As promised, we wanted to share some insights from my participation on a panel at this event. Judging by the attendees, this is clearly a technology that we all need to understand and embrace because it is gathering momentum. Having said that, the evangelists behind the technology should also look at the attendee list and think about getting a lot more actual users and consumers of the technology – otherwise they will significantly slow down the rate of adoption. Blockchain technology allows for much more transparency, trust, storage and conveyance of value etc. and these are the underpinnings of almost ALL commercial activity on earth! These are the factors that have allowed certain economies to flourish and others to wallow – it’s that big!
As I pointed out to them, much to many people’s chagrin, selling this technology in the procurement/supply chain community based on the typical “better, faster, cheaper” mantra is a losing proposition – current technical solutions in that function are having a hard time in getting justified. However, if the message is that this technology will lead to “more” commerce, then we have a winning hand and I got many nods during the session and even more after it. The question is not whether blockchain can deliver the technological breakthroughs but who will pay for them, why will they pay, who is the “buyer”??? Selling this based on avoiding regulatory risk through significantly improving the provenance of your supply chain is a losing battle – just ask any politician faced with spending money on flood control (an event that may or may not happen). Many more nods on this point as well.
A place where blockchain can have a tremendous impact is in those areas of the world where the lack of trust, transparency, value exchange has held economies back for decades – emerging markets. That is where villagers can leap technology curves and cut out various non value adding middle men and generate incremental commercial activity. Self-executing contracts can and will allow for significant economic growth. There were some very exciting applications of the technology happening already already that were presented and discussed at the conference. Big Pharma is using this for traceability and provenance which are critical in that industry. Another firm is using it to establish transparency in the diamond trade where blood diamonds are a critical issue. Tracking MTBF for airplane engine parts and tracing the parts back in their supply chain is providing some exciting information about the cause of the failure. The largest application is happening in the financial services sector and especially banking. Some of that sector view this technology as an existential threat and is fast moving to embrace the technology – a far more effective strategy than fighting it! They even sponsored a “hackathon” where teams were asked to develop prototypes and a couple of them had funding being lined up at the conference. Interestingly, the top 3 teams all had at least one person from India. I have no comment to make on that other than file it under things that make you go hmmmm!
My message was provocative and it got the desired result- their attention 🙂 . They need to focus on adoption of the technology in the procurement/supply chain function and for that they need to get the buyers, funders, users of the technology involved as quickly as possible and a quick survey of the audience confirmed their absence. I cautioned against ending up in the Betamax/VHS conundrum if they don’t start establishing some standards. Brian Behlendorf from The Linux Foundation (Executive Director, Hyperledger Project) spent an hour preaching this topic but I’m afraid that not too many people paid attention to his messages – I hope I’m dead wrong because he is/was dead right-they would do well to listen to him. I wish they would assign a small team to focus on adoption of this technology and what it will take to avoid the mistakes of past technological advances. Our advice to all our clients is to educate themselves and especially their IT counterparts. All you need to do is to google any blockchain event and see the companies that are represented there as already investing and applying this technology to know that you cannot be left behind.