Eighty-four percent of companies worldwide are experimenting with blockchain, according to a new report from PwC.
One-quarter of organisations have projects that are either live or at the pilot stage, found the professional services company, whose report Blockchain is here: What’s your next move? Is published today.
Thirty-two percent of PwC’s survey respondents have projects in development, and 20 percent are researching the market.
PwC surveyed 600 senior business and technology decision-makers in 15 countries and territories worldwide. It found that – despite the reservations expressed by Bank of England governor Mark Carney in February – the financial services sector remains in the vanguard of blockchain adoption.
In 2017, Gartner found that 82 percent of reported blockchain use cases were in financial services, but the sector’s portion has dropped to 46 percent so far this year, suggesting that other businesses are now exploring the technology.
Those with emerging potential include: energy and utilities (identified by 14 percent of respondents); healthcare (14 percent); and industrial manufacturing (12 percent).
The US (29 percent) and China (18 percent) are perceived as the most advanced nations in blockchain development and deployment. However, nearly one-third of respondents believe the centre of gravity will shift to China over the next five years.
A new business world
There are other indications that blockchain is changing the business landscape, says PwC. For example, tokenisation is spreading to raw materials, finished goods, income-producing securities, membership rights, and more – including transport, the supply chain, carbon offset trading, and charitable donations.
At the same time, initial coin offerings (ICOs), in which a company sells a predefined number of digital tokens to the public, are funnelling billions of dollars into blockchain platforms. ICOs raised $13.7 billion in the first five months of 2018 alone, says PwC.
The largest offerings to date have included: EOS, which is focused on blockchain infrastructure; Huobi Token, a coin for a South Korean crypto exchange; and Hdac, an Internet of Things platform.
Meanwhile, enterprise software platforms that are the engines running internal operations such as finance, human resources, and customer relationship management, are beginning to integrate blockchain technologies, according to PwC.
For example, Microsoft, Oracle, SAP and Salesforce have all announced blockchain initiatives. In the future, many core business processes will run on – or interoperate with – blockchain-based systems, says PwC.
“Using blockchain in concert with enterprise resource planning platforms will enable companies to streamline processes, facilitate data sharing, and improve data integrity,” continues the report.
“As a distributed, tamperproof ledger, a well-designed blockchain doesn’t just cut out intermediaries, reduce costs, and increase speed and reach, it also offers greater transparency and traceability for many business processes.
“Gartner forecasts that blockchain will generate an annual business value of more than US $3 trillion by 2030. It’s possible to imagine that 10 to 20 percent of global economic infrastructure will be running on blockchain-based systems by that same year.”
Despite the cautious optimism (“it’s possible to imagine…”), PwC acknowledges that blockchain is neither a straightforward concept nor a shoo-in to the enterprise.
While the potential of distributed computing and ledger technologies is demonstrated by the high numbers of organisations trialling it, complexity, trust, and regulatory uncertainty remain the biggest barriers to deeper and more widespread adoption, according to the report.
Seven percent of organisations have paused their blockchain programmes as a result.
Summing up the report, PwC’s blockchain leader, Steve Davies, said: “Businesses tell us that they don’t want to be left behind by blockchain, even if at this early stage of its development, concerns on trust and regulation remain.
“Blockchain by its very definition should engender trust. But in reality, companies confront trust issues at nearly every turn.”
Internet of Business says
So how to manage a successful blockchain programme and get everyone onboard? These questions are explored in our separate analysis today, based on the same PwC data and report.