Blockchain technology stands to boost the global economy by $1.76 trillion – which is 1.4% of global GDP – in the next decade, according to a new report by consulting company PwC.
Through analysis of the top five uses of blockchain, ranked by their potential to generate economic value, the report gauges the technology's potential to create value across industry, from healthcare, government and public services, to manufacturing, finance, logistics and retail.
PwC’s “Time for Trust: The trillion-dollar reason to rethink blockchain” report identifies five key application areas of blockchain with potential to generate economic value: product tracking and tracing ($962 billion), financial services and payments ($433 billion), identity security and credentials ($224 billion), contracts and dispute resolution ($73 billion), customer engagement and reward programs ($54 billion).
"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," comments Steve Davies, Global Leader, Blockchain and Partner, PwC UK.
"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."
China stands to gain the highest potential net benefit at $440 billion, with the U.S. following at $407 billion. Germany, Japan, UK, India and France are each estimated to benefit by more than $50 billion in the same period, and the UAE is set to gain almost $7 billion.
The benefits for each country differ however, 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 securitisation and payments as well as identity and credentials.
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 US$574bn by 2030, by capitalising on the efficiencies blockchain will bring to the world of identity and credentials.
PwC added that, for blockchain to be successful more widely, a supportive policy environment is required, as well as a business ecosystem ready to exploit the new opportunities available.
This applies to internal as well as external processes, as Steve Davies, global blockchain leader at PwC, explained. “One of the biggest mistakes organisations can make with implementing emerging technologies is to leave it in the realm of the enthusiast in the team,” Davies said. “It needs C-suite support to identify the strategic opportunity and value, and to facilitate the right level of collaboration within an industry.
“Establishing proof of concept uses which can be scaled up if successful will enable businesses to identify the potential usages of blockchain, while building confidence and trust in its ability to deliver,” added Davies.