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By Alexander Jones, International Banker

 

An emerging technology with immense potential for business disruption, spatial computing is transforming the ways in which users interact with the digital world. Gathering innovation and concepts from various technological fields to create deeply immersive, fascinating interactions between humans and computers, this rapidly developing technology is capturing the imaginations of businesses globally. Enterprises deploying spatial-computing solutions have a tremendous opportunity to boost growth, diversification and productivity over the coming years.

At its core, spatial computing can be defined as the virtualisation of activities and interactions between machines, people, objects and the environments in which they take place. The term was initially coined by MIT (Massachusetts Institute of Technology) graduate student Simon Greenwold, whose 2003 thesis on the subject described spatial computing as “human interaction with a machine in which the machine retains and manipulates referents to real objects and spaces” and as “an essential component for making our machines fuller partners in our work and play”.

While both statements remain true and relevant today, what constitutes spatial computing has nonetheless evolved greatly, with new technologies being leveraged to combine digital and physical environments more seamlessly. “Unlike traditional computing, which merges data and logic in two dimensions, spatial computing integrates data, logic, and 3D contextualized information to more accurately connect the physical and digital worlds,” according to theBlue.ai, a company that offers a variety of artificial intelligence (AI) solutions and expertise. “This is made possible through the use of various data sources such as IoT sensors, 3D models, and advanced analytics, as well as 3D location data enabled by computer vision, volumetric cameras, and similar technologies.”

Digital data is thus being increasingly merged with the physical world, often in real-time, to deliver transformative results. “Spatial computing contextualizes business data and makes complex technical details more accessible,” Maciej Żwirski, partner associate at Deloitte Consulting Central Europe, recently noted. “It allows employees across different functions—whether in supply chain, marketing, or engineering—to interact with information in a more intuitive way.”

Given such applications, interest in spatial computing from businesses is surging, with manufacturing/warehouse and office settings both turning to the technology to fulfil a broad array of objectives. On the human-capital front, for instance, simulations can significantly bolster training modules by immersing employees in more realistic scenarios, thereby providing workers with more advanced skills than would otherwise have been possible.

At the same time, enterprises are also finding much success with spatial computing through use cases such as advanced simulation, which allows them to test different scenarios to see how various conditions will impact their operations. “With a stronger focus on effectively managing spatial data, organisations can drive more cutting-edge applications,” Deloitte noted in its “Tech Trends 2025” report. “In the coming years, advancements in AI could lead to seamless spatial computing experiences and improved interoperability, ultimately enabling AI agents to anticipate and proactively meet users’ needs.”

Indeed, AI represents one of the most crucial technologies being leveraged within the spatial-computing realm and is already playing a significant role in analysing and processing information for spatial-computing systems. “For example, AI can be used in tandem with 3D data to interpret and analyse real-world situations, improving decision-making and predictive capabilities,” explained Onirix, an augmented reality (AR) company focussed on spatial-computing solutions.

In terms of physical AI, meanwhile, spatial computing can leverage automation to boost the capabilities of humanoid robots, primarily through training modules that involve realistic virtual environments that can help robots navigate the physical world. “By leveraging technologies like XR teleoperation and digital twins, physical robots can navigate and operate in complex environments with high precision in complex and dynamic environments,” according to Nvidia.

Virtual reality (VR) also enables the creation of wholly immersive environments. This means the technology is increasingly being used to create lifelike simulations that can satisfy several business objectives. On the training front, for example, VR can be used for flight simulators to train pilots or for medical scenarios to educate doctors.

Augmented reality, meanwhile, involves overlaying digital content on the physical world, the results of which can be used across a broad range of applications, including navigation, maintenance and gaming. “For example, AR can help technicians visualize complex repair instructions on top of the actual equipment, improving efficiency and accuracy,” Onirix further explained, while mixed reality (MR) combines elements of both AR and VR and is used in applications that require interaction with digital elements in real-world environments. “For instance, architects can use MR to preview and fine-tune structural designs before construction, avoiding costly mistakes and streamlining the design process.”

Digital twins are also becoming an indispensable technology for spatial-computing users, particularly for replicating the physical world within a digital environment. This makes them essential for businesses seeking to deploy as granular an analysis as possible and for creating replicas of vast physical spaces, such as factories or warehouses, in order to optimise production processes. “Advancements in world capture and rendering facilitate the creation of digital twins, bringing real-world data into spatial computing devices for immersive experiences,” Nvidia stated. “This seamless blending of digital content with physical spaces supports applications in training, collaboration, and content creation across XR [extended reality] settings.”

In terms of specific business areas in which spatial computing can improve productivity and growth at present, PwC (PricewaterhouseCoopers) identified four key standouts:

  1. Process optimisation: Spatial-computing interfaces can help users achieve more effective interactions with machines, environments and people in the real world. For example, it can enable designs to be tested as digital twins, or it can offer real-time advice via AR overlays.
  1. Brand and community engagement: Virtual environments are increasingly sought after by businesses to ensure their marketing efforts not only reach new audiences but also ultimately tap new sources of growth 
  1. Employee experience: Creating immersive environments for employees can seriously boost worker productivity, engagement and focus. It also provides a unique way to promote team-building, day-to-day working and training.
  1. Revenue diversification: New immersive environments can offer significant opportunities for businesses to diversify revenue streams. “From expansion onto new customer-facing platforms to enabling collaboration and co-creation, spatial computing is at the heart of new income streams,” PwC observed.

A recent report from Precedence Research puts the global spatial-computing market size at $149.59 billion in 2024, expected to reach around $1,066.13 billion by 2034 at a hefty compound annual growth rate (CAGR) of 21.7 percent during the 2024-34 forecast period. The report noted that as of 2023, North America held the largest share of the spatial-computing market at 32 percent. The continent is thus a major centre for technical advancement, research and development (R&D) and the commercialisation of spatial-computing technology, the report added, noting the multitude of industry-leading businesses and research facilities based in the region, including Microsoft, Google, Apple, Facebook and Magic Leap.

“These developments have provided cutting-edge goods and experiences, which have propelled the market’s expansion. Particularly in major hotspots like Silicon Valley, Seattle, and Greater Boston, the area has a thriving startup scene,” the report also stated. “Technology-focused startups have surfaced and gained momentum, introducing new concepts, advancements, and competition to the market. These startups frequently push the limits of these technology applications, developing novel uses and stimulating the market.”

But while North America may command the leading share of the market at present, the Asia-Pacific (APAC) region is hot on its heels as the world’s fastest-growing region for spatial computing, with the report predicting a 22.2-percent CAGR during the forecast period. “High smartphone penetration rates in countries like China and India create a favourable environment for mobile-based spatial computing applications,” the report added. “Mobile AR experiences and applications are becoming increasingly popular. This is expected to drive market growth in the region during the forecast period.”

As for the imminent challenges facing spatial computing, Gartner recently pinpointed head-mounted displays (HMDs), which remain expensive and have an unappealing form factor. “The current generation of HMDs are heavy and visually unappealing, making it undesirable to wear them for long or in public,” the business and technology research firm stated on October 1, 2024. “They also have limited battery power and tend to isolate users from others, which could limit use in contexts that benefit from direct human interaction.”