These cities want in on the metaverse

The jury is out on whether the much-hyped metaverse will really materialise, what form it will take and the advantages and risks it might bring.

But even at this early stage, some cities are looking at how they could benefit and their role in shaping the future.

While cities have plenty of challenges to focus on today, many believe they have a responsibility to also look ahead and learn from the past when it comes to emerging technology.

Research last year by ThoughtLab found that of 200 global cities surveyed, 44 said they are making investments to ensure that their cities are metaverse-ready.

Seoul is the first out of the gate with Metaverse Seoul, which it says can serve as a model for other cities. Local government leaders from Rotterdam and Tampere to Santa Monica and Dubai are among those also experimenting or creating metaverse plans.

Some cities are eyeing economic development opportunities, while others see potential for education, resident engagement and improving the accessibility of city services.

The majority, though, are at the stage where they’re keen to know more and ensure they’re in the room as the concept advances.

Harmen van Sprang, co-founder and CEO of the non-profit Sharing Cities Alliance, said that although the metaverse is in a nascent phase: “That’s also, I think, exactly the moment that we already should be talking about this.”

He said cities shouldn’t be put off if they are not experts in the metaverse – almost no one could claim to be at this stage. Instead, he suggests all stakeholders approach the emerging area as “explorers”.

City role

Elizabeth Haas, Senior Advisor and leader of the Metaverse Collaborative at New York University’s School of Professional Studies, said: “I am totally convinced that not only is the metaverse a change, but the city should play an absolutely essential role in that.”

She was speaking during a recent online roundtable held by Sharing Cities Alliance, the New York University School of Professional Studies and Cornell’s Jacobs Urban Tech Hub. She cited the importance of building community engagement and ensuring the metaverse fits with cities’ values in areas such as ethics and inclusion.

“We as cities play a different kind of role here than we’ve ever played in the past in change. It’s a challenge and a huge opportunity to get it right,” Haas said.

Some reports have recently suggested that enthusiasm and investment in the metaverse is already waning, even from Meta which in 2021 changed its name from Facebook to focus on the concept.

Haas said the analysis overestimates the importance of Meta and underestimates the long-term commitments of major firms “across sectors that see the value of the metaverse”.

She added that while R&D budgets will suffer in difficult macro environments, she doesn’t believe confidence in the importance of the metaverse itself has been weakened or that top companies have stopped experimenting.

“I am bullish – the ecosystem is already robust with gaming and social media,” she said, also noting research from McKinsey which found that corporations, venture capital and private equity firms invested more than US$120 billion in the metaverse in the first half of 2022, more than double the investment in all of 2021.

Tampere’s metaverse strategy

Tampere in Finland is “serious about being a metaverse city,” says Teppo Rantanen, Executive Director for the city.

He sees particular opportunities in areas such as mobility, healthcare, utilities and safety and security, as well as events.

Rantanen says the metaverse concept incorporates many areas Tampere is already working on, such as virtual reality, digital twins, drones, data and artificial intelligence.

“We think it’s something where we will be able to combine virtual reality and the ‘real reality’ in a way that helps our citizens to live their lives better and find that everything works better in a city,” he told Cities Today.

“There are a number of things happening right now and we think that rather than looking at some isolated tests, we should be looking at the holistic view. We are on a journey.”

The city is currently in the research phase of understanding more about the metaverse and what it means for cities, businesses and residents. This includes holding workshops and discussions with organisations such as the Metaverse Institute in the UK, cities in Japan and the Nordics, universities, and companies like Microsoft, Nokia and Bosch.

Rantanen says that some cities who talk about the metaverse are focused on digital twins or other elements, but Tampere hopes to take a more comprehensive approach like Seoul.

With a population of around 244,000 compared to Seoul’s almost 10 million, it could be easier for Tampere to demonstrate what the metaverse means for a whole city, according to Rantanen.

He believes that concepts within the metaverse could help alleviate some of the pressures facing Finland’s healthcare system, including a budget deficit, ageing population and staff shortages. He also sees potential for better resident engagement, particularly with young people.

Tampere plans to outline a metaverse strategy in the summer.

Economic development

With companies such as Disney, Unity and Electronic Arts on its doorstep, the City of Orlando in Florida is pitching itself as the physical centre for metaverse development, led by the Orlando Economic Partnership.

Mayor Buddy Dyer supports the initiative and even gave his December State of Downtown address ‘in the metaverse’ via EngageXR’s platform.

Dyer told Cities Today: “We have been successful in economic development by creating industry clusters,” citing examples such as theme parks, modelling, simulation and training companies, and the biomedical industry.

