By Goh Puay Guan
SINGAPORE — In 2021, while the physical world was on a rollercoaster ride, it seemed that the virtual world was on a roll.
As entrepreneur and investor Peter Diamandis said in his book "The Future is Faster Than You Think", the already rapid pace of technological innovation is about to get faster.
Here are three major developments that changed the way we work and live during this tumultuous year.
1. Global supply chain
2021 was the year in which business and supply chain resilience, or the lack thereof, became obvious.
Fluctuations in supply and demand in the last two years made advanced planning difficult, and risky. As economies rebounded, capacity could not cope with the sudden surge in demand.
Companies and consumers alike started to realise the extent to which global supply chains were interconnected. While we may not usually pay much attention to macroeconomic factors in our lives, the effect of shipping delays and high inflation brought these issues to the forefront for consumers.
Semiconductor shortages led to downstream impacts on automotive and electronics companies. The automotive industry is expected to lose US$210 billion as a result of chip shortages that affect production volumes. Apple announced that sales for the iPhone 13 would be affected by the lack of components.
Turning the orthodoxy of outsourcing on its head, big companies such as Walmart and IKEA started to charter their own ships to ensure that their stores would remain stocked up during the holiday shopping season.
2. Tangible value from digital products
As the physical world was getting roiled, the virtual world seemed to be taking off. While online interactions became more important in 2020 as a result of safe distancing, in 2021 it seemed like digital products and digital worlds started to take on a life of their own.
The year saw the rise of non-fungible tokens (NFTs) as stored value for digital products as well as digitalised versions of physical products. These products can derive value from celebrity, for example, ex-Twitter CEO Jack Dorsey’s first tweet selling for more than US$2.9 million; or new products can also emerge out of obscurity to instant value, for example the digital CryptoPunks characters created by the company Larva Labs.
As with the rise of cryptocurrencies in the preceding decade, beauty and value, for now, are in the eyes of the beholder.
3. Virtual worlds becoming mainstream
Most of us were probably introduced to the word “metaverse” in 2021 when Facebook changed its name to “Meta”, even though the term and concept have been around since the 1990s. With this, Facebook aimed to create a series of virtual worlds where people could have their social and business interactions online using virtual reality.
In 2003, Second Life was launched which aimed to create a virtual world where people could live, build, and even undertake financial transactions to buy products. Although this concept only reached around 1 million users, new iterations of virtual worlds have continued to crop up since. With better technology and internet bandwidth, the virtual experience has continued to improve in realism and interactivity.
Although we are still far from the future depicted in the hit science fiction movie "Ready Player One", where people leave their mundane real lives behind to inhabit a far more exciting virtual world, commercial transactions for land and real estate in the metaverse are already occurring.
Again, while value is clearly in the eyes of the beholder, there are far more people now anticipating that possessions in the virtual world can translate into tangible value.
Perhaps the key takeaway for 2021 is that businesses will continue to find creative ways to deliver products and services to consumers, whether physically or virtually.
Goh Puay Guan is an associate professor in the Analytics & Operations Department at the National University of Singapore (NUS) Business School. He is also the Academic Director of the NUS MSc in Industry 4.0 programme. The opinions expressed are those of the writer and do not represent the views and opinions of NUS