Despite cryptocurrencies’ collapse in value this year, the adoption of the blockchain technology behind them by mainstream companies in search of cost savings and efficiency is almost certain to continue, if less quickly than originally anticipated. The survey indicates US companies are taking a much more cautious approach to the new technology.
Deloitte’s recently published 2018 Blockchain Survey captured responses from 1,052 executives in seven countries, 86% of which were C-Suite or above, at companies with at least $500 million in revenue. The largest percentage, 26%, were CIOs, followed by CEOs, 21%, EVPs at 13%, and COOs at 9%
Like companies’ adoption of internet technology, Deloitte notes that blockchain use cases are currently “dribbling” into production, although there’s a “gold rush” of ideas in the marketplace. The slowness in part is because established companies face several legacy concerns and they are seeking to fit blockchain into existing business models, which may benefit from the technology to greater or lesser degrees.
Nevertheless, fully 43% of survey respondents described their organizations as seeing blockchain technology as critically relevant and among the top five strategic priorities, while another 29% said it was important and among the top five priorities. In part, that’s because respondents saw several advantages of blockchain technology over their existing systems when considering their specific industries. Nearly one third, 32%, cited greater speed, while 28% said new business models and revenues sources, 21% said greater security and lower risk, and 16% said lower cost.
Interestingly, executives at US companies appear to be less enthused about the technology, or at least more cautious. Only 25% of respondents from US companies said their organizations will make investments of $5 million or more in blockchain technology in the next calendar year, by far the lowest among respondents from companies in Canada, China, France, Germany, Mexico and the UK. In fact, 43% of respondents from organizations in Canada and 47% from Mexico—the US’s two closest neighbors—said their organizations will invest at least $5 million in the technology. The winner was China, with 50% of respondents responding so.
Chinese respondents were also the most likely to say their organizations have blockchain functionality currently in production, followed by Mexico at 48%; the US, at 14%, was last. Chinese companies are also gobbling up blockchain expertise, with 86% of Chinese respondents affirming that their organizations are investing in hiring staff with blockchain experience. At least 40% of respondents in companies outside of China said the same, except for those at US companies, in which only 24% said their companies are on the hunt for blockchain experts.
US company respondents, at 16%, were the most likely to say their companies planned no investment in blockchain in the next calendar year, followed by Canada at 6% and the UK at 3%. Respondents from the other countries said their companies would make at least minor investments.
The clear majority of respondents, 84%, said they see blockchain technology as broadly scaleable and eventually achieving mainstream adoption. Another 77% said suppliers, customers, and/or competitors are discussing or working on blockchain solutions to address challenges in the value chain, and 74% said their companies’ executive teams believe there is a compelling business case for its use.
A perhaps unexpected survey finding is that companies in more traditional businesses are more likely to agree that blockchain technology will disrupt their industries—73% in the case of automotive, and 72% for oil and gas and for life sciences, including medical devices pharmaceutical companies. Overall, executives cite regulatory issues as the biggest barrier to greater investment in blockchain technology, 39%, while 37% checked replacing or adapting the technology to legacy systems, 35% for potential security threats, and 33% for uncertain ROI.
Most survey respondents, 52%, said their companies are focusing on the permissioned blockchain model, which resembles traditional central-authority data systems that authorize users with passwords and the completion of specific tasks. Permissioned blockchains batch data into time-stamped blocks, as do permission-less (open) blockchains such a bitcoin’s or ethereum. Public blockchains were cited by 44% of respondents, and the same percentage pointed to private blockchains, which are completely internal to the organization.
In terms of the uses cases companies are working on, supply chain, Internet of things, and digital identity were the top three, capturing 50% or more of votes. Digital records, digital currency, payments and voting also scored double-digit percentages.