Analysis of the current landscape

In addition, there are technical challenges such as data privacy and security, interoperability, and standardization that need to be addressed to ensure successful implementation of Meta

VIET NAM NATIONAL UNIVERSITYUNIVERSITY OF ECONOMICS AND LAW

FINAL PROJECT

THE FACTORS THAT IMPACT THE IMPLEMENTATION OF METAVERSE IN THE CONSTRUCTION OF SMART CITIES

Ho Chi Minh City, April, 2023

We would like to extend our heartfelt thanks to our lecturer Ph.D Le Hoanh Su, for his invaluable guidance and support for our final project Thanks for his expertise, insightful feedback were instrumental in helping us develop our ideas and improve the quality of our work.

We would like to acknowledge the contributions of our group members, who worked diligently and collaboratively to complete this project.

Group 8

Chapter 1: INTRODUCTION1

1.1 Background and significance of the study 1

1.3 Research Objectives and Context 2

Chapter 2: ANALYSIS OF THE CURRENT LANDSCAPE4

Chapter 3: LITERATURE REVIEW AND RESEARCH MODEL10

3.1 Definition of Metaverse and Smart city 10

3.2.2 Promote tourism with Metaverse 12

5.1 The characteristics of the study sample 22 5.2 Descriptive statistics of technology factors 35 5.3 Descriptive statistics of social factors 36 5.4 Descriptive statistics of tourism factors 37 5.5 Descriptive statistics of economic factors 38

6.2 Future development direction 42

LIST OF FIGURES

Figure 2 1 Metaverse application in tourism (Source: Iruda Planet Metaverse Korea) 5 Figure 2 2 Administrative procedures: Registering residency information through the Metaverse platform (Source: Iruda Planet Metaverse Korea) 6 Figure 2 3 The industry’s market structure of the Metaverse (Source: Internet) 8

Figure 6 1 Hoi An City signed an online agreement with Bizverse through a tourism digital transformation project called Hoi An Metaverse to promote Hoi An tourism more widely

Figure 6 2 Phung Hung ancient house - a heritage in Hoi An is reproduced on Bizverse

Table 5 1 Statistical table describing technology factors 35 Table 5 2 Statistical table describing social factors 36 Table 5 3 Statistical table describing tourism factors 37 Table 5 4 Statistical table describing economic factors 38

1

Chapter 1: INTRODUCTION1.1.Background and significance of the study

Metaverse technology has the potential to revolutionize the way we build and develop smart cities Metaverse-based smart cities can provide improved efficiency, sustainability, and quality of life for citizens While many studies have explored the use of Metaverse technology in building smart cities, there are still gaps and challenges that need to be addressed For example, the potential impact on society, economic, In addition, there are technical challenges such as data privacy and security, interoperability, and standardization that need to be addressed to ensure successful implementation of Metaverse in smart city development Despite these challenges, the development of Metaverse-based smart city concept and framework has the potential to unlock new possibilities for urban planning and management Therefore, further research is needed to explore and address these gaps and challenges to fully realize the potential of Metaverse technology in building smart cities.

The significance of this study lies in its potential to address the factors that impact the implementation of Metaverse technology in the construction of smart cities By exploring the potential impact of Metaverse technology on society and the economy, as well as addressing technical challenges such as data privacy and security, interoperability, and standardization, this study can inform the development of a framework for successful implementation of Metaverse-based smart cities Such a framework has the potential to improve the efficiency, sustainability, and quality of life for citizens, unlock new possibilities for urban planning and management, and ultimately contribute to the development of more livable and sustainable cities As such, this study has significant implications for policymakers, urban planners, and other stakeholders involved in the construction of smart cities, and can pave the way for future research and innovation in this field.

2

1.2.Research Questions

To conduct a meaningful and impactful study, we have identified some research questions that can guide the research process:

• What is the current state of research on Metaverse technology and its potential applications in smart city development?

• What are the key factors that influence the successful implementation of Metaverse in the context of smart city development?

• What are the potential benefits and challenges of implementing Metaverse-based smart cities?

• Who are the stakeholders that can benefit from this research?

• What are the benefits and challenges of applying Metaverse technology in the development of smart cities in Vietnam (in a specific situation)?

