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What do we know about the cost-effectiveness of XR technology?
XR technology has immense value in providing access to experiences and connections to people who live in rural areas and people with differing cognitive abilities, allowing for personalized learning at scale. It can be tricky to measure the cost-effectiveness of XR when it provides us with new and improved ways of learning and training that are not a one-for-one comparison with traditional methods.
For example, it costs less to send a classroom in Nevada on a virtual “field trip” to Washington, DC, than sending them there in person. VR is also a valuable tool for career exploration: A college student seeing a virtual “day in the life” of an architect can save money by not having to arrange this in-person experience. It can also help the student make an informed decision about their career path and, if it turns out they’re not truly interested in architecture, they won’t waste resources on an option that won’t ultimately be rewarding to them.
“VR allows us to bring a wider world of job experiences and diverse career options to rural students,” Falstad says, emphasizing VR’s potential impact in bridging geographical gaps in access to certain training. Widespread access to training also increases U.S. competitiveness in key industries facing labor shortages, such as manufacturing, by allowing a broader pool of workers to enter these jobs.
Jeremy Bailenson, a professor at Stanford University who researches VR and is founding director of the Virtual Human Interaction Lab, provides the DICE framework—dangerous, impossible, counterproductive, or expensive—to help determine when to use VR solutions. The “E” or “expensive” suggests possibilities for VR to help save costs. Bailenson references examples like training retail workers for crowded holiday shopping days, which is costly and logistically tricky to replicate but can, if workers are well trained, save or earn the business money while also leading to a better experience for the customer.
Other examples and promising evidence include:
- Streamlined access to training materials and instruction: Detailing specific ways augmented reality (AR) can help save money, such as reducing the cost associated with repeatedly using materials for training purposes and decreasing reliance on experts to solve situations.
- Reduced operational costs: Honeywell offers another example of the cost-efficient impact of XR, particularly in reducing operational costs. Through its implementation of VR and AR training programs for new employee onboarding, it reduced operational costs across various areas by as much as 50%.
- Improved customer satisfaction: Considerations of cost-effectiveness can also be measured by improved customer satisfaction, which is often linked to prolonged engagement with a company and, therefore, revenue for the company. According to Forbes, using VR for core skills training, like empathy, frequently improves customer experiences.
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Where we know XR technology has had a positive impact, how can we promote widespread adoption to scale the number of people who benefit?
We know that XR technology is an effective tool for worker and learner training. Scaling technology in industries and jobs where we know it works for training—and thus having a positive impact on many more people—requires a multi-pronged approach: sharing information on its effectiveness while making opportunities available for people to access the technology.
Information on its effectiveness can come in the form of sharing use cases about where XR works well to train learners and workers and support on-the-job learning highlighting and collecting data on cost-effectiveness and productivity gains, and dispelling myths about the technology. One big myth to bust, for example, is that XR will completely replace job training or traditional learning experiences; instead, it will enhance them.
One way JFF is helping workers and learners access the technology is through our small business technology pilots. We worked with manufacturing businesses to implement Augmentir, and we’re working with a diverse cohort of 21 businesses to train workers. Small businesses can benefit from seeing relevant peer use cases to recognize XR as a viable and practical solution for a business their size and not just large corporations. They can also stay in touch with regional intermediaries who can help connect them to opportunities.
Marcelo Dossantos explains how he does this at FloridaMakes, a statewide manufacturing intermediary.