Virtual training system

Unfortunately, we are often faced with tragic incidents such as large vessel incidents or fires, and it is determined that most of them are attributed to human faults. In other words, if training was properly provided, we could have avoided such terrible incidents, or at least could have reduced damage significantly. For the large device industry such as a plant or a nuclear power plant, if newcomers do not receive enough training on business practices or how to cope with an emergency because of cost or time spending, it could lead to a big tragedy at any time. In the defense area, flight training for fighter pilots is essential, although it is very dangerous and highly expensive. The best alternative to such highly expensive and risky field training is a virtual training system. This system uses computer simulation to realize virtual environments similar to the fields of defense, manufacturing, medical service and disaster, which help users be immersed in it as if it is real. So, the system can provide inexpensive and effective education and training, safer than the real thing.

Untitled-1.jpgCurrently, the biggest market for the virtual training system in the world is the defense area, and the system is penetrating other markets, including the industrial area such as job training, the public area such as disaster management and medical service, and the popular area such as health, sport and entertainment. In particular, the core components of the virtual training system have been dramatically priced down, including image generator, HMD, and motion sensing, which are forming a condition to make the related industries be popular. As our country owns competitiveness in the IT area, which is crucial to the virtual training system, as well as experience and knowledge accumulated while engaging in various manufacture industries, we have full potential to lead the world market if we foster the virtual training industry systematically. To advance into the emerging markets, there is an urgent need to form an industrial ecosystem for virtual training systems, including conducting R&Ds to create a technological foundation, legal system reorganization, building infrastructure and manpower training. In this context, we are going to look into the trends of the virtual training industry, the current condition of both domestic and overseas markets and development, implications to and challenging issues of the domestic industrial ecosystem, the direction of promoting R&Ds, and expected effects, in this month’s issue.

Shift in the trends of the virtual training industry

Increasing demand for highly expensive & high-risk industrial training

There is increasing demand for the virtual training system that substitutes for real field training, which is highly expensive and high risk, from the defense area, or the representative one of virtual training industry, as well as plant, aircraft, heavy chemical, and nuclear power industries, and public areas such as disaster management and surgical operation. In particular, when exporting products and technologies relevant to the above areas, virtual training systems are demanded, too.

Expanding remote collaboration

In the defense and disaster response areas, it is necessary for many participants in remote regions to simultaneously share a virtual environment to conduct collaborative training, mentor/mentee training, training that links virtual training with live training. New York City has an online collaboration training system; that is, while conducting a disaster training, related institutions, including field commander, firefighters, rescue/first aid crews and police officers simultaneously conduct fire extinguishment, human rescue and evacuation drills through remote collaboration.

Huge investment in immersive virtual reality technologies

Recently, there is a rapid change in virtual reality technologies from the existing graphic virtual reality that focuses on images, to immersive virtual reality technology development. In response to this new shift in the virtual reality industry, international competition is getting intense to occupy a gateway for market creation. Early in the last year, Facebook took over Oculus VR with 2.3 billion dollars to enter the market, with large companies such as Intel, Google and Apple making huge investments in virtual reality technology, which has been led by MS and Sony.

Creating a foundation to popularize virtual training systems

Untitled-2.jpgAs new virtual reality technologies advance, immersive devices for virtual training system have been dramatically priced down and the conditions for popularizing the industry are being formed. For example, the price of the existing high quality HMD was over US$5 million, and the Oculus HMD, released in recent days, is being sold at about US$300. Omni directional treadmill costs more than US$0.1 million, but the Omni Treadmill is expected to be available at US$500. As the current virtual reality gamers for home use and mobile-based mobile VRs are evolved to immersive type, it is expected that demand for virtual training system for individual/home uses will increase.

Trend of both domestic and overseas markets,

and development

Trends of overseas market and development

The global market of the virtual training industry has grown by 10.5% on average annually since 2003, and it is expected that it will reach about US$16.19 billion in 2016. The world market has already entered a growth stage and mostly, simulators dedicated to specific usage rather than systems for general use are popular, however, it is diversified to various industries compared to the domestic market.