1.3.Research Objectives and Context

The primary objective of this study is to identify and analyze the factors that impact the implementation of Metaverse technology in the construction of smart cities Specifically, this study aims to:

• Review the existing literature on Metaverse technology and its potential applications in smart city development.

• Identify the key factors that influence the successful implementation of Metaverse in the context of smart city development, such as data privacy and security, social factors, economical factors, technology factors, tourism factors.

• Evaluate the potential benefits and challenges of Metaverse-based smart cities • Outline the benefits and challenges of applying Metaverse technology in the

development of smart cities in Vietnam by a specific situation → Contributing to sustainable city development, catching up with global trends, quickly integrating into the worldwide technology era.

3

• Determine the skateholders that can benefit from this research, such as government agencies, urban planners, technology companies, and citizens Additionally, outline the roles of these parties in the implementation of the research.

• Provide in-depth information on how to use Metaverse technology to improve the quality of life, stimulate economic growth, and reduce some negative environmental impact (For instance, promoting remote work, conducting administrative procedures online through Metaverse technology instead of offline, thereby providing greater convenience for citizens while reducing traffic congestion and pollution.

Based on the current challenges Vietnam is facing in the urbanization process, including rapid urbanization, deteriorating infrastructure, traffic congestion, environmental degradation, and pressure in urban planning and management Applying this technology will help solve these challenges by providing real-time data, improving communication and collaboration more quickly and easily.

4

Chapter 2: ANALYSIS OF THE CURRENT LANDSCAPE

The current landscape of smart city development is constantly evolving, with new technologies and innovations emerging to address the challenges of urbanization Metaverse technology is one such innovation that holds for transforming the way we plan, design, and manage our cities However, as with any emerging technology, there are both opportunities and challenges associated with its implementation In this chapter, we will analyze the current landscape of implementing Metaverse technology in smart city development, focusing on the opportunities, challenges, advantages, and disadvantages of this technology By understanding these factors, we can gain a deeper insight into the potential of Metaverse technology for smart city development and identify the key areas that require attention in order to successfully implement this technology.

2.1 Opportunity

In recent years, there has been an increasing interest in implementing Metaverse technology in smart city development This technology has the potential to revolutionize urban planning and management, offering new possibilities for enhancing the efficiency, sustainability, and quality of life for citizens.

One of the main opportunities of implementing Metaverse in smart city development is the potential for improved urban planning This technology can provide a digital twin of the city, allowing for more accurate modeling and simulation of urban environments This can help urban planners to better understand the interactions between different urban systems and design more efficient and sustainable cities.

Another opportunity is the potential for more personalized and interactive citizen services Metaverse technology can enable the creation of immersive and interactive digital environments where citizens can engage with different services and interact with other citizens For instance, citizens can use Metaverse to participate in virtual town hall

5

meetings, conduct e-voting, or even attend virtual events This can enhance the quality of life for citizens and reduce many negative environmental impact.

Furthermore, Metaverse technology can also offer economic opportunities for cities By creating new digital products and services, cities can attract technology companies and entrepreneurs, boosting local innovation and job creation Additionally, the use of Metaverse technology can enhance tourism in cities, as visitors can experience the city virtually before even visiting it physically.

Figure 2 1 Metaverse application in tourism (Source: Iruda Planet Metaverse Korea)

6

Figure 2 2 Administrative procedures: Registering residency information through the Metaverse platform (Source: Iruda Planet Metaverse Korea)

2.2 Challenges

The implementation of Metaverse technology in smart city development also comes with various challenges that need to be addressed One of the biggest challenges is related to data privacy and security As Metaverse involves the use of personal data to create a virtual representation of a person, there is a risk of this data being misused or stolen In addition, as Metaverse is a new technology, there is a lack of clear regulations and policies on how to protect the privacy and security of user data Security researchers from Rutgers University said earlier this year they examined how voice command features on virtual reality headsets could lead to a serious privacy breach, called an "eavesdropping attack" This threat shows that hackers have the ability to use virtual reality (AR/VR) headsets with built-in motion sensors to record facial gestures related to speech, resulting in the steal sensitive information transmitted via voice-activated control, including credit card information and passwords

7

In addition, it's appearing the challenges related to currency exchange and NFT Like many currencies already existing in the real world, Metaverse will use its own currency or cryptocurrency It should be noted that cryptocurrencies can also lead to a significant increase in money laundering activities in the virtual economy of the Metaverse digital space As these cryptocurrencies are set to flourish, the lack of regulations on secure exchanges between buyers and sellers can lead to threats associated with currency exchanges NFTs can have integrity issues NFT regulates ownership of blocks of assets but does not provide storage for assets This can lead to ransomware or other attacks If NFT data files are encrypted in ransomware attacks, users will retain ownership, but they may be blocked from accessing the assets if they don't pay the ransom.

