2 Foreword Physical world around us today is very different from the one 50 years ago – all due to technology innovation. It is hard to imagine how the world will look like in 10 years, though we can make educated guesses based on the technologies that exist today and the trends where we see the tech is going. Digital has become huge for each of us, but in most cases, population using the Internet in just over 10 years. What it is still separated from the physical world. Digital is will happen then? The digital economy will start tightly intertwined with the physical, you can hardly cannibalizing itself unless it expands offline. imagine any physical object operating without a digital An average global internet user spends almost 6 hours component today. However, digital serves rather as an online each day (3.6 hours on mobile, 2 hours on invisible hand, while we believe it should be vice versa – desktop/laptop and 0.7 hours on other connected anyphysical object from parcel box to largest real estate [3] shall be constructed and utilized in accordance with the devices) . Given that on average a person sleeps for 8 digital use-cases that can be applied to these physical hours a day, we have up to 10 more hours as an upside to objects. becaptured and utilized by Phygital. AL Despite its rapid growth in recent decades, the digital WeseePhygitalasthephilosophyofanewworldorder, economy still accounts for less than 6% of the total where Phygital essentially enables the close integration [1] of the virtual environment (digital) into real human life economy, while offline dominates heavily. However, (physical). with the rise of digital natives we estimate digital will reach at least 50% of the world GDP within the next 15- Phygital is an innovation that creates an industry and 25years—that’sawhopping$100-200trillionupside. subsequent new technologies, making it an especially OF PHYGITE Ontheotherhand,wecanseethatthedigitaleconomyis important category. Some innovations are more transient under a huge threat itself as it will very shortly reach its and come and go very quickly, but the ones that really AT full capacity in terms of user penetration worldwide. As matter are the ones that generate whole new industries. of Apr 2021, 4.8 billion people around the world use the In this report, we will cover all things Phygital, paying ST internet (60%+ of population), with 330 million new users special attention to the modern technology enablers such [2] added over the past 12 months (that’s 990,000 new as Augmented Reality (AR), as well as showcasing the users each day!). In the UK 95% of population already use numerous use-cases of Phygital, some of which are Internet,[3] 93% in South Korea, 90% in Germany and already deployed, while others will soon be possible due 2021 Netherlands, 86% in France, 78% in North America. If this to innovation in hardware, electronics and software trend continues, we will have 100% of the world development. Photo by Masaru Suzuki