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As the defense, manufacturing and disaster industries keep demanding the system, the markets are massive, and an emerging market of popular industry, such as medical services and sport, is being formed. The defense training market is large, and as it has entered a stabilized stage, the growth rate is getting slower, while the manufacture training market is maintaining steady growth rate. Disaster response training has increasing demand for skyscrapers, large cruise ships and nuclear power plants, so it has the biggest market and the highest growth rate. For medical services and health care, the market is not relatively big now, while the growth rate is far higher than other industries and we can say that the market has bright prospects.2016-03-09 17;45;16.PNG

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The current condition of the domestic market and development

The domestic market for virtual training systems has been growing by 11.1% on average annually since 2011, and it is expected that it will expand to about KRW 9 trillion by 2018. Although the market focused on simulators for defense use in the past, recently, the training system is vigorously accompanying the exports from the defense, nuclear power, marine plant, vessel ship and automobile  areas. For example, the export performance includes: T-50 training system (exported to Iraq and Indonesia, worth KRW 74 billion), KT-1 training system (exported to Peru, worth of KRW 3.1 billion), train training system (exported to Ukraine, India and Hong Kong, worth KRW 10 billion), automobile training system (exported to eighteen countries, including Germany, annually worth KRW 2~3 billion), and nuclear power plant training systems (exported to UAE, worth KRW 23 billion).

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The markets are being formed primarily in the defense training sector, along with the manufacture and the transportation operation sectors. Recently, the immersive and interactive entertainment such as health and sport, which is a popular B2C market, is rapidly emerging as a new market.

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Issues and implications

High degree of dependence on overseas companies for core technologies

Currently, most domestic companies that engage in the virtual training industry develop virtual training systems by integrating expensive foreign H/Ws (projector, graphic H/W, HMD, and actuator for motion platform) based on platforms developed in overseas countries. Due to this, system development costs increase, leading to reduced profit and technological dependency, which hinders company growth. For example, for high performance fighter plane simulators, image generators comprise more than 50% of development costs, and this gives difficulty to the company to compete with other companies with their own technologies in the world stage. Currently, many overseas virtual training system companies, such as MSC, VT MAK and ADMS, have and commercialized their own development platforms, often giving restrictions to our participation in the competition in the global market or weakening our competitiveness in terms of price. Meanwhile, as domestic virtual training development platform S/W and H/ W element technologies are sporadically developed, technology accumulation is not consistently carried out, deepening overseas dependence. Therefore, it is required to domestically produce core element technologies, which greatly depend on overseas companies, and to reuse the outcome of best R&Ds that have been already conducted.

Barriers to conducting independent development and penetrating the virtual training market by SMEs

As developing high performance virtual training system needs various high technology and high cost, it is highly risky for an SME to independently develop it. Thus, most SMEs are making use of foreign development platforms rather than utilizing their own technologies. To support these SMEs, there is an urgent need to develop domestic development platforms for low price and high performance.

In addition, development of high performance simulator for military use, which has more than 60% of domestic market share, is occupied mainly by large companies capable of developing live models. Thus, SMEs are not easy to lead the sector. For example, as KAI develops itself aircrafts such as K-1, T-50 and Surion, it can develop a training system making use of unique information of a live model, such as specification and aviation kinetics. But an SME has difficulty in obtaining such information.

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Therefore, most SMEs engaging in the virtual training industry need to turn to the popular market having higher market potential rather than the high performance training market such as defense and nuclear plant, which has a higher barrier in the market penetration. In particular, as mentioned above, some immersive devices of the virtual training system have been dramatically priced down due to advances in the new virtual reality technologies, which helped the VR industry become popular, and as immersive systems are being introduced to the B2C market such as entertainment, health and sport, which has a great market potential, it is necessary for SMEs to develop new popular markets.