Another challenge is related to social factors Metaverse technology may not be accessible to all citizens, especially those who are not tech-savvy or do not have access to the required hardware and infrastructure This could create a digital divide and limit the potential benefits of Metaverse-based smart cities to a specific group of people.

Economic factors are also a challenge when it comes to the implementation of Metaverse in smart city development Building and maintaining Metaverse-based smart cities require significant investment, which may not be feasible for all cities In addition, the use of Metaverse technology may lead to job displacement in certain sectors, which could have negative economic impacts (job loss in some positons such as In-person retail jobs, Traditional tourism jobs, Office and administrative jobs, Manufacturing and transportation jobs).

There are also tourism factors to consider While Metaverse-based smart cities may attract tourists who are interested in experiencing new technology, there is also a risk of overreliance on technology that could affect the authenticity of a city's culture and identity There are several threats and problems associated with the implementation of Metaverse technology in the construction of smart cities For instance, according to a report by

8

security firm Trend Micro in August 2022, there are various security threats that may arise, including environmental impacts related to energy consumption, enforcement issues with regard to policy and permission violations, censorship of speech and activities within the Metaverse (e.g., fake news, hate speech, extremism, bullying, harassment, and racism), and potential network outages resulting from uplink or power failures that must be addressed appropriately.

2.3 Advantages

The utilization of Metaverse technology offers numerous advantages in the development of smart cities, which in turn can contribute towards achieving sustainable urban growth, aligning with global trends, and facilitating rapid integration into the digital age.

Figure 2 3 The industry’s market structure of the Metaverse (Source: Internet)

One significant advantage is the potential to enhance the efficiency of urban management Metaverse technology can provide a more comprehensive and detailed view of a city's infrastructure and resources, allowing the administrators for more efficient allocation and management This technology can also facilitate real-time data collection and analysis, enabling faster decision-making and more effective problem-solving.

Another advantage of Metaverse-based smart cities is the potential to create a more immersive and interactive urban experience By integrating physical and virtual spaces,

9

residents and visitors can engage with the city in new ways, such as exploring virtual landmarks or attending virtual events This immersive experience can also attract more tourists and businesses, contributing to the city's economic growth.

In addition, Metaverse technology can improve the quality of life for residents by providing more convenient and accessible services For example, administrative procedures can be conducted online through Metaverse technology instead of offline, thereby providing greater convenience for citizens while reducing traffic congestion and pollution This technology can also promote remote work, allowing individuals to work from home and reducing the need for daily commutes.

2.4 Disadvantages

Although the implementation of Metaverse technology in smart city construction has various advantages, it also presents several disadvantages that need attention One disadvantage is the potential for a digital divide, where people who do not have access to the necessary technology and infrastructure are left behind, widening existing socio-economic inequalities Moreover, the use of Metaverse technology could lead to job displacement in certain sectors, such as manual labor and some service industries, which could have negative economic impacts.

Furthermore, the implementation of Metaverse technology requires significant investments in infrastructure, equipment, and technical expertise This can be a challenge for developing countries and cities with limited resources and funding Additionally, the ongoing maintenance and upgrading of the Metaverse platform require continuous investment, which can be a financial burden for local governments and private investors.

10

Chapter 3: LITERATURE REVIEW AND RESEARCH MODEL3.1 Definition of Metaverse and Smart city

Metaverse refers to a collective virtual shared space, created by the convergence of physical and virtual reality, where users can interact with a computer-generated environment and other users A smart city, on the other hand, refers to a city that utilizes advanced technology and data analytics to optimize city operations and services, improve the quality of life of its citizens, and reduce negative environmental impacts.

