State of Phygital 2021

Venture capital firm LETA Capital together with the tech company DEVAR published a report called “State of Phygital 2021”. We set a goal to reimagine the concept of “Phygital” and introduce a fresh look at the very fundamentals of “Phygital”, which is a set of technologies that combine the physical (offline) world with digital (online).

We are currently witnessing a paradigm shift from a so-called “Information Revolution” (which started back in 1975) to a “Phygital Revolution” due to a combination of multiple critical macroeconomic and technological factors listed in the report that emerged in a single moment in time.

The report also highlights some of the most striking discrepancies between the sweeping progress of Information Technology (IT) and the offline economy, admitting that IT and its existing interfaces are not capable of rescuing the rapidly shrinking offline economy. At the same time, authors share evidence of why the digital economy will start cannibalizing itself in a very short period of time unless it expands offline.

As a result, a subset of currently scattered technologies such as Augmented & Mixed Reality, IoT, 5G, brain-computer interfaces, and many others shall be united under the umbrella of Phygital, which is not just a new category, but rather a philosophy of new world order, which will inevitably lead to a dramatic redistribution of wealth and assets globally, primarily disrupting the offline world and acting as a gateway to the offline economy for today’s digital enterprises.

Anna Belova, CEO and Founder at DEVAR: "The digital world is closely intertwined with the physical and vice versa, today you can hardly imagine any physical object working without a digital component. Using our company as an example, from day one we chose to combine the world of physical objects and digital content, producing state-of-the-art children's books and augmented reality toys in millions of copies worldwide. Phygital is the lifeblood of Devar and all of its products and services."

Alexander Zemlyak, Associate at LETA Capital: "Phygital is an evolution of everything that has been developed in computing, AR and VR, which will radically change the way we live, work, communicate, travel, study, and entertain. As a result, all physical objects in the nearest future will become Phygital, i.e. powered by a set of breakthrough technologies (AR, IoT, M2M and others).  Online environments - social networks, e-commerce, and so on - that today exist only in digital form, will merge with physical objects not just as a supplement, but rather as an integral part of them."

Download the State of Phygital 2021