Perhaps the most exciting aspect of blockchain is its versatility. While digital assets are at the forefront of DLT’s popularity (distributed ledger technology), the underlying mechanisms truly make them special. And it is those same underlying mechanisms that promise to revolutionise every aspect of society and industry, particularly when it comes to SMEs (small and medium enterprises).
SMEs make up a large portion of most economies, and for OECD countries, they also account for 60% - 70% of all new jobs. They can provide very healthy competition for larger companies, driving prices of products down, and contributing to the social and economic fabric of their communities.
Their smaller size means that they can often be more flexible and more likely to drive innovation than their larger counterparts, but it can also be a barrier to growth - many SMEs struggle to access the finance they need to expand their business, and more prominent companies can often offer more appealing salaries and benefits. Moreover, SMEs just don’t have access to the same tools and practices that larger companies do. In short, it’s difficult for an SME to break into the larger playing field, and they’re consistently at risk of being left behind.
That leads us to enterprise blockchain, which offers innumerable benefits over traditional corporate governance systems. In fact, it is easier to think of it as an entirely new paradigm for companies and institutions - while the underlying principles are similar, all aspects are optimised and transformed to the point where this new system is more efficient, safer, and more transparent by orders of magnitude.
We thought it would be worthwhile to look at how enterprise blockchain has been growing and how it is already helping SMEs grow faster and stay ahead of the competition.
Enterprise Blockchain & Global Adoption
The 2nd Global Enterprise Blockchain Benchmarking Study - a study that looked at 160 startups, established companies, central banks, and other public sector institutions from 49 different countries - found that two-thirds of polled companies are either satisfied or very satisfied with implementing enterprise blockchain, with the majority of the last third simply stating that it’s too early to assess.
From the report:
Nevertheless, half-hearted experiments and short-lived PoCs [Proof of Concept] have given way to more serious initiatives that involve well-specified implementation roadmaps and benefit from long-term executive commitment.
This development is reflected in the projected budgeting of surveyed network operators [referring to operators of business and blockchain networks] and participants: only 4% indicated to moderately cut the budget allocated to their blockchain activities, whereas more than half planned to significantly raise the blockchain budget in the medium term to extend operations.
This observation mirrors the sentiment of company executives in a recent Deloitte survey that found that the majority of organisations were planning to allocate a substantial amount to their blockchain strategy.
In fact, enterprise blockchain is already used by some of the biggest companies in the world - J.P. Morgan, Goldman Sachs, RBC Royal Bank, and Santander have blockchain-based systems underway, and Volkswagen uses one for digital contracts.
Additional uses have been adopted by companies like GSK and Bristoll-Myers Squibb, who are using the technology to validate product authenticity between factories, sellers, and pharmacies. Companies like Kellogg’s and Target use blockchain technology to manage their farm-to-consumer supply chain network, and Hapag-Lloyd and UPS are using similar implementations for monitoring international trade. For a similar use case, see Digital Sandwich in our ‘Quick Look’ section below.
That is a wide spectrum of industries, and they have all found numerous benefits in investing in the construction of an enterprise blockchain system. Blockchain helps these companies distribute and exchange information in real-time, facilitating their growth.
But those same benefits can prop up smaller businesses, too.
How Startups and SMEs can Benefit from Enterprise Blockchain
Decentralisation - We recently covered decentralisation in "A Crash Course in Decentralised Systems, Distributed Ledger Technology, and Blockchain" , but it’s essentially one of the core principles behind blockchain. Information is spread out to all (or most, if including every participant is not appropriate) participating computer or server. "A Crash Course in Decentralised Systems, Distributed Ledger Technology, and Blockchain" article
This does two very important things:
It secures a system against failure or hacking. If one single device is hacked, the whole network does not go down.
Information is secure for internal use. To change something within the system in bad faith, you have to change that same thing for each other device on the network, which is very difficult, if nigh impossible.
The decentralisation of enterprise blockchain is beneficial to small and medium enterprises (SMEs) for a number of reasons.
First, SMEs are often at a disadvantage when competing against larger businesses because they lack the resources and economies of scale that their larger counterparts enjoy. By decentralising the enterprise blockchain, SMEs can level the playing field and gain access to the same technologies and resources that larger businesses have.
Immutability - As in, not mutable. Immutability is compliance by design. By making sure no information that has been made part of the blockchain is deleted, every single action taken by each participating member is traceable, provable, and analysable.
This can greatly benefit startups and SMEs in building trust and credibility with their customers and partners. Because enterprise blockchain is a distributed and transparent technology, it allows smaller businesses to show their partners and customers that they are committed to transparency and openness, both essential for any business and especially for SMEs.
Cost Saving - The most obvious benefit of implementing enterprise blockchain technology is its potential to significantly cut costs. Whether it is the cost of maintaining centralised systems, paper documents, spending time and energy on KYC (Know Your Customer) processes, or simply the wider margin of error possible without a decentralised system, EB can help with these and more.
With enterprise blockchain, SMEs can save on the costs of developing and maintaining their own blockchain infrastructure. This can free up valuable resources that can be used to invest in other areas of the business, such as marketing or product development.
