Analysts have revised down their forecasts for European enterprise spending on blockchain development in the next few years due to the economic aftershocks of the COVID-19 pandemic.
In a report published on May 5, United States-based market research firm International Data Corporation (IDC) said it expects the slowdown to be temporary and unevenly distributed across sectors.
Prior to the crisis, IDC had forecast that European blockchain spending would be $1.4 billion in 2020, with strong growth of 58% compound annual growth rate (CAGR) to 2023.
Carla La Croce, co-lead of IDC European Blockchain Practice, explained that:
With depressed customer demand, disrupted supply chains, and widespread remote working, many companies are putting on hold innovative projects, including in blockchain, until there is more clarity about the future.
The IDC now expects there to be a slight slowdown in blockchain spending, down roughly 8% in 2020 in the European market. Its revised forecast of $1.33 billion nonetheless represents more than 60% year-on-year growth.
Post-pandemic, certain sectors could see increased blockchain adoption
In specific sectors, the IDC anticipates that the impact of the pandemic could, conversely, spur growth and wider adoption of the technology.
National governments’ imposition of stringent lockdowns during the crisis continues to cause widespread disruptions to production, distribution and global trade. This exposure of the fragility of many supply chains may drive enterprises to adopt new technologies that can make their supply management more resilient.
As Radoslav Dragov, co-lead of IDC European Blockchain Practice, has outlined, blockchain can mitigate the “needless opacity” that persists in most value chains:
It provides transparency and breaks down data silos while guaranteeing strong security and a single source of truth.
Complex applications such as the collection and analysis of healthcare data and online voting systems could also see unique benefits from blockchain, as the technology offers strong data protection and privacy features and is resilient to tampering.
Applications such as e-voting will nonetheless require significant efforts to overcome the public’s apparent lack of trust in using online systems to exercise their democratic rights, the IDC concedes.
WEF and IDC both see blockchain as a key tool for global value chains
Last month, the World Economic Forum published a new blockchain deployment toolkit designed to help governments, enterprises and organizations worldwide to develop more resilient value chains going forward after the COVID-19 crisis.
Cointelegraph interviewed the co-author of the toolkit, Nadia Hewett, about the technology’s potential to help with the post-pandemic global economic recovery through innovative digitization of trade.