Called something like "Zone Two". I think it was written in mid-70s, and was originally written in German. The world is divided into at least two zones, a high-tech and contemporary tech one. After years of lack of contact an expedition enters the hi-tech zone and finds that the entire population is encased in virtual reality life support capsules and physically atrophied and/or dead.
Could possibly be Zone Null by Herbert W Franke, published in 1970 and apparently was translated into English in 1974.
Kirkus Reviews describes it thus:
This German antiutopia is the latest in Seabury's series of foreign science fiction. A strike force of scientists from the ""Free World"" invades the mysterious Zone Null. Daniel, one of the interlopers, discovers a perfectly balanced, automated society where computer time is the staff of life. But which is more repressive -- the computerized order of Zone Null or the apparent military dictatorship of the so-called ""Free World?""
I found a fragment of a Google Books description of the author saying that, long before cyberpunk, virtual worlds were a frequent part of his fiction (although it didn't mention specific works that it was part of), which is also suggestive of what you remember.