Research carried out at NUI Galway has found a 40% blockchain adoption rate among Irish enterprises to date. The study investigated why implementation in Ireland is relatively low, and proposes recommendations to increase blockchain awareness and adoption that can provide opportunities not only for economic growth but also create a new foundation for how Irish organisations and government conduct business.
Blockchain is considered to be a primary IT innovation of this decade that has the potential to disrupt and reshape a number of industries. Blockchain in its simplest form is a shared database system which allows users in a peer-to-peer network to verify and store records, representing a new way to access and trust data communicated over the internet.
The study was led by Dr Trevor Clohessy and Dr Thomas Acton from the J.E. Cairnes School of Business and Economics at NUI Galway in association with the Blockchain Association of Ireland. The research focused on Ireland given its classification as a developed country in the EU, being a sovereign state with a highly developed economy and advanced IT infrastructure. Ireland is ranked in 13th place in the Bloomberg technological innovation index for 2018, which scores countries using seven criteria, including research and development spending, concentration of high-tech public companies and patent activity.
The study looked at key organisational factors that influence blockchain adoption in Irish companies. Interviews were carried out with 20 organisations in Ireland, divided over different sectors such as financial, IT, education, fishing, gaming, legal, marketing and mobile app development and data was collected from representatives within these organisations in different management backgrounds that included IT, company owners, researchers and directors.
Support from top management and organisational readiness were identified as key enablers for blockchain adoption. While legislative uncertainty, a lack of business cases and a lack of in-house expertise, were cited as the main reasons by decision makers for not adopting blockchain, and its association with initial coin offerings and digital currencies, such as cryptocurrencies, which were perceived negatively.
The study revealed three patterns pertaining to the adoption of blockchain in Ireland:
- Top management support positively influences blockchain adoption
- Large enterprises are more likely to adopt blockchain than SMEs due to budget and available resources
- Organisational readiness is an ‘enabler’ for blockchain adoption – employees with the requisite blockchain IT knowledge and skills
Of the 20 companies interviewed, eight had adopted blockchain and 12 had not, or did not intend to adopt blockchain in the next two years. In terms of blockchain awareness, five out of 20 representatives had a basic level of blockchain awareness, six had a medium level and only nine were able to demonstrate a high level of awareness.
Speaking about the study, Dr Trevor Clohessy at NUI Galway, said: “Most blockchain developments are taking place within a small network of larger organisations, typically in the fintech and information technology sectors. Where it is used, it aims to enhance the speed and transparency of transactions along complex supply chains, while reducing costs. It is also used to optimise back and middle business processes and transactions, augmenting security, reporting and regulatory and compliance profiles.
“One of the benefits of blockchain is that once transactional data has been entered into the digital ledger it is immutable, which means it is not possible to either amend or remove data entered, ensuring the integrity of all transactional records. And its shared ownership makes it less vulnerable to cyberattack. Beyond business, other beneficial uses of this technology would be in voting machines and ballot boxes to address electoral fraud and potentially looking at a blockchain enabled technology-controlled border identification system that could provide a possible solution to the current North/South Brexit border challenges.”
The key findings from the study demonstrate that blockchain is not confined to financial technology and financial sectors, and welcomes further government action and strategic policy to promote blockchain more broadly to encourage universal engagement, such as the roll-out of a national, government-backed blockchain initiative like other developed countries.
The J.E. Cairnes School of Business and Economics at NUI Galway is currently exploring various possibilities to address the gap in the lack of third level blockchain courses, such as creating executive blockchain workshops. Dr Clohessy has also introduced blockchain as a module for students within the modules for MSc Business Analytics and MSc Information Systems Management.
To read the full study, visit: http://novoverse.nuigalway.ie/nui-galway-report-sheds-light-on-irish-blockchain-organisational-readiness/