How Industrialization Can Drive Blockchain Adoption Rate
Orbis Research holds the estimated value of the blockchain market will be $60.7 billion by 2024. Today's millennial innovators have nicknamed the blockchain the truth engine. Introduced in 2008 by Satoshi Nakamoto, the technology has grown into a disruptive platform for collating, storing and sharing crucial data across multiple nodes. The nodes are unique, decentralized (or for lack of an easier but lame term - distributed) and immutable (cannot be changed).
The rise of the blockchain has inspired the rise of businesses, enterprises and nascent forms of industries around the technology. Innovators around the world are also shaping the direction of blockchain by blending its applications with other emerging technologies like AI, Machine learning and the Internet-of-Things.
According to African Blockchain Report by Liquid Telecom, declining costs and rising capabilities in computer storage, bandwidth, computing are among key drivers of blockchain growth. Remember such factors are healthy for the connection and communication of multiple nodes across the network. I have read several publications affirming Africa is going to be the next frontier for blockchain and cryptocurrency adoption. I also believe this holds but a concern, an arching one exists too.
It turns out Africa's data collection, storage and sharing are highly inefficient. The supply chain here is also facing a rebirth through emerging technologies but for decades, it's been fragmented. A lot of issues surrounding transparency, democracy and political credibility, digital trust remain rooted in the heart of the continent. From the numbers, Africa should be the frontrunner in adopting blockchain technology.
However, it's easy to think such problems are only common in Africa. But no.
In “Challenges for Africa and Europe deeply interconnected”; Simon Coveney explains the challenge of building a sustainable and inclusive future against the backdrop of emerging technologies. Businesses across the globe are also struggling with the effects of the pandemic and shifting towards re-shoring their supply chains. Fortune estimates that it would cost world enterprises a total of $1 trillion to shift their supply chains away from China.
While it's easy to disagree on the context of problems in Africa; we should agree the continent still lags when it comes to industrializing. Industrialization drives everything, from progressive education to the adoption of emerging technologies. And this is why industrializing the continent is so important for the future of blockchain. The problem is most leaders and policymakers are only fixated on injecting the continent's GDP and using Foreign Investment in-flows to grow the continent.
There is a strong direct correlation between good infrastructure and efficient utilization of factors of production. Africa's policymakers know these and in countries like Nigeria, South Africa, Kenya and Ghana - the infrastructure is beyond average. However, the continent battles a big problem in its manufacturing industry.
And the main reason for lagging industrialization, according to Africa Renewal; is its failure to pursue bold economic development; in fear of hurting donor relations.
Kingsley Moghalu, the deputy governor of Nigeria's Central Bank professed in the Financial Times that Africa's development agenda does not favour industrialization but resource extraction industries and modern shopping malls. All of which are characteristic of post-industrial societies rather than developing nations.
The secret to working around this problem is policymakers admitting their shortcomings and creating enabling markets that are inclined towards the interest of societies.
The working arguments are that Industrialization should drive financial services. An industrialized nation is a financially liberalized nation and to me, industrialization must come first. But the situation in Africa spells otherwise due to the crumbling manufacturing and production industry.
For example, publications will say fintech and blockchain adoption is soaring in Africa. Forgetting this adoption is evident only in a few countries on the continent ; (Kenya, Nigeria, Ghana, South Africa, Rwanda, Egypt) -; forgetting that the blockchain adoption rate in China is 87%.
Dirk Kotze, an enterprise solutions expert at Deloitte emphasizes; Africa has levels of innovation and entrepreneurship needed to harness the power of the blockchain. This is true, looking at the kind of startups and innovations that have cropped up around emerging technologies.
I feel blockchain proponents interested in Africa should as well consider the material impacts of industrialization in driving blockchain adoption.