Required to increase the use of virtual training in order to vitalize the market

The EU and other advanced countries are expanding the use of the virtual training by giving certificates through conducting surgery simulations and mandatory education for vehicles. For Korea, virtual simulators are rarely used in such education and certificate tests. In addition, it is required to foster related industries by making safety/disaster response drills mandatory. In Korea, safety/disaster response drills are being carried out in two Seoul Civil Safety Experience Centers and the Daegu Civil Safety Theme Park, but it is too short for the demand of the national level. So, to vitalize the market of the virtual training industry, it is essential and urgent that the government provides institutional support. If introducing virtual simulation becomes mandatory in various job trainings and national practical examinations, which will contribute to doing evaluations objectively, at the same time, reducing costs, it is expected that related industries will be able to grow a lot.

Support to grow globally competitive SMEs

It is necessary to enhance national support and lower barriers in the qualification conditions in order to foster the best SMEs of Korea to grow to become globally competitive SMEs. As the standard of the ‘World Class 300 project’, which aims at fostering professional SMEs of the global level, it is currently very difficult for SMEs engaging in virtual training industry to get the support. The criteria of candidate selection are restricted to more than KRW 40 billion of sales amount based on the previous year’s financial statements after the closing entries as of 2014, and the ratio of the recent three years’ (from 2010 to 2012) sales amount to R&D investment being 2% or higher, or the increase rate (CAGR*) of averaged annual sales amount during the recent five years (from 2008 to 2012) being 15% or higher. Moreover, due to lack of domestic manpower with global competitiveness, which is required for SMEs to enter the world market, and local experts, it is not so easy for them to enter the global market. Therefore, it is also required to provide institutional support to foster globally competitive manpower.

Ways to advance the development of virtual training system

Technology development strategies

Strategies for securing core technologies, for which we highly depend on overseas companies, include: ① With respect to technologies for which we lag far behind overseas companies, or technologies that have been popularized, we will keep using the foreign technologies; ② With respect to technologies which domestic companies possess partially, we will advance them by conducting additional R&Ds;  ③ With respect to technologies of basic research level, we will push ahead commercialization technology development to create domestic technological capability; and ④ We will link and utilize technologies that are promoted by other departments as projects. To do these, we are going to secure core element technologies through two stages.

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Strategies for building a Korean development platform of high quality and affordable price by packaging the secured element technologies include: ① Designing a development platform capable of having each element technology be mutually linked, and easily upgrading technologies;  ② Developing middleware, i.e. interface, where core element technologies, such as secured S/Ws, H/Ws and lessons-learned, can be loaded and used;  ③ Providing a market place feature for transactions, such as technology, contents and lessons-learned, within the platform; and ④ With respect to operation of the developed platform, the business group shall take the lead in the management during the development stage, followed by promoting transfer to a civil company. To do these, we will undertake works on the development platform and market place in two stages.

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Market strategies

① We will develop a virtual health training system, which has relatively lower barriers in the market penetration and is popular, in order to dominate the B2C market;  ② we will adjust to the specialized virtual training system market which is experiencing continuous expansion, including transportation driving and medical surgery trainings, by accumulating technologies; and ③ finally, we will develop a high quality training system market, including marine plant and unmanned aircraft.

<Photo 1> Virtual training in the fields of health, sport, driving, surgery, unmanned aircraft, and marine plant.

Firstly, we will develop immersive health/sports systems providing people with both fun and exercise effects, in order to dominate the related new industry markets. For example, there are emerging virtual health and sport markets, including the ExerGame Lab (treadmill, bike, cross stepper and ski) in the USA, Panasonic’s JOBA Fitness (horseback riding) in Japan, and visual sports, including golf and soccer, in Canada. In Korea, playing the indoor virtual golf developed by GOLFZON is very popular. Moreover, the market size of virtual health systems is expected to reach up to some 5 trillion KRW (as of 2021, according to Treadmill world). We will challenge the specialized virtual training system market both domestically and globally through technology accumulation. We will also expand the market to transportation driving training of high quality, surgery training, marine plant and unmanned aircraft operation training system, by raising the level of virtual training platform technologies. Especially, for the unmanned aircraft and marine plant areas, we will push ahead with the development of the training system by linking it with related industrial engine projects, and when exporting these products, it is expected that we will enter the global market by exporting training systems as well.