3.2 Literature Review3.2.1 The basic technology

Article: Technologies that impact the metaverse in smart city building Author: Stylianos Mystakidis

This article aim to provide an explanation and understanding of the extended reality (XR) technology and its different forms, including virtual reality (VR), augmented reality (AR), mixed reality (MR), and their combinations, which are collectively known as Metaverse implementations It aims to define these concepts and provide an overview of their applications in smart city development.

➢ Extended Reality (XR)

Extended Reality or Cross Reality (XR) is an umbrella term that includes a series of immersive technologies; electronic, digital environments where data are represented and projected XR includes Virtual Reality (VR), Augmented Reality (AR) and Mixed Reality (MR) In all the above-mentioned XR facets, humans observe and interact in a fully or partially synthetic digital environment constructed by technology.

➢ Virtual Reality (VR)

11

VR is an alternate, completely separate, digitally created, artificial environment Users feel in VR that they are immersed, located in a different world and operate in similar ways just like in the physical surroundings With the help of specialized multisensory equipment such as immersion helmets, VR headsets and omnidirectional treadmills, this experience is amplified through the modalities of vision, sound, touch, movement and the natural interaction with virtual objects

➢ Augmented Reality (AR)

AR adopts a different approach towards physical spaces; it embeds digital inputs, virtual elements into the physical environment so as to enhance it It spatially merges the physical with the virtual world The end outcome is a spatially projected layer of digital artifacts mediated by devices, e.g., smart phones, tablets, glasses, contact lenses or other transparent surfaces Moreover, AR can also be implemented in VR headsets with pass through mode capability by displaying input from integrated camera sensors

➢ Mixed Reality

MR is a more complex concept and its definition has fluctuated across time, reflecting the contemporary technological trends and dominant linguistic meanings and narratives MR is sometimes represented as an advanced AR iteration in the sense that the physical environment interacts in real time with the projected digital data For instance, a scripted non-player character in an MR game would recognize the physical surroundings and hide behind under a desk or behind a couch Similar to VR, MR requires special glasses However, for the purpose of this article, we accept the conception of MR as any combination of AR and VR as well as intermediate variations such as augmented virtuality The rationale behind this decision is the long-term technological evolution and maturation of AR to include interactive affordances Therefore, AR and VR remain the two fundamental technologies and MR their combination

12 ➢ Metaverse Implementations

In the field of VR, the Metaverse was conceived as the 3D Internet or Web 3.0 Its first iteration was conceived as a web of virtual worlds where avatars would be able to travel seamlessly among them This vision was realized in Opensim’s Hypergrid Different social and stand-alone virtual worlds based on the open-source software Opensimulator were— and still are—reachable through the Hypergrid network that allows the movement of digital agents and their inventory across different platforms through hyperlinks However, Hypergrid was and is still not compatible with other popular proprietary virtual worlds such as Second Life

Currently, the second MR iteration of the Metaverse is under construction where social, immersive VR platforms will be compatible with massive multiplayer online video games, open game worlds and AR collaborative spaces According to this vision, users can meet, socialize and interact without restrictions in an embodied form as 3D holograms or avatars in physical or virtual spaces Currently, this is possible with several limitations within the same platform

Cross-platform and cross-technology meetings and interactions, where some users are in VR and others in AR environments, are the next frontier Common principles of the Metaverse include software interconnection and user teleportation between worlds This necessitates the interoperability of avatar personalization and the portability of accessories, props and inventory based on common standards.

3.2.2 Promote tourism with Metaverse

Article: Travelling the Metaverse: Potential Benefits and Main Challenges for Tourism

Sectors and Research Applications

Author: Salvatore Monaco, Giovanna Sacchi

13

This paper aims to highlight the potential impact of the Metaverse on tourism sectors as well as on research activities Open challenges concern the social acceptance, affordability, and environmental sustainability of these technologies

Research is needed on the Metaverse’s ability to reduce bias and accurately simulate real experiences, as well as on tourists’ perceptions, attitudes, and willingness to pay for mediated experiences Another important issue is the management of sensitive data that will travel through the Metaverse Looking forward, the Metaverse has the potential to become a valuable tool for advancing tourism research through virtual collaboration and interdisciplinary research projects

Nevertheless, while the (re)construction of immersive environments, goods, and services is becoming increasingly sophisticated, the Metaverse still proposes unrealistic objects, which may mislead users or challenge the validity of results through their lesser sense of reality Based on these considerations, research on the ability of the Metaverse to reduce or mitigate hypothetical bias in choice experiments is needed

Other research directions, currently unexplored, could focus on how the Metaverse could affect the decision-making behavior and consumption habits of tourists, and/or explore whether such technologies are applicable in other tourism niches In addition, further research must focus on people’s perceptions, attitudes, acceptance, and willingness to pay for AR/VR/MR experiences, while also considering cross-country and multi-cultural aspects, as noted by several scholars.

