These and many other insights are from Deloitte’s 2019 Global Blockchain Survey: Blockchain gets down to business. Based on interviews with 1,386 senior executives in twelve nations (Brazil, Canada, China, Germany, Hong Kong, Israel, Luxembourg, Singapore, Switzerland, United Arab Emirates, United Kingdom, and the United States), 53% of whom say blockchain technology has become a critical priority for their organizations in 2019. Please see page 2 of the study for a methodology. The study is available for download here (PDF, 52 pp., no opt-in).
Blockchain is gaining trust in the enterprise by succeeding at pragmatic, well-defined pilots that show the potential to scale into production. Deloitte found financial services leads blockchain adoption today with adoption accelerating in technology, life sciences, media, telecommunications, and government. Key insights from the survey include the following:
- 53% of senior executives say blockchain has become a critical priority for their organization this year, 10% higher than last year. Deloitte found that senior executives are gaining more experience and insights into blockchain’s potential contributions and pitfalls as more use cases are evaluated, piloted, and moved to production. The following graphic compares blockchain’s relevance between 2018 and 2019.
- 86% of senior executives interviewed believe that blockchain technology is broadly scalable and will eventually achieve mainstream adoption. The majority of senior executives (83%) believes there is a compelling business case for blockchain. 81% are planning to use blockchain to replace their system of record, which reflects a shift in mindset away from relying entirely on legacy systems. A growing number of senior executives also believe blockchain is overhyped (43% in 2019, up from 39% in 2018).
- Blockchain’s three greatest organizational barriers include implementation (which includes replacing or adapting existing legacy systems), regulatory issues, and potential security threats. Additional barriers include lack of in-house capabilities, uncertain Return on Investment (ROI), concerns over the sensitivity of the information, and the lack of a compelling application of the technology.
- 73% of enterprise leaders in China are prioritizing blockchain as one of their top five strategic priorities, the most in the ten nations surveyed. The Chinese government’s Ministry of Industry and Information Technology cited blockchain as a key driver of economic development in a recent economic analysis. The Chinese government sees product traceability, copyright protection, and smart contracts as examples of blockchain’s potential to strengthen China’s global technology direction. “China, more than anywhere else in the world, will use blockchain strategically instead of tactically,” says Paul Sin, consulting partner, Deloitte Advisory (Hong Kong) Ltd., and leader of Deloitte’s Asia-Pacific blockchain lab. “More projects are driven by top management who use blockchain as a strategic weapon rather than a productivity tool.” The following is a comparison of countries’ differing attitudes about blockchain along with several metrics.
- 18% of enterprises are planning to spend $10M or more on blockchain initiatives this year, and 23% will spend between $5M to $10M. Senior executives based in each of the twelve nations included in Deloitte’s survey are predicting wide variations in blockchain investment levels. Luxembourg, Switzerland, and Germany are the home nations of enterprises planning to invest $10M or more in blockchain technologies in the next twelve months.
- Blockchain use cases are proliferating today, with data validation (43%), data access/sharing (40%), and identity protection (39%) being the most popular. Enterprises are piloting blockchain to improve payments, achieve track and trace accuracy throughout their supply chains, and evaluating the digital currency aspects of the technology. It’s important to note that 87% of enterprises first start evaluating blockchain due to its innate strengths for enabling completely automated or touchless business processes. 86% of enterprises are evaluating and piloting blockchain to achieve the goals enabling new business models and revenue streams. Please click on the graphic to expand for easier reading.
For the majority of enterprises actively piloting and promoting blockchain into production, success is defined by greater process efficiency first. 55% of enterprises define blockchain success by the process efficiencies they can accomplish first, followed by cost saving (51%) and risk reduction (50%). Deloitte also found blockchain is proving to be an effective platform for revenue generation, enabling new business models and customer acquisition.