Designing the industrial future with XR: skills, strategy and timing

Extended reality (XR) covers the full spectrum of immersive technologies – virtual reality (VR), augmented reality (AR) and mixed reality (MR) – that blend physical and digitally generated information to varying degrees. XR is the enabling layer of what researchers and policymakers increasingly call next-generation virtual worlds. It is persistent, interconnected, immersive environments in which social, economic and educational interactions can take place with a level of presence and interactivity that goes far beyond conventional screen-based digital tools (OECD, 2022; World Economic Forum, 2023).

XR is now moving beyond experimentation and into concrete industrial applications. For EIT Manufacturing South, this shift is central to a broader series exploring how XR and virtual worlds are reshaping manufacturing, skills and innovation ecosystems. They are directly relevant to the European Commission’s priorities on digital skills, the European Skills Agenda, the AI Act implementation roadmap and the EU’s strategic autonomy ambitions in deep-tech sectors.

In conversation with Alessandro Pollini, Interaction Design in Smart Objects Lab, and Ioannis Chatzigiannakis, Professor at Sapienza University of Rome, EIT Manufacturing South reflects on the real impact of XR today and what it means for companies, young professionals, and the future of industrial design.

Where XR delivers real value today and where hype remains

XR has gone through hype cycles, especially with the rise of the metaverse narrative. Yet, according to Chatzigiannakis, some domains already show measurable results.

Training and education stand out as the most mature use cases, with clear gains in efficiency, cost reduction and accessibility. XR enables immersive learning without disrupting production lines, allowing workers to train safely and repeatedly in simulated environments. These benefits are increasingly relevant for manufacturing organisations seeking faster reskilling pathways.

Beyond training, XR is proving effective in operational settings, supporting human-machine interaction, improving safety through real-time alerts and enabling more efficient workflows. Sales and customer engagement also benefit from immersive demonstrations that shorten decision cycles and enhance product understanding, particularly for complex or high-value industrial products.

At the same time, large-scale rollouts remain limited. Many applications are still in pilot phases, and organisations are carefully assessing where XR truly creates value rather than simply following hype.

XR and design: from concept to experimentation

One of the most significant transformations is happening in design and innovation processes. Virtual environments allow designers to simulate products, processes and user interactions earlier in the development cycle, reducing the need for physical prototypes and accelerating feedback loops.

Critically, XR breaks the sequential logic that governs most innovation processes: rather than testing one idea at a time and committing months to finding out whether it works, teams can run multiple scenarios in parallel within the same immersive environment, stress-testing alternative configurations, user journeys and solutions simultaneously.

“Think about your last major product development cycle”, says Pollini. “At some point, maybe three months in, you realised the initial direction needed significant rework. Between rework, delayed launch and team time, the incurred costs may be relatively contained. Now imagine your team had simulated five versions of that product in an immersive environment in the first three weeks. They would have seen the flaw before a single physical component was manufactured. That six-month delay becomes a two-week decision. With just a fraction of the loss, you get an investment in exploration. The difference, compounded across your annual innovation portfolio, is the kind of figure that changes how a board talks about R&D efficiency”, he concludes.

Alessandro Pollini

Integration with artificial intelligence (AI) tools further enables rapid creation of visual scenarios and user research environments, accelerating experimentation and making it more inclusive. Early-stage prototypes can be validated with real users before a single physical component is manufactured, generating the kind of behavioural evidence that reduces the risk of committing to the wrong direction at scale.

Remote collaboration is another key advantage. Teams distributed across locations can interact with the same digital object or environment, improving alignment and reducing time-to-decision. Cross-functional teams, engineers, designers and business leads can co-design and co-evaluate in the same immersive workspace, eliminating translation losses that typically accumulate during handoffs and silently consume much of a company’s innovation budget.

XR to define competitive advantage

For manufacturers, the next two or three years will likely bring gradual but tangible adoption. Costs remain a barrier, especially for advanced hardware, but they are expected to decline as the ecosystem matures. However, standardisation efforts and integration with AI systems are expected to accelerate adoption, helping companies move from experimentation to scalable deployment.

Pollini emphasises that XR’s strength lies in its flexibility. “Extended reality can scale from simple augmented solutions to fully immersive environments, adapting to specific technical scenarios such as remote maintenance and complex industrial operations”, he highlights.

