New analysis by PwC shows Blockchain technology has the potential to boost the UK’s gross domestic product (GDP) by £57bn ($72bn) over the next decade.
PwC economists have assessed how the technology is currently being used and gauged its potential to create value across every industry, from healthcare, government and public services to manufacturing, finance, logistics and retail.
Steve Davies, global Blockchain leader at PwC, said: “Blockchain has long been associated with cryptocurrencies such as Bitcoin, but it has much more to offer, particularly in how public and private organisations secure, share and use data.
“As organisations grapple with the impact of Covid-19, we have seen an acceleration in many disruptive trends. Our analysis shows the potential for Blockchain to support UK organisations in how they rebuild and reconfigure their operations, underpinned by improvements in trust, transparency and efficiency.”
The report identifies five key application areas of Blockchain and assesses their potential to generate value using economic analysis and industry research. 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 products and services – or provenance – emerged as a new priority for many companies’ supply chains during the pandemic and offers the largest economic potential. It is forecast to boost the UK economy by £30bn ($39bn) by 2030. Blockchain’s application can be broad ranging from heavy industries, such as mining, through to fashion labels, helping respond to the rise in public and investor scrutiny around sustainable and ethical sourcing.
- Payments and financial services, including use of digital currencies, or supporting financial inclusion through cross border and remittance payments, £13bn (($16bn) boost by 2030.
- Identity management including personal IDs, professional credentials and certificates to help curb fraud and identity theft, £8bn ($10bn) boost by 2030.
- Application of Blockchain in contracts and dispute resolution £3.0bn ($3.9bn) boost by 2030, and customer engagement £1.8bn (($2.3bn) boost by 2030 including Blockchain’s use in loyalty programmes further extends its potential into a much wider range of public and private industry sectors.
Blockchain’s success will depend on a supportive policy environment, a business ecosystem that is ready to exploit the new opportunities that technology opens up, and adoption across industry sectors.
Public administration, education and healthcare sectors to receive biggest boost
The biggest beneficiaries from Blockchain technology look set to be the public administration, education and healthcare sectors in the UK. PwC economists expect these sectors to benefit to the tune of £22bn ($29bn) by 2030, by capitalising on the efficiencies Blockchain will bring to the world of identity and credentials.
Meanwhile, there will be broader benefits for the business services £15bn ($19bn), wholesale and retail £13bn ($17bn), and communications and media £5.3bn ($6.7bn) sectors by 2030. They will benefit from using Blockchain to engage consumers and meet demand for provenance and traceability.
Asia expected to benefit most
Blockchain is forecast to boost the global economy by $1.7 trillion by 2030, and, across all continents, Asia will see most economic benefit. In terms of individual countries, Blockchain could have the highest potential net benefit in China ($440bn by 2030) and the USA ($407bn by 2030). Five other countries – Germany, Japan, UK, India, and France – are estimated to benefit by more than $50bn by 2030.
The potential for Blockchain is underscored by PwC research which reveals almost two thirds of global business leaders (61%) are placing digital transformation of core business operations and processes among their top three priorities as they rebuild from Covid-19.
Steve Davies adds: “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. 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.”
The report warns that if Blockchain’s economic impact potential is to be realised, its energy overhead must be managed. Growing business and government action on climate change, including commitments to Net Zero transformation, will mean that organisations need to consider new models for consolidating and sharing infrastructure resources, to reduce reliance on traditional data centres, and their overall technology-related energy consumption.