A new report by Deloitte has found that 39% of senior executives across the world believe blockchain is overhyped, despite interest in the technology’s potential applications.
In the US this figure was 44%, up from 34% in 2016.
The findings were based on a survey of over 1,000 senior executives from across seven countries in companies with over $500m or more in annual revenue. All those in the study had “at least a broad understanding” of blockchain technology and how their organisations planned to invest in it.
While blockchain is at “inflection point” read the report, with momentum shifting from “blockchain tourism” to the budding of practical business applications, this perception may have been driven by steep increases in token values over the last 18 months, and survey members conflating blockchain with this incentive layer.
Deloitte also points out that this attitude may be endemic of the “fits and starts” of a maturing industry.
“While executives in the financial services sector, for example, are leading the way in using blockchain to re-examine processes and functions that have remained static for decades, their counterparts in other sectors remain more reserved as they work to develop appropriate use cases for blockchain.”
A fifth (21%) of global respondents said they still lack a compelling application, but establishing viable use cases is only a fraction of the battle. Of the three-quarters (74%) that said they see a “compelling business case” for blockchain, just over a third (34%) said their company had initiated some sort of deployment.
“What remains important for these executives to recognize is the first rule of blockchain adoption: This is a business model change where companies need to focus on more than just a solid proof of concept for implementation,” said Deloitte.
“…blockchain, when properly implemented, should fundamentally change how a business operates, it impacts the entire organisation, creating new tax and cyber implications along with a variety of governance and regulatory issues that need to be addressed.”
The new ‘age of steam’?
Despite the challenges posed by integration, however, the report was bullish on blockchain’s potential comparing the technology’s stage of adoption to the “days when steam – and gas-powered automobiles began replacing the horse and carriage…”.
“New technology breakthroughs have always captured the public’s attention, even at times when it wasn’t yet ready for mainstream consumption. Blockchain is, in our opinion, at a similar point in its development.”
But while early adopters, such as cryptocurrency traders, have brought blockchain well-and-truly to the public eye, with 61% of respondents in France and the UK agreed that blockchain was just a “database for money”, Deloitte says that these early use cases may have embedded “stagnant” perceptions” around the technology’s capabilities.
And while there are indeed examples of blockchain’s broader application in existence, respondents said that there aren’t enough that they can currently employ to advance their beliefs, which Deloitte suggests is leading to a “blockchain fatigue” among those who think the technology’s application has been over-communicated.
“Based on our view of where blockchain is today and, more importantly, its likely adoption rate within the next three years, we strongly believe that organisations need to evolve their thinking around the technology.”
Supporting Deloitte’s positive outlook, the International Data Corporation recently forecasted that worldwide spend on blockchain would reach $11.7bn (£8.9bn) in 2022, while spend on the technology by the end of 2018 will be on track to double that of last year at $1.5bn (£1.14bn).
Meanwhile, 39% of Deloitte’s respondents reported that their organisation will invest $5m (£4.2m) or more in blockchain in the coming year, while 84% agreed that the technology is broadly scalable and will eventually achieve mainstream adoption.
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