Western countries risk being left behind by China in the run for the development of the blockchain.
Four out of five executives (84pc) in Ireland interviewed by PwC say blockchain initiatives are underway but warn that trust and regulation are holding back the development of technology.
The technology, which underpins the emerging digital currency, the virtual currency or the cryptocurrency, consists of blocks that contain batch timestamps of valid recent transactions, which form a chain, with each block reinforcing the previous ones.
& # 39; Blockchain by its very definition should generate trust. But, in reality, companies face problems of trust almost at every turn
– RONAN FITZPATRICK
Technology has the potential to radically transform IT and a myriad of different industries.
New research from PwC – Blockchain is here. What's your next move? – interviewed 600 executives in 15 countries and territories on their blockchain development and opinions on its potential.
The report indicates that blockchain developments are accelerating globally, opening up opportunities such as reduced costs, increased speed and greater transparency and traceability.
A quarter of executives report a pilot project being implemented (10pc) or completely live (15pc). Almost one third (32pc) has projects in development and one fifth (20pc) is in research mode.
Break the chains that bind
The United States (29pc), China (18pc) and Australia (7pc) are perceived as the most advanced currently in the development of blockchain projects. However, within three to five years, respondents believe that China will have surpassed the United States (30pc), shifting the first center of influence and activity from the United States and Europe.
The survey reflects the predominant dominance of financial services developments in the sector, with 46% identifying it as the current leading sector and 41% in the short term (three to five years). The sectors identified by respondents with emerging potential within three to five years include energy and utility (14pc), healthcare (14pc) and industrial production (12pc).
Despite the potential of technology, respondents identified trust as one of the biggest obstacles to its adoption. The 45pc has identified it as a blocker for adoption, while the 48pc is cautious in regulatory uncertainty.
One in three of those who answered little or no involvement with blockchain cited the reasons as a cost (31pc), uncertainty about where to start (24pc) and governance problems (14pc).
"What business leaders in Ireland and around the world tell us is that no one wants to be left behind by the blockchain, although concerns about trust and regulation remain at this early stage of development," said David Lee, technology partner of PwC Ireland.
"A well-designed blockchain does not only cut intermediaries, but reduces costs [and] increases speed, scope, transparency and traceability for many business processes. The business case can be compelling if organizations understand what their ultimate game is in the use of technology and match it to their design. "
Business software platforms that are the driving force for business operations such as finance, human resources and customer relationship management are beginning to integrate the blockchain. For example, Microsoft, Oracle, SAP and Salesforce have announced all blockchain initiatives. In the future, many core business processes will work – or interact with – blockchain-based systems. The use of the blockchain in concert with the corporate resource planning platforms will allow companies to simplify processes, facilitate data sharing and improve data integrity.
"Blockchain, by definition, should generate trust," said Ronan Fitzpatrick, digital director of PwC Ireland.
"But, in reality, companies face trust problems almost at every turn: the failure to present a clear business case right from the start leads to the stalemate of projects – companies have to do more to build in their design how they can deal with trust and regulatory concerns.
"Creating and implementing blockchain to realize its potential is not an IT project, it is a transformation of business models, roles and processes, it needs a clear business case, an ecosystem to support it, with rules, standards and flexibility to deal with the normative change built ".