Key findings

• Immersive is already an economic reality in the UK: We estimate there are 1,000 immersive specialist companies in the UK employing around 4,500 people and generating £660 million in sales, potentially representing as much as 9% of the global market share
• Immersive is a young, growing, confident and export-intensive sector: Six out of 10 immersive specialists grew their turnover in the last 12 months, and 90% were confident about their future prospects.
• Immersive companies are creating value in many sectors across the economy: Although 80% of the companies we surveyed operate in creative and digital markets, two-thirds mentioned other markets, ranging from education and manufacturing to architecture and energy.
• Much of the immersive activity is concentrated in London, but there are hotspots of activity across the UK: Although over two third of immersive companies are in London, we detect hotspots of immersive activity in many other parts of the UK including Brighton, Bristol, Newcastle, Liverpool, Manchester, Cambridge, Oxford and Edinburgh.
• There has been a rapid expansion in the levels of public support for research and development in immersive technologies: We have identified 253 immersive technology projects worth a total of £160 million in UK Research Councils, Innovate UK and EU Horizon 2020 open datasets. The funding devoted to immersive technology projects was nine times higher in 2016-2017 than in 2009-2010.

We have used two-dimensional media for centuries to access content and knowledge – pages in books and newspapers, screens in cinemas, televisions, computers and smartphones. Immersive technologies such as virtual reality, augmented reality and mixed reality take us further by placing us right inside incredible virtual environments. They enhance the world around us with useful, usable information. Immersive seems about to realise the dreams of science-fiction writers and futurists, transforming how we communicate, work and play.

There is much excitement about the growth prospects for the sector, and about the UK’s ability to reap the rewards of the immersive boom. Our historical strengths in arts, science and technology are coming together in new, globally-leading ventures with strong backing from government.

This report, commissioned by Immerse UK with funding from Innovate UK, provides hard data about the size of the sector, its performance, its geography, the drivers of success and the barriers to growth. Information was gathered and analysed by Nesta, with help from Glass – a startup with expertise in text mining from websites – and from strategy and research consultancy MTM London, through a combination of machine learning, a business survey and in-depth interviews.