3.2.3 Economical factors

Article: Role of smart cities for economic development Author: Dominique Bonte

This research aims to explore the benefits and challenges of smart cities, with a focus on economic inequality and the impact of technology on the economy.

14

Smart cities offer numerous benefits such as cost savings, livability, safety, security, resilience, and sustainability However, there is a challenge of growing economic inequality, which occurs within and between cities Many cities have poor and unsafe areas excluded from technology-driven economic development, and governments need to address this by promoting economic and digital inclusion of disadvantaged communities Additionally, optimizing smart city approaches can lead to competition between cities, which can create an imbalance in growth within countries.

The economy is changing from traditional large enterprise-focused manufacturing and service industries to new models that increase efficiency, scalability, and asset utilization, including "as a service" sharing, community, and distributed models supporting microenterprises This shift is made possible by technologies like IoT, AI, robotics, automation, e-commerce, blockchain, and e-government Smart cities can take advantage of this change by stimulating technology and industry innovation that will drive job creation.

The key technologies such as on-demand, AI, and blockchain will be crucial for unlocking the potential of new economies Smart platforms in smart cities will use a closed-loop, demand-side approach to extract value from infrastructure, increasing efficiency and reducing costs AI and automation will be used across different areas, and blockchain will play a vital role in trusted interactions between participants in decentralized economies However, these smart economies will also be more vulnerable to cybersecurity threats, making the development of advanced standards even more important.

3.2.4 Social Factors

Article: The Social Shaping of the Metaverse as an Alternative to the Imaginaries of

Data-Driven Smart Cities: A Study in Science, Technology, and Society

Author: Simon Elias Bibri

15

This research aims to identify and analyze the potential ethical, social, and governance challenges that may arise with the development and implementation of the Metaverse, a virtual world that integrates multiple digital environments into a single shared space The research highlights several concerns related to social exclusion, privacy, security, trust, corporate-led technocratic governance, de-democratization, hive mentality, and cyber-utopianism, and argues that these challenges need to be addressed to ensure the sustainability and acceptance of the Metaverse.

Social Exclusion and Social Acceptance: Metaverse is unlikely to appeal to all groups of society due to the unequal distribution of socioeconomic benefits and risks, as well as personal preferences and beliefs Design factors such as fairness, cyberbullying, device and avatar acceptability, and privacy threats will determine the social acceptability of the Metaverse, which could potentially create new concerns and affect universal access and use of its products, services, and devices New skills and competencies may also be required, resulting in different degrees of acceptance.

Privacy, Security, and Trust: The Metaverse raises concerns about privacy, security, and trust for users, as current privacy mechanisms are insufficient Other concerns include hacking, data abuse, and identity protection Immersive technologies may also amplify deceptive abuses by fooling users and keeping them unaware of moral implications Data-Driven Corporate-Led Technocratic Governance and De-Democratization: The use of new technologies in smart cities promotes technocratic modes of urban governance, which undermines civil liberties and democracy In the Metaverse, human users are not given informed choices or asked for their views on the meanings of social life and virtual services, which limits their ability to find a place for the Metaverse in their everyday life Hive Mentality and Cyber-Utopianism: Democratic processes and spaces are crucial for governing user behavior in the Metaverse, as it is expected to have its own rules

16

underpinned by surveillance capitalism The concept of cyber-utopianism, where societies sacrifice humanity for technology, could lead to a dystopian world.

3.3 The Research Model

Figure 3 1 Reseach Model

17

Chapter 4: RESEARCH METHOD4.1 Methodology

4.1.1 Research design

There are two widely used research designs, qualitative and quantitative Qualitative research is descriptive in nature and presented in a narrative manner Quantitative research, on the other hand, is statistical in nature because the data collected is quantitative and analyzed from popular data analysis software In this research paper, we will identify opportunities and challenges when applying this technology to urban development in Vietnam, providing insights, and helping people understand how to use technology This technology enables people to improve their quality of life, promote economic growth, and reduce their environmental impact Therefore, the quantitative research method will be used by us to be able to provide clear data to help us analyze and make more useful suggestions.