Maintenance emerges as a high-impact area. XR enables technicians to access contextual information, share perspectives remotely and solve problems in real time, reducing downtime and improving knowledge transfer across organisations. However, the availability of competencies is more critical. Implementing XR requires not only technical skills but also the ability to design meaningful use cases and align technology with business objectives.

Chatzigiannakis shares another challenge: the pace of technological evolution. Hardware and software improve rapidly, creating uncertainty for organisations considering investment. Early adopters may need to reinvest as platforms evolve, yet waiting too long risks missing competitive advantages. “There is always a cost for early movers”, he notes. “But delaying engagement with these technologies may mean losing significant opportunities in efficiency, product development and decision-making.”

The skills gap and the opportunity for young professionals

If technology is advancing quickly, workforce readiness is the real differentiator. XR demands hybrid capabilities: interaction design, user research, storytelling, 3D visualisation and an understanding of industrial contexts. Low-code tools and accessible platforms are lowering entry barriers, but structured learning pathways remain essential.

For young graduates in science, technology, engineering and mathematics (STEM) and early-career professionals, this represents a significant opportunity. Learning to combine AI-assisted design, immersive environments and rapid prototyping can lead to new roles across manufacturing, product development and innovation management.

A common concern from industry leaders is whether organisations can afford the time to develop these capabilities internally. The answer, as Chatzigiannakis explains, reframes the question entirely: “You don’t need to turn engineers into designers or technologists into business strategists. The goal is to give people who already lead, product owners, mid-to-senior executives, and innovation managers a common language and a shared methodology. By the end, a technical lead and a marketing director can co-design a prototype in the same immersive workspace, on the same afternoon and actually stress-test it together. No handoffs. No translation losses between functions. Because that time lost in translation between teams is where most innovation budget quietly disappears, and where restructuring how cross-functional teams collaborate, faster, in parallel, with immediate visual feedback that everyone in the room can engage with, makes the real difference.”

Ioannis Chatzigiannakis

Pollini underlines the importance of this mindset: “XR requires an interdisciplinary approach. It is not just programming or design alone. It is about understanding people’s needs and selecting the right technology with a clear purpose.”

This approach is reflected in initiatives such as the XR-Driven Design Thinking and Innovation course developed by EIT Manufacturing South in collaboration with SDR Centro Interdipartimentale Design Research – Sapienza University of Rome. The programme focuses on interdisciplinary learning, bringing together design, technology and business perspectives to prepare participants for real industrial scenarios.

Looking ahead: timing, interdisciplinarity, strategic choices

Over the next few years, the convergence of virtual worlds and rapidly advancing AI is set to become one of the most powerful combinations available to industrial organisations. Rather than competing priorities, the two technologies are proving deeply complementary: AI accelerates and enriches what virtual worlds make possible. At the same time, immersive environments give AI a purposeful, human-centred context in which to operate.

In practice, this means that simulation and prototyping capabilities are becoming faster, smarter and more responsive. AI-powered tools can now generate visual scenarios, populate virtual environments with realistic data and adapt experiences in real time to the user’s needs, compressing what once took weeks of design preparation into hours. Ultimately, the result is not simply better technology; it is a qualitatively different capacity for organisations to explore, decide and act.

Chatzigiannakis sees timing as the decisive factor and explains that the opportunity lies precisely in this integration: “Virtual worlds integrated with fast-improving AI are delivering a tool that is greater than the sum of its parts. XR gives AI a spatial, embodied context, and AI gives virtual worlds the intelligence to adapt, personalise and scale. Together, they can reduce design cycles, transform how teams collaborate and support faster, better-informed decisions. Organisations that engage with this combination now are not chasing a trend, they are building a durable competitive advantage.”

A call to industry and to the next generation

Manufacturing companies should start exploring XR where measurable impact already exists, such as training, maintenance and collaborative design, and build internal capabilities progressively.

For young professionals, the opportunity is equally compelling. XR sits at the intersection of digital transformation, sustainability and human-centric innovation. Those who develop hybrid skills today will shape how factories, products and teams evolve tomorrow.

In this interview series, we will explore further how XR and virtual worlds are not a distant vision. They are becoming a practical layer of the industrial ecosystem. The challenge now is not whether to engage, but how quickly organisations and talents can turn experimentation into capability.