Irving Wladawsky-Berger

How Can Blockchain Become a Truly Transformative Technology?

I first became interested in blockchain technologies when in 2016 the World Economic Forum (WEF) named The Blockchain in its annual list of Top Ten Emerging Technologies citing its potential to fundamentally change the way markets and governments work. The WEF noted that “Like the Internet, the blockchain is an open, global infrastructure upon which other technologies and applications can be built. And like the Internet, it allows people to bypass traditional intermediaries in their dealings with each other, thereby lowering or even eliminating transaction costs.”

The blockchain first came to light in 2008 as the architecture underpinning bitcoin, the best known and most widely held digital currency. The blockchain’s original vision was limited to enabling bitcoin users to transact directly with each other with no need for a bank or government agency to certify the validity of the transactions. But, like the Internet, electricity and other transformative technologies, blockchain has transcended its original objectives. Over the years, blockchains, - and the more encompassing distributed ledger technologies (DLT), - have developed a following of their own as distributed data base architectures with the ability to handle trust-less transactions where no parties need to know nor trust each other for transactions to complete.

Could blockchain/DLT become truly transformative technologies? And if so, what will it take?

New Directions for Government in the Digital Age

Over the past few decades, economies and societies around the world have been going through historical transformations as they transition from the industrial age of the past two centuries to a 21st century digital age. Companies - especially large, global corporations - have leveraged digital innovations to improve their productivity and competitiveness and adapt better to these powerful technology and market changes.

In 2010, the Technology CEO Council released a report recommending that governments embrace the information technologies (IT) and organizational best practices that the private sector was successfully applying: “By harnessing major technological shifts and adopting best business practices, we can not only make our government far more productive, but also foster greater innovation in areas ranging from healthcare to education and energy - innovation that will generate economic growth and job creation.”

But governments have continued to lag the private sector, and risk falling further behind as the pandemic accelerated the digital transformations that are helping companies cope with the crisis. “We’ve seen two years’  worth of digital transformation in two months,” as companies adapt to stay open for business “in a world of remote everything,” said Microsoft CEO Satya Nadella in April 2020. A month later, McKinsey & Company added, “We have vaulted five years forward in consumer and business digital adoption in a matter of around eight weeks.”

The authors of a recently published report, “New Directions for Government in the Second Era of the Digital Age,” argue that governments should exploit this fast-moving era of technology in their own operations, for the overall benefit of their nations. The 120-page report was authored by Don Tapscott, Kirsten Sandberg, and Anthony Williams from the Blockchain Research Institute (BRI), in collaboration with the Chamber of Digital Commerce and experts from several countries. The BRI is a global think tank dedicated to the strategic implications of blockchain and related technologies to business, government and society. I am a research contributor at the BRI.

The report aims to assist government leaders around the world, but is particularly focused on the opportunities and challenges facing the new US administration.

AI Is Mostly About Business Value, Not Technology

A few months ago, Babson College professor Tom Davenport convened a virtual meeting of chief data and analytic officers (CDAO) from a variety of industries to discuss how to best achieve a return on investments (ROI) in AI. “We wanted to learn to what degree these senior leaders shared our perspective that AI faces an important economic return issue, and what, if anything, their companies were doing to address it.”  Many participants said that a decent ROI remains a critical issue for AI projects.

Davenport has long been analyzing how companies should build up their AI capabilities to achieve their business objectives.  For example, in a 2018 Harvard Business Review article he co-authored, Davenport advised companies to build their AI capabilities through the lens of business opportunities, rather than technology.  As has been generally the case with new technologies, highly ambitious, multi-year moon shot projects are less likely to be successful than low-hanging-fruit projects.  Business process automation is one of the least expensive and easiest capability to implement, since companies have long been engaged with enhancing and automating their business processes.

The following year, Davenport talked about the state of AI in the enterprise at the annual conference of MIT’s Initiative on the Digital Economy  His talk was based on recent surveys by Deloitte of executives in US-based companies who were involved in AI projects.  The surveys found that 20-30% of enterprises were early adopters, having implemented at least one AI prototype or production application; most of the projects were in pilots with relatively few already in production; simple projects prevailed over more ambitious and complex ones; and implementation, integration, data issues and talent topped the list of challenges faced by these early adopters.

Ten IT Predictions for the Post-Pandemic New Normal

“Spurred on by the world reaction to the disruptions caused by the global pandemic in 2020, the global economy remains on its way to its digital destiny, as most products and services are based on a digital delivery model or require digital augmentation to remain competitive,” said a recently published IDC study on the key trends that will shape the IT industry over the next five years.

IDC’s overriding conclusion is that the Covid-19 pandemic will significantly accelerate the digitalization of the global economy  “The majority, 65%, of global GDP will be digitalized by 2022, driving $6.8 trillion of IT spending from 2020 to 2023.”

The study highlights ten predictions that will drive the IT industry in the post-pandemic new normal, including the challenges faced by CIOs and IT professional as they manage the implications to their institutions over the next five years.  Let me summarize IDC’s top ten predictions.