4.1.2 Sample

Probability sampling: Based on probability theory to take random samples.

4.1.3 Simple Random Sampling:

A sampling method in which each element in the population has the same chance of being selected with equal probability To select a sample, the researcher must have a list of the study population Select a random sample to see how well students in other faculties and departments understand about Metaverse technology applied in building Smart City Example: Select 50 students from the total number of students from the School of Economics and Law with a confidence level of 95% The majority of the demographics are living in Ho Chi Minh City with 20 students from the FIS (40%) and 30 students from other faculties (60%), mainly aged 18-21 years old.

18

4.1.4 Data collection

To meet the objectives of the project, we will use email surveys to collect data Email surveys are defined as a data collection method used to collect quantitative data using surveys or questionnaires that are sent to targeted respondents via email Questions related to the research topic will be emailed to the research group and the data from the responses collected will be the basis for the research We chose to use this data collection method because email surveys help reach a wide audience in a short amount of time and keep costs down.

4.1.5 Data analysis

Secondary data will be gathered from relevant literature, reports, and databases After gathering, the data will be quantified to make it easier to analyze them statistically Once the questionnaires are filled, they will be coded, filtered and entered into SPSS where statistical techniques will be used to analyze them.

4.1.6 Ethical considerations

We will only gather general demographic data that can be utilized to inform the study to protect each participant In addition, the subjects' permission will be required before any data can be collected from them Only those people who agree to participate will be included as subjects because participation in this study is voluntary If any further information is gathered, we won't divulge it to a third party or utilize it for any other research projects It will only be gathered for use in this research project We use this part to explain how the project will follow an ethical code in practice and method Include any disclaimers or other paperwork you intend to give study participants Consider factors like secrecy, data security, privacy, and participant consent, among other options The majority of research procedures follow five or six ethical criteria.

19

4.2 Building questionnaires and scales4.2.1 Build a questionnaire

In this study, we use the Likert scale with a range of values of 1→ 5 to measure the respondents' perception of the impact of 5 groups of factors affecting the intention to choose an English center of the respondents Surname Scale of variables with 5 levels: Level 1: Very no effect; Level 2: No effect; Level 3: Little influence; Level 4: Influence; Level 5: Very influential.

CN1 Applying a variety of high technologies to build a smart city has an impact on investment costs CN2 People's acceptance of technology use

XH1 Information security should be a top concern

XH2 The adoption of Metaverse has a positive effect on the way we study, work and play

DL1 Contactless payment technology, internet of things, increase travel experience

DL2 In Covid pandemic, augmented reality technology makes online travel helpful DL3 Virtual reality detracts from the relaxing value

KT1 Metaverse in smart city construction affects the economy's workload KT2 Metaverse in smart city construction

affects current jobs and wages KT3 Metaverse in smart city construction

affects the exchange of goods

KT4 Metaverse in smart city construction has an impact on the use of cash

KT5 Metaverse in smart city construction that affects the transportation of goods

21

4.3 Questionaire survey

1/ Does the application of many types of high technology to build a smart city affect investment costs?

2/ Will people's acceptance of technology affect the deployment of different types of technology in smart city construction?

3/ In your opinion, should information security be the top concern when applying Metaverse?

4/ In your opinion, does the adoption of Metaverse have a positive effect on the way we study, work and play?

5/ Does technology factor (such as contactless payment technology, internet of things) enhance your travel experience?

6/ During Covid, when the demand for travel is high, will augmented reality technology to help online travel help you?

7/ Do you think virtual reality detracts from the relaxing value of travel?

8/ In your opinion, will the application of Metaverse in smart city construction affect the workload of the economy?

9/ In your opinion, does the application of Metaverse in smart city construction affect your current job and salary?

10/ In your opinion, does the application of Metaverse in smart city construction affect the exchange of goods?

11/ In your opinion, does the application of Metaverse in smart city construction affect the use of cash?

12/ In your opinion, does the application of Metaverse in smart city construction affect the transportation of goods?