Beyond efficiency: top trends for blockchain and DLT driving sustainability in business
Fujitsu / February 8, 2023
It is human nature to look ahead, and in my case, I map out what the future holds for Enterprise Blockchain and Distributed Ledger Technology (DLT) each year. The Team and I frequently explore the key trends and developments likely to shape the Enterprise Blockchain landscape in 2023 and beyond. From the continued adoption of Web3 technologies to the growing importance of interoperability, these trends will impact the Enterprise Blockchain space in the coming year. So, what more can we expect from Enterprise Blockchain in 2023? I have selected six from my long list, so read on.
The Enterprise Blockchain market has come a long way in recent years, with more and more companies turning to this technology to streamline their operations, remove friction points in their Value Chain, improve transparency and traceability, and reduce costs. Despite the potential challenges posed by a recession or adverse events within the cryptocurrency industry, the trend of corporate adoption is likely to continue in 2023 and beyond. There are several other exciting trends in Enterprise Blockchain in 2023.
- Trend 1: Corporate Adoption will continue to drive Mainstream Acceptance
- Trend 2: Interoperability between Enterprise Blockchain and Digital Corporate Systems is Real
- Trend 3: ESG and Sustainability Obligations from Different Stakeholders are enabled by Enterprise Blockchain
- Trend 4: Value Chain, Provenance, and Data Integrity Tracing via DLT becomes common
- Trend 5: Enterprise Blockchain is driving transformation by enabling Data Observability and Decision Intelligence
- Trend 6: Regulators are accelerating legislation and frameworks
Trend 1: Corporate Adoption will continue to drive Mainstream Acceptance
Corporate adoption of Blockchain and DLT is expected to continue driving mainstream adoption despite the potential recession and the overall perception impact of crypto incidents in 2022 (FTX, Binance, Ronin, Wormhole Defi, to name a few, with a combined value loss up to $2.2 billion).
Notwithstanding this bad news for the involved stakeholders, I noticed that large and small corporations are understanding and adopting enterprise-grade blockchain technology (DLT, permissioned, private, sometimes public permissioned) for various use cases and purposes. These include using it in their ecosystem as a base for process improvements, traceability solutions, increased transparency, implementing blockchain-based value chain and supply chain management systems, and exploring smart contracts.
One of the critical factors of further corporate adoption in 2023 remains the potential cost savings and efficiency gains that can be achieved using these technologies, even more so if the implementation covers not only the technology topics but also organizational and process topics in the broader ecosystem of a company (it is a business topic, not a technology one).
Another factor driving corporate adoption is the increasing regulatory clarity and support for frameworks expected to accelerate in 2023. Some of these legislations have been spurred by cryptocurrency-related anomalies in recent years. In many countries, regulatory bodies have created a more favorable environment for these technologies, making it easier for enterprises to adopt them.
Corporate adoption of blockchain and associated technologies, such as analytics, AI, and data platforms, to name a few, is expected to continue to drive mainstream acceptance. Enterprises can now provide evidence of their use cases, causing individuals and smaller businesses to understand and embrace them more.
Additionally, it is important to mention the third generation of the World Wide Web, often referred to as Web3, as it enables several new opportunities for enterprises and their internal and external systems. This third generation, the “semantic web,” as it is called by its inventor Tim Berners-Lee, was reframed in a blockchain context by Gavin Wood (co-founder of Ethereum and Polkadot) and shortened to Web3.
Web3 is characterized by decentralized technologies, such as blockchain and DLT, which enable greater transparency, security, and interoperability. So, they are related but not the same. Web3 is a broader concept encompassing decentralized technologies to build a more open and transparent internet. Blockchain and DLT are specific technologies used to record and verify transactions in a decentralized manner.
In most business contexts, you should know who does what and when. Web3 and Enterprise Blockchain converge in the solid approach to identity management (i.e., DID, VC, wallet usage) and the concept of ownership. Blockchain-based Identity Management allows it to create secure and verifiable digital identities for individuals, organizations, devices, and groups. It enables more secure, trustworthy, and efficient processes, such as onboarding new employees or customers or confirming data and asset activities.
While there may be some challenges and setbacks along the way, the potential benefits and the growing support from both the public and private sectors make it likely that we will see continued growth in acceptance in the coming years.
Trend 2: Interoperability between Enterprise Blockchain and Digital Corporate Systems is Real
In the past, enterprises' main challenge with adopting blockchain technology has often been the need for interoperability with existing systems. The complexity of specific solutions that allow interoperability or lack of understanding is still widely present. Companies need help integrating blockchain technology into their operations, as they would have to overhaul parts of their existing systems or processes. And even it is more challenging if the implemented solution is not fit for interoperability by design.
However, recent developments in Enterprise Blockchain and Distributed Ledger Technology and methodologies have made it easier for blockchain systems to be integrated with existing systems, even with other blockchain systems. Enterprise Blockchain Solutions are designed to be interoperable with other systems, enabling them to easily exchange information and data with other systems. Public blockchains are not always by design fit for this usage type.
