Be Ready to Get Your Share in USD 9.2 Billion Blockchain Pie
USD 945 million was spent on blockchain solutions in 2017 and the spending is expected to grow on a robust rate, reaching USD 9.2 billion in total by 2021, according to the Worldwide Semiannual Blockchain Spending Guide, published by the International Data Corporation (IDC), a market intelligence firm.
From a technology perspective, IT services and business services (combined) will account for roughly 75% of all blockchain spending, the firm said in its press release.
“Interest and investment in blockchain and distributed ledger technology (DLT) is accelerating [...] multiple regulators and central banks have made positive comments about blockchain and DLT and this will help to accelerate demand in regulated industries such as financial services and healthcare,” the press release quotes Bill Fearnley, Jr., research director of Worldwide Blockchain Strategies at IDC.
The United States will see the largest blockchain investments and deliver more than 40% of worldwide spending throughout the forecast, according to the report. Western Europe will be the next largest region for blockchain spending, followed by China and Asia/Pacific (excluding Japan and China), it added.
The US gears their investments towards the distribution and services sector, while Western Europe, China and Asia-Pacific look more towards the financial services sector.
Still, the report warns that blockchain may not be a solution for everyone. Blockchain-based solutions are primarily for solving real-world problems in industries with inefficient, manual processes.
Jessica Goepfert, program director at Customer Insights and Analysis at IDC: “[...]
“We are seeing initial blockchain spending to transform existing highly manual and inefficient processes such as cross-border payments, provenance and post transaction settlements. These are areas of existing pain for many firms, and thus blockchain presents an attractive value proposition.”
The IDC report predicts large investments in blockchain technology to be primarily made in the financial services sector, manufacturing industry and IT services in the future.
- Blockchain spending will be led by the financial sector (USD 754 million in 2018), driven largely by rapid adoption in the banking industry.
- The distribution and services sector (USD 510 million in 2018) will see strong investments from the retail and professional services industries while the manufacturing and resources sector (USD 448 million in 2018) will be driven by the discrete and process manufacturing industries.
- The industries that will see the fastest growth in blockchain spending will be professional services, discrete manufacturing, and the resource industries.
- In the distribution and services sector and the manufacturing and resources sectors, the leading use cases include asset/goods management and lot lineage/provenance.
- Cross-border payments & settlements will be the use case that sees the largest spending in 2018 (USD 242 million), followed by lot/lineage provenance (USD 202 million) and trade finance & post-trade/transaction settlements (USD 199 million). These three use cases will remain the largest in terms of overall spending in 2021 as well.