- PwC has put together a report that shows that Blockchain technology has the potential to boost the global GDP by $1.76 trillion over the next decade
PwC has put together a report that shows that Blockchain technology has the potential to boost the global GDP by $1.76 trillion over the next decade. The report — which is called Time for trust: The trillion-dollar reason to rethink blockchain (http://www.pwc.com/timefortrust) — assesses how the technology is being currently used and exploring the impact blockchain could have on the global economy.
And through analysis of the top five uses of blockchain — ranked by their potential to generate economic value — the report gauges the technology’s potential for creating value across various industries ranging from healthcare, government and public services, to manufacturing, finance, logistics, and retail.
The report has identified 5 key application areas of blockchain and assesses their potential to generate economic value using economic analysis and industry research. And the analysis suggests a tipping point in 2025 as blockchain technologies are expected to be adopted at scale across the global economy.
Tracking and tracing of products and services (or provenance) — which emerged as a new priority for many companies’ supply chains during the COVID-19 pandemic has the largest economic potential ($962 billion).
And Blockchain’s application can be wide-ranging and support companies ranging from heavy industries — including mining through to fashion labels — responding to the rise in public and investor scrutiny around sustainable and ethical sourcing:
— The payments and financial services (including use of digital currencies) or supporting financial inclusion through cross-border and remittance payments have an economic potential of $433 billion.
— Identity management including personal IDs, professional credentials, and certificates to help curb fraud and identity theft has an economic potential of $224 billion.
— Application of blockchain in contracts and dispute resolution is valued at $73 billion and customer engagement is valued at $54 billion, including blockchain’s use in loyalty programs further extend blockchain’s potential into a much wider range of public and private industry sectors.
The success of Blockchain will depend on a supportive policy environment, a business ecosystem that is ready to exploit the new opportunities that technology opens, and a suitable industry mix.
Across all continents, Asia is most likely to see the most economic benefits from blockchain technology. And in terms of individual countries, blockchain could have the highest potential net benefit in China ($440 billion) and the USA ($407 billion). Five other countries – Germany, Japan, the UK, India, and France – are also estimated to have net benefits over US$50 billion.
The benefits for each country will differ with manufacturing focused economies such as China and Germany benefiting more from provenance and traceability while the US would benefit most from its application in securitization and payments as well as identity and credentials. And at a sector level, the biggest beneficiaries look set to be the public administration, education, and healthcare sectors. PwC expects these sectors to benefit approximately $574 billion by 2030, by capitalizing on the efficiencies blockchain will bring to the world of identity and credentials.
There will be broader benefits for business services, communications and media while wholesalers, retailers, manufacturers, and construction services will benefit from using blockchain to engage consumers and meet the demand for provenance and traceability. And the potential for blockchain to be considered as part of organizations’ future strategy is linked to research by PwC with business leaders that showed almost two-thirds of CEOs (61%) said they were placing digital transformation of core business operations and processes among their top three priorities, as they rebuild from COVID-19.
The report warned that if blockchain’s economic impact potential is to be realized, its energy overhead must be managed. And growing business and government action on climate change, including commitments to Net Zero transformation will mean that organizations need to consider new models for consolidating and sharing infrastructure resources to reduce reliance on traditional data centers and their overall technology-related energy consumption.
“Blockchain technology has long been associated with cryptocurrencies such as Bitcoin, but there is so much more that it has to offer, particularly in how public and private organizations secure, share and use data.”
“As organizations grapple with the impacts of the COVID-19 pandemic, many disruptive trends have been accelerated. The analysis shows the potential for blockchain to support organizations in how they rebuild and reconfigure their operations underpinned by improvements in trust, transparency, and efficiency across organizations and society.”
“One of the biggest mistakes organizations can make with implementing emerging technologies is to leave it in the realm of the enthusiast in the team. It needs C-Suite support to work, identify the strategic opportunity and value, and to facilitate the right level of collaboration within an industry,” comments Steve Davies. “Given the scale of economic disruption organizations are dealing with currently, establishing proof of concept uses which can be extended and scaled if successful, will enable businesses to identify the value, while building trust and transparency in the solution to deliver on blockchain’s potential.”
— Steve Davies, Global Leader, Blockchain and Partner, PwC UK