Interoperability leads to easier Enterprise Blockchain development, allowing companies to integrate blockchain technology into their operations without completely overhauling their existing systems. It means that companies can take advantage of the benefits of blockchain technology, such as improved transparency, security, and efficiency, without incurring the higher costs and disruption associated with a full-scale system overhaul.
In addition, interoperability between Enterprise Blockchain and new digital systems is also helping to drive the further acceptance of blockchain technology. As new digital systems are developed, they can be easily integrated with existing Enterprise Blockchain systems, which makes it easier for companies to continue adopting these technologies.
Trend 3: ESG and Sustainability Obligations from Different Stakeholders are enabled by Enterprise Blockchain
There is currently a growing and structural focus on ESG (Environmental, Social, and Governance) goals and Sustainability, with stakeholders such as investors, consumers, and regulatory bodies emphasizing the need for companies to prioritize these issues as they directly impact decisions. It has led to the need for a structural new approach, which requires increased demand for transparency and accountability and forces an absolute and moral obligation for companies to demonstrate their commitment to sustainability and provide evidence and facts with validated data points.
Stakeholders demand evidence and proof. Companies and technology providers are starting to respond to this demand by adopting Enterprise Blockchain and using it to track and report on the ESG and sustainability efforts in their entire ecosystem (upstream and downstream), as just reporting is no longer enough. Enterprise Blockchain can provide a secure and transparent record of a company's actions, which makes it easier for stakeholders to verify and validate the company's ESG and sustainability claims.
In addition, Enterprise Blockchain and blockchain, in general, also empower social change by helping to create more efficient and effective systems for allocating resources. As mentioned, Enterprise Blockchain can track the movement of goods in a value/supply chain, which can help reduce waste, remove friction, and improve resource use efficiency.
Overall, the increasing focus on ESG and sustainability leads to digital acceleration and social change enabled by Enterprise Blockchain. We expect to see this trend increase in the coming years, primarily driven by upcoming and already existing legislation in multiple countries and regions.
Trend 4: Value Chain, Provenance, and Data Integrity Tracing via DLT becomes common
Over the last few years, Enterprise Blockchain has emerged as a powerful tool for tracking and verifying the movement of goods and information throughout a value chain. Using this technology, companies can create a secure and transparent record of the movement of goods, which can help improve efficiency and reduce the risk of fraud and errors.
Enterprise Blockchain is also being used to track the raw provenance of goods, which refers to the history and origins of a product. This is becoming increasingly important as consumers become more concerned about the environmental and social impact of the products they buy. Using technology to track the provenance of goods, companies can provide customers with more accurate transparency and assurance about the products they purchase.
Moreover, Enterprise Blockchain is being used to improve data integrity. Creating a secure and tamper-proof data record can help reduce the risk of errors and fraud and improve the accuracy and reliability of data.
Distributed Ledger Technology for value chains, provenances, and data integrity tracing is expected to become more common in the coming years.
Trend 5: Enterprise Blockchain is driving transformation by enabling Data Observability and Decision Intelligence
Blockchain technology helps to drive transformation by enabling the creation of trusted and verifiable data and insights. By using enterprise-grade blockchain solutions to track and verify data, organizations can have greater confidence in the accuracy and reliability of the data and insights they use to make decisions.
In addition, Enterprise Blockchain enables greater collaboration and information structurally sharing across organizations. Creating a shared, secure, and transparent record of data and transactions via data-sharing agreements makes it easier for organizations to work together within their ecosystems and across different ecosystems and share information in a transparent and trustworthy way.
It is worth noting that blockchain-based solutions do not turn facts into “the truth.” The persistent facts keep their original purpose, whether fraudulent or for good. However, by ensuring a signature from a responsible party when data is added, the liability can be easily traced back to the entity adding erroneous data. This approach favors the parties acting in the ecosystem’s interest and creates an immutable chain of evidence for the stakeholders.
These solutions are thus driving transformation by enabling in-depth data observability and further decision intelligence based on trusted and verifiable data and insights. It is expected to become a critical factor in the various data strategies and governance implementation.
Trend 6: Regulators are accelerating legislation and frameworks
Regulators on a global, regional, and local level are accelerating legislation and frameworks to protect stakeholders in the crypto landscape and structure and reinforce the benefits of Distributed Ledger Technology (DLT) that have already materialized in the enterprise and government space.
In recent years, enterprises and governments have increasingly adopted Enterprise Blockchain and DLT for various purposes and use cases, including tokenization, value and supply chain management, payment systems, public offerings, and the creation, tracking, and verification of data and assets. These applications have demonstrated the potential benefits of the technology, including increased transparency, security, immutability, finality, and efficiency.
As a result, regulators are taking steps to create a more favorable environment for further adoption by developing legislation and frameworks that support the use of the technology. These frameworks are designed to protect blockchain stakeholders (in general) and structure and reinforce the benefits of Enterprise Blockchain and DLT.
For example, regulatory bodies (public and sector federations) are creating guidelines and standards for different industries, such as finance and healthcare. These guidelines and standards can help ensure that the technology is safe, secure, and compliant with relevant regulations and protects the stakeholders.
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