Virtual reality (VR) is a computer-generated three-dimensional environment that generally provides real-time interactivity for the user. Within this broad construct are many different forms of VR simulations, some quite simple and others extremely sophisticated. The technology is still quite new—in many cases practical implementations have only been in place since the early and mid-1990s—and relatively underdeveloped. For business uses, some successful applications of VR have been in such areas as product design and modeling, employee training, data visualization, and management decision-making aids. Consumer-oriented applications of VR include games and VR-enabled interactive Internet sites. Overall, in the first years of the 21st century design and education/training applications are seen as the most important for VR technology.

These and other uses are still mostly under development, but already some companies, notably in transportation equipment design, have reported significant cost and planning advantages to using VR versus conventional design methods. For example, automotive designers can use a simulation of proposed car design to pretest usability concerns like the driver's range of view through the windshield, the impact of glare on the windshield, how well the headlight design functions in different driving conditions, and a host of other design factors. If the simulation shows unfavorable results, the design can be changed at a relatively low cost compared to finding these problems only after a physical prototype is made. Thus, the VR design process can not only create a more ergonomic or user-friendly product, but also improve the technical design to reduce the cost of manufacturing, speed up the design phase, increase quality, and so forth.

Just as the uses of VR vary widely, so too do the software programs and hardware that run VR simulations. Most software applications must be at least partially customized by a developer, but increasingly there are off-the-shelf programs that facilitate building and navigating virtual environments. Hardware may range from a relatively recent desktop computer (older PCs would struggle with the graphics and processing demands of VR software) to a headset or even a room that creates a full 3-D sensory experience for the user.


Although the technology for computer simulation was not actually implemented until the early 1980s by Jaron Lanier in Foster City, California, the concept first received wide publicity in the novel Brave New World (1932) by Aldous Huxley. In this novel, set some 600 years in the future, mankind has built the perfect Utopia—complete with "Feelies," movies which give the viewer the ultimate sensation of interacting with the characters and events on the screen. This concept, however, remained just that until the 1960s, when Ivan Sutherland of Stanford University experimented with computer graphics and wrote a software program called SketchPad while working toward his doctoral degree. In an era when most people thought that computers were only for crunching numbers, Sutherland used clever software to make the computer manipulate engineering drawings. With SketchPad in the 1960s, Sutherland created the field of computer graphics and demonstrated an entirely new way of talking to the computer—interactive computing. In 1965, Sutherland realized that computers could conjure up powerful visual illusions, illusions that did not have to be confined to a flat, two-dimensional screen. He realized that computers held the key to a much richer kind of visualization and wondered what would happen if he could reach through the screen itself and surround himself in a simulated world. He then built an experimental helmet that gave the user the illusion of being inside a three-dimensional world. As the user moved his or her head, the pictures changed accordingly. But the technology was barely able to handle a simple geometrical world in those days.

More than two decades later, a group of scientists at the University of North Carolina, following Sutherland' s academic theories, brought the art of simulation to a level where it could be demonstrated. A head-mounted display (HMD), consisting of a pair of small TV displays, was connected to a helmet and a small tracking system that allowed the computer to determine where the helmet was in position and orientation at every instant. Using these two technologies, scientists were able to program computers to impart to the individual wearing the helmet the feeling of being immersed in a computer-simulated environment. So, instead of looking at a computer-generated image on a standard television set on a table top, the user seemed to be inside that world. And, instead of walking through the world by knobs, buttons, and rotators, the user was able to walk through that world just by looking around. The effect was made all the more vivid because the user was performing those actions he was performing in everyday life.

Jaron Lanier first brought the commercial applications of virtual reality to the public's attention. He almost certainly was influenced by the work of the United States government in flight simulation for the training of astronauts in its aerospace program. Believing that people should be able to create their own media products through interactive computer networks, Lanier founded VPL Research, Inc., as a vehicle for his research into "virtual reality,'" a term he invented. Virtual reality used the appeal of the simulated experiences of computer games to "sell" its multi-sensory data that combined sight, sound, and touch and its interactive capabilities which gave the user greater control. Over the ensuing years, the company introduced many virtual-space hardware products, such as the Datasuit and the Dataglove.


VR environments can be divided into four categories: (1) total immersion, (2) partial immersion, (3) augmented reality, and (4) desktop. Total immersion, the most elaborate and expensive form, attempts to put the user completely into a computer-generated world. Many total immersion systems are installed in their own rooms or in special modules so that the user may be surrounded by visual, audio, and any other sensory experiences being simulated. Partial immersion includes some special sensory devices, such as goggles or gloves, but is not as extensive as full immersion. Next, augmented reality creates images and sounds that are merged with real-life images or sounds. Augmented reality is sometimes seen as a hybrid or bridge environment between VR and the physical world. Finally, desktop VR is the most basic form, typically a 3-D interactive application on a desktop computer; in most cases this involves only standard computer equipment and no special viewing or other sensory devices. Desktop VR is generally the least costly VR environment.