Strategies for building industrial ecosystem

To build an industrial ecosystem, we will ① develop  human resources; ② build an infrastructure; and ③ prepare and adjust legal systems necessary for advancing the virtual training industry. Firstly, as per developing human resources, we will make use of and advance development of the existing ‘Capability strengthening project for industrial experts’ to develop hands-on manpower in the industrial technologies that are relevant to the virtual training industry, including selecting and assisting civil training institutes aiming at training workforce to perform virtual training contents development, system maintenance, virtual training education and assessment, making use of and pushing ahead the existing ‘Human resource development project for industry mixing characterization’ to grow experts with planning ability and global competitiveness (developing mixing-typed human resource having technological understanding of virtual training system, future market forecast and management mind), and selecting and assisting an industrial mixing characterization college.

With regard to building an infrastructure, we will make use of the technologies and equipment owned by SMEs in the virtual training system area, will operate and expand the smart learning industry support center that is established to provide test beds for the existing virtual training development platform, and will expand and reform the support and organization of the current e-Training industry to support virtua virtual training SMEs and vitalize the related industries.
Finally, to prepare and adjust legal systems to develop the virtual training industry, we will devise an initial plan for a ‘Virtual training industry promotion law’ to vitalize the virtual training industry, through the civil ‘Virtual Training System Industry Forum’ (established in 2014). With this, we will carry out risk forecasting training or highway driving education utilizing driving simulators in the road driving education, will introduce simulators in the nationally recognized certification tests, will have the virtual training system standardized, and we will assist with certification systems.

Expected benefits

Strengthening of the virtual training industry and creating a new market are expected by domestically developing core element technologies of the virtual training system and by developing a multi-purpose virtual training platform. For the domestic market, we expect that the potential market size of the virtual training systems and services in the defense, education, manufacturing and medical industries will reach US$16.53 billion by 2023. With respect to domestic gross sales (%), we aim at attaining US$1.56 billion in 2013, US$5.7 billion in 2018 and US$18.2 billion in 2023. (Source: Frost & Sullivan, 2013).

For the global market, it is estimated that the size of the global potential market will reach US$251.43 billion by 2023, with domestic companies’ market share in the global market reaching 6.57% by 2023. (Source: Frost & Sullivan, 2013).
Moreover, it is possible to create 120,000 new jobs in the virtual training area by 2023. The employment to be created in the manufacturing industry will grow by 35% on average by 2025, and about 35% by 2025 in the education industry, with the disaster and medical sectors, which are public ones, being expected to grow rapidly after 2020. (Source: Frost & Sullivan research reports on e-Learning, 2012).
Lastly, it is expected that 20 global leading companies will be fostered in the virtual training system, and that we will be able to attain sales amount of US$10 billion globally competitive SMEs through element technologies and service industries such as high-quality image systems, sensory motion platform, and simulation technologies, will be made and expanding the industry into individual entertainment, popular education, health and arcade game markets, going beyond the virtual training industry, will be realized, which we expect will drive our exports to overseas countries.

Conclusion

Virtual training systems have huge potential as they can be applied to various areas, including defense, manufacturing, medical services, disaster response, transportation and entertainment. However, the domestic virtual training industry is still highly dependent on overseas companies with respect to development platforms and core technologies – mainly for the high-quality defense area, which hinders technology accumulation and weakens the companies’ international competitiveness. Due to the recent investment and advances in virtual reality technology, prices of the expensive existing equipment are falling dramatically. In this context, if we can link the excellent domestic power in the ICT and the manufacturing industries, with the virtual training system, it will provide a good opportunity to dominate emerging markets. At this time, it is very encouraging that the government is putting its efforts into vitalizing the entire industry ecosystem, including technological support, institutional support and manpower development, for companies engaging in the virtual training industry. From now on, it is necessary for the government to consistently nurture the virtual training system to a next-generation growth engine, and the related companies will also have to innovate themselves to prepare themselves for the future industries.

 
 
korean-electronics.com | Blog Magazine of korean electronics, brands and Goods

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