Background:
Blockchain
is one of the most discussed and trending technological terms these days. It
has potential to create some serious disruption across industries in the coming
years. The ways things are shaping up, plethora of activities are likely to take
place globally. Though technology seems to be relatively passive in India, it
will not take long before it gains popularity. There are many startups trying
to be a part of the bandwagon. There is slowness in the Indian startup space primarily
due to low confidence in technology and adoption of the concept.
There
is news trickling in about adoption of blockchain technology. IBM and Mahindra
have collaborated to create a blockchain solution for Supply Chain Finance, ICICI
is learnt to have adopted blockchain technology in the digital banking space
and consortium of leading banks working on banking solution through blockchain
are the developments currently being talked about. It is only matter of time
that blockchain is adopted across industries, as increasing numbers of
corporates and businesses are opening up to the importance of data security and
validity. In public sector, there is hardly anything of substance achieved or done
so far. Government of Andhra Pradesh is trying to use blockchain. The way it is
going ahead, it is expected to use it in a big way and lead the nation in
adoption of blockchain in public sector. Though India is considered to leader
in ICT but as a nation we are not very good at R&D. Even adoption of new
technology is a slow process here. It is high time we take a lead and create
awareness in all quarters to go for this safe and progressive technology.
What is the way forward?
1. Policy Makers:
Role of policy makers is also very important in the formative period of any
technology. Policy makers have a powerful incentive to embrace digitisation.
Its use brings the challenge of integrity and usage of data. Integration of
data is the in thing and synergy is giving unexpected benefits and throwing
many challenges in the field. Blockchain will bring in confidence in data
stored in different warehouses and policy formulation dependent on the same.
a.
Governments will have to adopt policies to encourage investment.
More investments are needed to promote any new technology. It is not
forthcoming due to risks inherent to such ventures
b. Through
tax benefits and other incentives, policy makers can encourage companies to
invest in human capital. A broad range of incentives exists for businesses to
invest in R&D or otherwise develop their capital. Something similar is
needed to encourage investment in human capital. Policy makers could accelerate
the creation of jobs in general through stimulating investment, and accelerate
creation of digital jobs in particular.
c.
Create enabling eco system to encourage new forms of
entrepreneurship and more rapid new business formation. In a slowing down
economy digitally enabled opportunities for individuals to earn incomes must be
found. In addition, accelerating the rate of new business formation will be
critical. This will likely require simplifying regulations, creating tax and
other incentives.
2.
Business
leaders:
Apart from policy makers role of business leaders is also equally important. In
order to promote this technology business leaders with appetite to experiment are
needed. They need to acquire some book knowledge, learn about the experiments
done elsewhere, test in Indian settings, and experiment with new variants,
acquire further learning based on experimentation and further exposure and then
go for upscaling and replication. Business
models and business processes would require redesigning and reengineering
keeping in mind the known and expected digital disruptive technologies. Recent
malware and cyber-attacks and threat of loss demonstrated the value of Digital
assets. Now data base and software has become a very valuable asset and like to
figure prominently in the balance sheet. These assets and capabilities, both
hard and soft, are increasingly becoming a competitive differentiator and
platforms for innovation and disruption. Block chain offers a workable and good
technology to some extent overcome such threats and ensure safeguarding the
value of digital assets.
3. Skilling: Businesses
and governments are facing sever challenge of finding right people for the
right jobs. Desired skill sets are missing. Companies are likely to face gaps
in skills they need in a more technology-enabled workplace, and would benefit
from playing a more active role in education and training. Partial automation
is more likely than full automation in the near to mid-term, and humans and
machines will need to work together much more closely. That will require
retraining and often redeploying workers. Policy makers working with education
providers could do more to improve basic science, technology, engineering, and
math (STEM) skills through the skill development programs and later on through
the formal school systems, and put a new emphasis on creativity as well as critical
and systems thinking.
4.
Research and
Collaboration: Looking at existing research
centers for Blockchain technology, it is realised
that some counties have already taken lead and good work is already happening
in the field of research and application of blockchain. There is no doubt that
it might be very hard to nurture innovation in isolated environments built by
particular companies or government agencies, as sometimes principles of these
research centers might contradict with general priorities of the industry,
there might be hidden agenda, as well as certain rules and limitations,
which do not always facilitate development process. In the era of cooperative and collaborative growth, research efforts
across the world have to look at each other looking for solutions to general
problems. If it is done within one particular corporation or a state
institution, there are certain limitations; there are also certain rules, which
slow down the development. There is a need to create platforms to facilitate
collaboration within existing Blockchain consortiums, institutes, stakeholders
and research centers. There is no doubt that there is a huge space for
research and development around Blockchain technology and not only because we
don’t fully understand what this technology is about but also because the more
we learn, the more challenges we uncover.
The most efficient approach towards development
of Blockchain technology might be when research
and practical application go hand in hand and when practice summarizes
theory and vice versa.
5. Regulatory
Framework: Regulatory
framework is required to safeguard this sector. There will be mushroomed growth
of new players and cases of loss of credibility will go up. Further, this
technology will also need mechanism to handle disputes and mechanism for
adjudication. In order to make Blockchain technology successful in the country
India need to quickly establish standard business practices to attract
mainstream investors and business experts. It is felt that a mechanism for
regulatory oversight with positive frame of mind by delinking it to bitcoin is
needed. There
will be growth in service providers and so called service providers. There
would be cases of theft of data, misuse of data and abuse of digital power.
Society at large and business and government in particular will find it
challenging to keep pace with technological innovations and challenges it
throws in regulation and governance. It is the collective responsibility of everyone in general but
government in particular to change the perception of Blockchain and delink it with crypto-currency
and to legitimize this technology by creating ethical, moral and legal
platforms. India needs to promote a powerful Blockchain
ecosystem with a spirit of integrity. India needs passionate and talented
members who have collective goal to be successful. Approach to achieving this
goal is through a platform that creates the environment to incentivize the
contribution of ideas, conversion of those ideas into business plans, and
subsequent launch of profitable projects.
Blockchain
technology has huge potential. Enabling eco system will accelerate its adoption
in government and corporates. There is a need to create network of like-minded
people and facilitate meeting grounds for fast growth and adoption of this
technology.
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[1] By
Ajay S Singh is an ICAS officer and currently working with Ministry of Rural
Development, Government of India and Richa Singh, Public Sector Banker. Views
are personal.
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