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An analysis by PwC shows that blockchain technology has the potential to increase global gross domestic product (GDP) by $ 1.76 trillion over the next decade. This is the key finding of a report that assesses how the technology is currently being used and explores the impact blockchain could have on the global economy.
By analyzing the top five uses of blockchain, ranked according to their potential to generate economic value, the report measures the potential of the technology to create value across the sector, from healthcare, government and utilities, to manufacturing, finance, logistics and retail.
“Blockchain technology has long been associated with cryptocurrencies such as Bitcoin, but there is a lot more it has to offer, particularly in the way public and private organizations protect, share and use data,” comments Steve Davies. Global Leader, Blockchain and Partner, PwC UK.
“As organizations address the impacts of the COVID-19 pandemic, many disruptive trends have 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 between organizations and society. ”
Key aspects
- The report identifies five key application areas of blockchain and assesses their potential to generate economic value using economic analysis and industry research. The analysis suggests a turning point in 2025 as blockchain technologies are expected to be widely adopted across the global economy.
- The monitoring and traceability of products and services – or provenance – that emerged as a new priority for many companies’ supply chains during the COVID-19 pandemic, has the greatest economic potential ($ 962 billion). The Blockchain application can be far-reaching and support companies ranging from heavy industries, including mining to fashion labels, responding to increased public and investor scrutiny over ethical and sustainable sourcing.
- Financial payments and services, including the use of digital currencies, or support for financial inclusion through cross-border payments and remittances ($ 433 billion).
- Identity Management ($ 224 billion), including personal IDs, professional credentials and certificates to help curb identity fraud and theft.
- The application of blockchain in contracts and dispute resolution ($ 73 billion) and customer engagement ($ 54 billion), including the use of blockchain in loyalty programs, further extends the potential of blockchain to a much wider range. wide of sectors of public and private industry.
The success of Blockchain will depend on a favorable political environment, a business ecosystem ready to exploit the new opportunities that technology opens up and an adequate industrial mix.
Economic benefits on all continents
Across all continents, Asia will likely see the greatest economic benefits from blockchain technology. In terms of individual countries, blockchain could have the highest potential net advantage in China ($ 440 billion) and the United States ($ 407 billion). Five other countries – Germany, Japan, the UK, India and France – are also estimated to have net benefits in excess of $ 50 billion.
The benefits for each country differ however, with manufacturing-focused economies like China and Germany benefiting most from provenance and traceability, while the US would benefit most from their application in securitization and payments, as well as identity and credentials.
At the sectoral level, the largest beneficiaries appear to be the public administration, education and health sectors. These sectors are expected to benefit from around $ 574 billion by 2030, leveraging the efficiency blockchain will bring to the world of identity and credentials.
Meanwhile, 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 sourcing demand and traceability.
Digital transformation as a top priority
The potential for blockchain to be considered as part of organizations’ future strategy is tied to research with business leaders that showed 61% of CEOs said they place digital transformation of core business operations and processes among the three. major priorities, while rebuilding from COVID-19.
“One of the biggest mistakes organizations can make with deploying emerging technologies is leaving it in the realm of team enthusiasts. It needs the support of C-Suite to function, identify strategic opportunity and value, and to facilitate the right level of collaboration within an industry, ”comments Davies.
“Given the scale of the economic disruption organizations are currently facing, establishing proof of concept uses that can be extended and scaled if successful will enable companies to identify value, building trust and transparency in the solution to deliver the potential. of the blockchain “.
The report warns that if the blockchain’s economic impact potential is to be realized, its energy overload must be managed. The growth of business and government activities on climate change, including commitments to Net Zero transformation, will mean that organizations will need to consider new models for consolidating and sharing infrastructure resources to reduce dependence on traditional data centers and their overall energy consumption related to technology.
