Survey: China’s Traditional Industries are More Optimistic about Blockchain than New Tech Sectors

The Enterprise Ethereum Alliance aims to develop a standard for a distributed ledger to speed up transactions while increasing privacy (Image peshkov / iStockPhoto)

If you think new tech industries are more upbeat about blockchain, the recently released results of a PwC-VeChain joint survey indicate otherwise.

The survey received more than 130 questionnaires while two focus group discussions with more than 40 respondents were held at end-2017, according to PwC. Respondents were from nearly 20 industries, involving more than 10 functional departments, the firm said.

Respondents from traditional industries including retail, education and science formed the highest percentage of participants who recorded seeing a “significant impact” from, and remaining optimistic about blockchain, according to the 2018 Mark Market Survey Report for (Non-financial) Application of Blockchain in China.

These were followed by the manufacturing industry, service industry, IT or high-tech industry and media, results indicate. 

Logistics is viewed as the industry most intrinsically predisposed to utilising blockchain outside of finance, and ranks highest in terms of scope for innovative applications of the technology that create value, said PwC.

Government follows as the second most suitable arena for putting the technology to use, notably offering clear means for demonstrating use, and influencing aspects such as credit enhancement, the firm added.

Medical industries ranked third, due to their especially rigorous demand for verifying authenticity of information, PwC noted, adding that the need for authenticity verification relating to personal and medical records as well as drug information is anticipated to continue driving the application of blockchain across health industries. 

“Blockchain’s tamper-resistant and distributed data storage features enable us to improve traceability and transparency for logistics and supply chain management. These characteristics will be put to use in optimising business transactions and trade relations,” said Sunny Lu, CEO of VeChain, who went on to note, “With people’s increasing awareness and knowledge of blockchain, ‘killer’ applications are sure to emerge, and initially these are most likely to occur outside of the financial sector.” 

Major applications

Among respondents who have already implemented blockchain, half of them use it for security traceability, while other fields of application that saw more than 20% of respondents using blockchain included distributed data storage, identity authentication, shared data & application and supply chain management, PwC said. 

In addiiton, 53.3% of these respondents who have already implemented the technology have also set up in-house blockchain R&D teams, PwC noted.

This was more popular than the three alternative approaches of cooperating with blockchain start-ups (30.0%), cooperating with well-known companies (13.3%) and investing in or acquiring external blockchain start-ups (3.3%), the firm added. 

“When it comes to technologies that impact the underlying architecture of the business model, an enterprise usually prefers to build a R&D team of its own,” PwC China Partner Chun Yin Cheung said. “An in-house R&D team can facilitate system maintenance and information security while reducing costs. At the same time, many enterprises prefer to keep the underlying architecture of the business model under their control.” 

Management decisions matter

Survey findings also reveal that management decisions have the greatest impact on implementation of blockchain for respondents, while input cost have the least influence.

Feedback from respondents that had not applied blockchain indicated that the biggest challenges to their application rested with management having not yet decided to pursue use of the technology, PwC said.

This was followed by lack of corresponding industry standards while only 10% of respondents indicated ‘no budget’ to be the major reason why their companies had not yet adopted blockchain, the firm added. 

Although concerns from various industries differ, standard policy is recognised by respondents from all fields as the most pressing challenge standing in the way of continued development of blockchain technology, Cheung noted. 

Other highlights of the survey

  • 85.7% of respondents stated a core feature of blockchain is that the technology is “tamper-resistant”
  • More than half of respondents believe that blockchain will have a significant impact on the business community
  • 48.4% of respondents who have a “basic understanding” hold an optimistic attitude.
  • 84.2% of respondents who are “working in the industry” also have an optimistic attitude.
  • 85.7% of respondents “with experience of applying blockchain technology” are optimistic about the technology