Blockchain could boost UK economy by £57bn by 2030

New analysis by PwC has suggested that blockchain technology could boost the UK’s gross domestic product (GDP) by £57 billion over the next decade.

The professional services firm’s economists 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.

The analysis predicted 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, according to PwC.

It is forecast to boost the UK economy by £30 billion 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, could give a £13 billion boost by 2030.

Identity management - including personal IDs, professional credentials and certificates - could help curb fraud and identity theft, giving an £8 billion boost by 2030.

The application of blockchain in contracts and dispute resolution is predicted to drive £3 billion into the economy, while customer engagement will get a £1.8 billion boost by 2030 – including blockchain’s use in loyalty programmes.

The report noted that 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.

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 £22 billion 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 (£15 billion), wholesale and retail (£13 billion), and communications and media (£5.3 billion) sectors by 2030.

Blockchain is also forecast to boost the global economy by $1.7 trillion by 2030. In terms of individual countries, blockchain could have the highest potential net benefit in China ($440 billion by 2030) and the US ($407 billion). Five other countries - Germany, Japan, the UK, India and France - are estimated to benefit by more than $50 billion by 2030.

The potential for blockchain is underscored by PwC research which revealed almost two thirds of global business leaders (61 per cent) are placing digital transformation of core business operations and processes among their top three priorities as they rebuild from COVID-19.

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 the pandemic, 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.”

He added that 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.”

The report also warned 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.

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