Telepresence, a form of augmented reality, allows users to create or recreate distant events by being part of the action. Through the user of virtual reality, telepresence can simulate objects, sounds, worlds, and people. The essence of the distant event is conveyed to the user via network links. Real objects and sound are output to a head-mounted display (HMD) from digital data bases, which minimize the amount of information that has to be sent to the user via the communications pipeline. Indeed, telepresence, via microscopic television cameras and fiber optics, is already being used to show doctors how to use virtual reality to perform microscopic surgery.


Some of the key business and commercial fields that have deployed VR technology include aviation, engineering, medicine, law, and general management functions.


As early as 1988, the Simmod (Simulation Module) Air Traffic Control System was helping American Airlines to rank at or near the top as far as on-time performance. Simmod was a microcomputer-based air traffic model that simulated landings, ground movements, and take-offs at any airport in the world. American Airlines was the first to test the Federal Aviation Administration's (FAA) project. At that time, the FAA planned to make the Simmod module available as public-domain software. American Airlines found that senior management believed that Simmod was a crucial planning tool to identify bottlenecks and to predict how factors affected flight schedules.

A related area of aviation in which VR simulation has proven particularly significant is flight training, since it requires many hours of practice and to use real planes for all training is both expensive and more dangerous. Flight simulators are widely used in private industry as well as in military settings.


Virtual reality has proven a particularly useful tool in engineering and design. Major automotive, aerospace, and other machinery companies, for examples, have eagerly added VR capabilities to their product development processes. Although some see VR as a replacement for computer-aided design (CAD), in practice it is used to supplement CAD. Some companies have found it not only useful for the designers to use for themselves, but also for designers to communicate with non-engineers and non-technical decision makers who otherwise would learn very little from looking at a CAD representation of a product.


Although VR technology was deficient in tactile control—haptics—until the early 1990s, great strides were made in the technology that year as it related to medicine. For instance, one basic virtual reality system manipulates abstract objects via a disembodied hand that floats in space. The hand's movements are then translated into commands that can control the visual display. For more complex applications, such as surgery, however, information obtained from tactile manipulation is essential for precise maneuvers. Virtual reality researchers are experimenting with various approaches to solve such tactile deficiencies. One approach utilizes tactors, or tiny switches (created from a "shape memory" nickel-titanium alloy) that are sensitive to touch.

Other medical innovations also occurred in the early 1990s. In 1992, computer science professor Henry Fuchs and two graduate students superimposed ultrasonic images of a fetus onto a video image of a pregnant woman's abdomen to provide an accurate and unique perspective for guiding physicians as they inserted and manipulated probes in the body. In 1993, gastroenterologist Duncan Bell and his team of surgeons developed an imaging technique that allowed a physician to use computer-generated images of the patient's tissue to guide the performance of a colonoscopy.

This technology, some doctors believe, might one day permit surgeons to perform procedures from remote sites, bringing specialized care to small communities and rural hospitals. In addition, virtual reality enables superior medical visualization, based on data from CAT imaging systems, and better visualization of diagnostic scans. More immediately, however, a key use of VR simulations is in surgical training, enabling surgeons to hone their skills in an interactive environment without the risk of compromising a patient's health.


The legal profession has benefited from the technology's versatility, too. Law students investigating courtroom procedures and argumentation can vicariously interact with "individuals" in a fabricated courtroom. By testing several avenues of debate on the same case, prospective attorneys can see beforehand the results of various approaches to a case. Separately, virtual reality enables accident scenes and other critical events to be reconstructed in the courtroom.


Some interesting applications of VR since the mid-1990s have been directed at testing management decisions and strategies. For example, in 1998 Business Week reported that the retailer Macy's was having a store simulation model that would allow it to test layout and merchandising alternatives before physically implementing them. In this case, the VR system employs a series of so-called adaptive agents, which are computer simulations of individuals given general traits believed to exist in a certain population. These on-screen agents are programmed to make decisions on their own using logic supplied by the programmer.

The whole model depends heavily on the accuracy and comprehensiveness of the logic sets included in the program. Ideally the agents' collective "thoughts" and "actions" would be analogous to those of a representative sample of the real population. Thus, in the store setting, the agents move around the store, respond to different stimuli, and ultimately make purchases or fail to make purchases. The management can then make changes to the virtual store environment and see how the agents' behavior changes over some period, say, a week or a month (which is accelerated on the computer). Once the model is shown to have external validity, i.e., it accurately predicts real human behavior, the company can then use it as a tool for testing policies before they are put into action. Similar customer-response models have been developed in a variety of industries.

General training is another area VR systems are increasingly devoted to. While in activities such as flight simulation the training exercise is directed at hard skills, some of the more recent VR training simulations have focused on soft skills like interpersonal relations. One application, for example, takes participants through a difficult project in which they must secure cooperation from virtual agents, or avatars, who respond in different ways depending on their programmed personalities and on the trainee's behavior toward them.


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Watts, Tim, G.M. Peter Swann, and Naresh R. Pandit. "Virtual Reality and Innovation Potential." Business Strategy Review, autumn 1998.

Wimsatt, Alison. "Virtual Reality Software Really Flies." IIE Solutions, November 1998.

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