He sees the city’s Creative Village – a cluster for emerging media based on 68 acres of city-owned land where the Amway Arena used to be – as becoming the hub for all things metaverse in Orlando.

The mayor said Orlando has companies in industries such as augmented and virtual reality, gaming, artificial intelligence, 3D reconstruction and the Internet of Things.

“It’s a natural growth for a lot of the existing industry and talent that we have already here in Orlando that would make us the natural ‘meta center’ of the metaverse,” he commented.

According to Tim Giuliani, President and CEO of the Orlando Economic Partnership, which is also behind Orlando’s regional digital twin with Unity, the ‘Meta Center’ vision “is not an aspirational statement; it’s more of a statement of where we believe we are.”

He said: “Every city needs a story to tell.

“Up until the metaverse became a thing, it looked to us and to most people here like Orlando’s tech hubs and sectors were very siloed. What the metaverse illuminated for us is that all of these silos are actually all of the technological components of the metaverse.”

With the mayor, the Orlando Economic Partnership is working on initiatives to attract and retain metaverse-related companies in Orlando.

Giuliani isn’t worried about the metaverse being dead on arrival either.

“Just like mobile devices created Web 2.0, new technologies coupled with 5G are creating Web 3.0. The technologies required to bring augmented and virtual reality to life are being developed in Orlando,” he said.

“Whether the ultimate outcome is pervasive virtual worlds we interact within or a helmet that provides an augmented scenario in the skies to train our fighter pilots, the technology being developed here is fundamental to the emergence of Web 3.0. We’ve been in this field, developing technologies, for over 30 years. No matter what phrase is coined around AR/VR, AI, IoT, gaming, etc., we’ll continue to advance the technologies of the future.”

Regulation

It’s clear that the metaverse also brings wider risks too, from exacerbating the spread of mis- and disinformation and accessibility issues to cybersecurity threats and increased inequity.

There are potential challenges too such as the high costs of equipment, computing requirements, lack of standardisation and platform fragmentation.

Rantanen believes cities have an important and proactive role to play in the ethics of the metaverse, building on the work some have done around ethical AI and data.

“For the moment, cities should start defining the rules around this game,” Rantanen said, adding that this should also be happening at the national government level.

“We should be the ones who are beginning to look at understanding what the metaverse really means for our people and for our citizens,” he said.

For Dyer, the city’s role in Orlando is to be a “cheerleader” and provide support for metaverse companies such as through funding programmes, events and facilitating networks.

He sees it as more the federal government’s role to create any regulations around the metaverse, with input from cities and others.

“You can’t go city to city and have different rules on what’s happening in the metaverse,” Dyer said.

While he is positive about the opportunities for the metaverse to benefit Orlando, he said that cryptocurrency would be one potential component that worries him.

Others during the roundtable said the public sector shouldn’t be hasty in pushing out rules and regulations that prejudge or force the evolution of the metaverse before they fully understand it.

One US city leader cited examples such as the evolution of ride hailing, short-term rentals and scooters. He said: “When you rush out with certain laws or regulations, prescribing what a framework should be, most of the time you don’t get it right. So we have to adopt a nimble posture where we shape laws and regulations to encourage collaboration, protect vulnerable residents but also allow the marketplace to figure things out. The solutions do not always come from government; they will come from a team of private and public sector partners.”

Regulators are in the learning phase too. A spokesperson for the European Commission said there is “huge potential” in terms of how the metaverse could change the way people interact and how industries test and design products, as well as learning.

The Commission is thinking about the metaverse holistically, incorporating a “human-centric” approach, enabling technologies, data and security. It believes public-private partnerships have an important role to play.

In terms of regulation, the Commission will be monitoring the impact of legislation such as the Digital Services Act, the Digital Markets Act and the Artificial Intelligence Act.

“We really need to have a better, finer and deeper understanding before really regulating the metaverse,” the spokesperson said.

The European Commission plans to lay out a public policy document including its vision, principles and actions to support the emergence of the metaverse. Further, its next funding cycle for cities will include specific metaverse-related calls.

During the roundtable, Van Sprang outlined a draft manifesto around the values, principles, and goals that should guide the development and use of the metaverse in cities. This included that the metaverse should be safe, open and inclusive, and decentralised in terms of ownership. He said the metaverse should be a place of learning and innovation, minimise environmental impacts and be designed with the long-term health and wellbeing of its users in mind.

The manifesto will be developed collaboratively and shared in April during the Cities and the Metaverse summit in New York.