Analysts forecast the decline in spending by European companies for the development of blockchain in the coming years due to the economic impact of the COVID-19 pandemic.
In a report released on May 5, the US-based research firm International Data Corporation (IDC) expects the slowdown to be temporary and uneven across sectors.
Before the crisis IDC had forecast that European blockchain spending in 2020 would be $ 1.4 billionwith strong growth in average annual growth rate (CAGR) of 58% by 2023.
Carla La Croce, Co-Head of IDC European Blockchain Practice, said the following:
Given declining customer demand, disrupted supply chains and widespread remote working, many companies are putting off innovative projects, including blockchain, until more clarity about the future arises.
The IDC now expects a slight slowdown in blockchain spending, around 8% in 2020 in the European market. However, the revised forecast of $ 1.33 billion represents growth of more than 60% over the previous year.
After the pandemic, blockchain applications were increasingly introduced in certain sectors
In certain sectors, IDC believes that the effects of the pandemic could on the contrary stimulate the growth and wider acceptance of the technology.
The imposition of strict blockages by national governments during the crisis continues to widespread disruption in global production, distribution and trade. This exposure to the fragility of many supply chains can prompt companies to adopt new technologies that can make their delivery management more resilient.
As Radoslav Dragov, Co-Head of IDC European Blockchain Practice, described how blockchain can reduce the “unnecessary opacity” that exists in most value chains:
It provides transparency and breaks data silos while ensuring robust security and a single security source.
Complex applications such as the collection and analysis of health data and online voting systems could also offer unique advantages for the blockchainThe technology offers strong data protection and data protection features and is tamper-proof.
However, requests such as electronic voting require significant efforts to overcome the apparent lack of public confidence in using online systems to exercise their democratic rights, IDC admits.
WEF and IDC see blockchain as a key instrument for global value chains
Last month, the World Economic Forum released a number of new blockchain implementation tools that governments, businesses, and organizations around the world can use to develop more resilient value chains after the COVID 19 crisis.
Cointelegraph asked the co-author of the toolkit, Nadia Hewett, about the potential of the technology to contribute to the recovery of the global economy after the pandemic through the innovative digitalization of trade.