GenAI to accelerate digital innovation, as it automates much of the laborious “work” of designing and iterating new products and solutions, enabling human innovators to focus on defining the problems that need solving — and refining, validating, or leveraging GenAI-generated solutions.

• Google’s Semiconductor Sprint. Google’s DeepMind leverages GenAI in the high-stakes race for semiconductor performance. With semiconductors approaching the physical limitations of transistor capacity, GenAI is being used to radically rethink the semiconductor’s design. In fact, GenAI can generate thousands of designs within a day, compared with one design every few weeks from a human engineer.

Bringing It All Together in an Augmented World

To illustrate the augmented world’s impact on today’s businesses, let’s consider a fictitious example: a wind farm whose operators are leveraging new technological breakthroughs to boost profitability, increase resilience to environmental and economic pressures, and unlock competitive advantage.

The physical world is our wind farm’s main stage — it’s where the turbines are constructed and maintained, where the wind blows, and where energy is generated and consumed. But it still requires digital technologies to realize its profit potential and give it a competitive edge in an increasingly crowded marketplace.

To achieve this, the wind farm’s operators begin by looking to the metaverse. First, they use virtual modeling — informed by real-world weather data, climate modeling, topographic data, and other resources — to determine where and how their turbines should be placed. By optimizing their design in a virtual space, the operators can explore complex factors, including natural wind dynamics and wakes generated by the turbines themselves, to ensure optimal output before a single turbine is physically erected.

Before breaking ground, construction teams and maintenance crews are trained in virtually duplicated spaces and practice complex tasks repeatedly in low-stakes virtual environments. This ensures safer working conditions, fewer operational delays, less waste, and lower total cost to construct and maintain the wind farm.

As physical development begins, the wind farm’s operators use blockchain-based Web3 tools to ensure transparency in material sourcing. (Later, similar tools will be used to give customers full visibility into where the energy they receive was generated.) The farm also uses Web3 methodologies to help finance construction, with blockchain-based crowdfunding used to grant investors fractional ownership of the project and to manage their associated returns.

Once the wind farm is operating, IoT sensors are used to collect essential operating data, such as vibrations in the turbines, that can be used to model performance and, using robotics and AI analytics, adjust turbine blades in real time to maximize energy output. The data is also fed into GenAI algorithms to develop optimal maintenance protocols — and when physical inspections are needed, climbing robots scale turbines, collect additional data, and conduct required tasks remotely with no risk to human crews.

Finally, operating data — including data from the wind farm’s IoT sensors and blockchain-verified energy output, along with information on new material breakthroughs — is fed back into GenAI tools to accelerate wind turbine R&D. With less trial and error and more rapid virtual iteration, the wind farm developers are able to take their learnings forward to ensure that their next project is even more successful.

Conclusion: Winning in the Augmented World

Today’s technologies may seem to compete with each other, but they also form a network of connected and mutually enhancing technologies within the broader augmented world. To succeed in this world, organizations must move beyond hype cycles by harnessing the specific strengths and opportunities inherent in new technologies while also leveraging their strengths to augment, accelerate, and support other technological breakthroughs, thus driving optimal business outcomes.

As you navigate the dynamic landscape of the augmented world, we encourage you to take the following future-back approach:

1. Envision how an augmented world might look for your operations.
2. Define use cases for both physical-digital and digital-digital interfaces.
3. Prioritize these use cases by their potential impact and feasibility.
4. Identify individual enablers across and within the prioritized use cases.
5. Take action now to achieve the envisioned future and realize value at scale.

Consider the example of the wind farm: It would have been possible to simply focus on optimizing the physical layer — say, building more turbines or taller towers with bigger blades. But by envisioning the power of the augmented world and executing on key use cases, the wind farm operator was able to dramatically increase the facility’s efficiency, resilience, and profitability.

The key realization for today’s leaders is that this augmented world isn’t a hypothetical scenario or pie-in-the-sky futurism. We already live in a world that’s being revolutionized by the power of this technology — and organizations need to accept that fact.

This means physical operators need to embrace digital technologies, of course. But it also means that digital innovators can’t afford to focus solely on their current domains of digital strength. Companies that are using GenAI effectively, for instance, should also be thinking deeply about how to amplify value by integrating with IoT, the metaverse, or Web3 technologies.

Companies that creatively and holistically leverage the augmented world’s potential will be positioned to thrive in the coming years. Those that do not risk stagnation in isolated digital realms while their competition gains market share through innovative and connected strategies.

By embracing these technologies and engaging in proactive, innovative strategies, companies will be positioned to not only thrive but lead in this era of augmented possibilities.