Deloitte survey finds blockchain vital, overhyped

Executives are seeing more business cases, but asking more questions

While business executives around the world are growing more certain that blockchain will be a game changer, a new survey also reveals that skepticism remains. According to Deloitte, it’s 2019 Global Blockchain Survey finds the technology is entering a new phase, in which the question is no longer, “Will blockchain work?” but, “How can we make blockchain work for us?”

Taken as a whole, Deloitte believes the responses show blockchain “is maturing in the eyes of many executives and decision-makers who are increasingly seeing the technology’s real promise,” the report states. “But not everyone is fully on board … the questions executives are asking are tougher, more granular, more grounded, and more pragmatic.” 

Most notably, the number of respondents who feel that blockchain will be so critical to their organizations that it will be in their top five strategic priorities broke the halfway mark, jumping to 53% this year, up 10 points from 2018. Beyond that, 86% believe the technology is “broadly scalable and will eventually achieve mainstream adoption,” up 2% from 2018. 

Yet fully half that number say they believe “blockchain is overhyped,” growing to 43% this year from 39% last year. 

In terms of specific uses, more than four out of five (83%) say their executive team believes there is a “compelling business case for blockchain,” and three quarters (77%) say they will lose a competitive advantage by failing to adopt blockchain.

Yet less than one quarter of the respondents (23%) have already begun deploying blockchain technology—down from 34% last year. And, the number who believe blockchain will disrupt their industry decreased 3% in 2019, to 56%.

Still, these results may not be as contradictory as they seem, Deloitte added, noting that “[t]he dissonance could reflect a growing pragmatism… as the [technology’s health] evolves into a more grounded business solution.”

While that shows a growing sense that “the technology seems ready for prime time,” it also means harder questions are being asked, and harder-nosed answers are demanded.

Over all, nearly half (47%) of the survey’s respondents want to see a measurable return on their investment in less than three years, while 14% wants to see it in one year. About one third (30%) believe it will take three to five years. 

The same contradictions can be seen in the attitude of Chinese respondents, who made up 200 of the 1,386 senior executives polled. While they were far and away the most likely to call blockchain a top-five strategic priority—with 73% calling it that, compared to 56% of American respondents—less than half (47%) said they believed blockchain is scalable and will achieve mainstream adoption. Just 37% said their executive team believes blockchain has a compelling business case. 

Compare the latter two numbers to the American responses, where 61% called it scalable and able to go mainstream, and 57% said their executive team believes there is a compelling business case.

One way to read this is that in China, “[m]ore projects are driven by top management who use blockchain as a strategic weapon rather than a productivity tool,” said Paul Sin, the leader of Deloitte’s Asia-Pacific blockchain lab.

“The blockchain story is beginning a new chapter, one in which the questions executives are asking are tougher, more granular, more grounded, and more pragmatic,” Deloitte concluded. “They are questions that show an emerging awareness that the technology seems ready for prime time.”

The study’s respondents came from companies in a dozen countries: Brazil, Canada, China, Germany, Hong Kong, Israel, Luxembourg, Singapore, Switzerland, United Arab Emirates, United Kingdom, and the United States. American companies had revenues starting at $500 million and ranging up to more than $10 billion, while the rest started at $100 million. The survey took place between February 8 and March 4, 2019. More than half came from IT departments.

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Leo Jakobson, Modern Consensus editor-in-chief, is a New York-based journalist who has traveled the world writing about incentive travel. He has also covered consumer and employee engagement, small business, the East Coast side of the Internet boom and bust, and New York City crime, nightlife, and politics. Disclosure: Jakobson has put some 401k money into Grayscale Bitcoin Trust.