Additionally, performing fewer transactions overall and in real time can also bring a company’s efficiency to market-leading levels.
Financing, Regulation, Trust - Implementing blockchain technology opens up a wider range of possibilities than ever before. SMEs can now seek new financing opportunities from banking institutions and other third-party financial institutions. Even better, they can keep the entire process on the blockchain, fostering digital trust between all parties involved.
Companies can gain access to similar benefits when it comes to regulatory requirements. As long as said regulatory bodies are open to it, SMEs can prove compliance without the shadow of a doubt and therefore move through this often cumbersome process faster and with more confidence.
A lot of this is made possible through what’s known as digital identities. Digital identities are not unlike personal identities. Just like how ID cards carry necessary personal information and can be used to interact with different institutions, so too can digital identity allow companies to interface with other organisations.
Of course, this would require a similar framework to be developed by other companies and government institutions, but the private sector doesn’t need to wait - it can move the goalpost closer.
This can offer immense benefits, such as easier registration for different functions and utilities, more trustworthy recognition across a supply chain or when interacting with banking institutions, improved adherence to KYC (know-your-customer) requirements, and a lot more.
NFTs - Yes, NFTs. While they may be most popular as a new tradable asset class, NFTs can offer some unique advantages for SMEs.
The primary purposes of Enterprise Non-Fungible Tokens (ENFTs) are to track, authenticate, and validate each asset during its lifecycle. Unlike NFTs, these are designed to address issues in manufacturing, supply chains, and a number of other industries, primarily used for the tracking of commodities, services, and assets. They are most useful in complex environments where a large pool of different businesses and customers all interact with each other at the same time, making these intricate processes more efficient and transparent.
This can be accomplished via a public blockchain, such as Bitcoin, or a semi-private blockchain, like the ones possible on Corda.
Another use for ENFTs is as a promotional tool to help SMEs raise awareness and create buzz for their products or services.
ЕNFTs can help SMEs monetise their products or services in an entirely new way by using this technology to create a new community or following around their products or services, which can potentially even include loyalty programs or charities.
In short, enterprise blockchain services are beneficial to SMEs because it levels the playing field, builds trust and credibility, and saves costs. And that is the type of value that businesses can seldom find in a single package.
A Quick Look at Several INDUSTRIA Case Studies
We not only believe in the limitless potential of enterprise blockchain but actively work on helping startups and SMEs develop theirs. Below are a few selected and diverse examples of how we’ve helped businesses benefit from adopting the technology.
Rebalance Earth - Rebalance Earth offers an incredibly unique model. A wide variety of sensors and tests showing a forest elephant - a keystone species - is still alive and well in its natural habitat, lead a blockchain network to mint tokens. These tokens are then sold to interested parties. The funds are used to reinforce the local community, pay rangers, and much more.
The intent is to offset climate change, revert biodiversity loss, and lift local communities above the poverty line. It is an incredibly clever and ambitious implementation of enterprise blockchain technology, without which this model simply couldn’t work.
In the future, Rebalance Earth is looking to expand its model to include more keystone species and extend to other countries.
Digital Sandwich - Another excellent, forward-thinking implementation, Digital Sandwich is the brainchild of Raynors Foods, one of the UK’s leading sandwich manufacturers. The pitch is simple but powerful. Every single ingredient - from farm to finished product - lives on the blockchain. This makes everything from managing production to analysing areas of improvement to tracing back and recalling items available in real-time.
Blockchain makes this level of efficiency possible for companies of any size. For now, the Digital Sandwich network is only used for Raynors Foods’ own food production and distributors, but they are open to including more companies and farms down the road.
KnowRisk - An open-source distributed ledger risk management network that uses smart contracts to automate, audit, and validate commercial transactions, rights, and obligations for the supply chain industry.
If that sounds a bit complex, that is because it is - today’s supply chain networks are immense and endlessly complicated, and even though they work, there is a huge margin for error and financial risk involved at almost every step.
By making use of blockchain’s immutability and providing open-source access to the network, KnowRisk is not only mitigating risk but opening the possibility for a new generation of much more efficient supply chain processes.
Power Registry - In keeping with all these great projects, Power Registry is a marketplace for trading carbon offset certificates. The current renewable energy industry is both expensive and slow - about 15% of a given certificate’s value is spent on auditing and verification, with the average time from generation to final settlement averaging around 95 days.
What Power Registry does is consolidate the disparate institutions onto a single network and significantly streamline the entire process while also reducing both time spent and the various costs associated with it.
Once again, this level of efficiency and rapid implementation is only possible through blockchain.
Developing Enterprise Blockchain on R3’s Corda
Corda is the industry leader in enterprise blockchain technology. A product of the American blockchain company R3 and a long-standing INDUSTRIA partner with which we’re currently opening one of the largest blockchain R&D hubs in Bulgaria, Corda offers startups and SMEs significant benefits.
First, developing on Corda is fairly simple - the platform can work with easier-to-use languages like Kotlin and Python. Second, companies can gain access to the Corda Network. This distributed ledger platform enables businesses to transact directly and securely with each other with the support of a secure internet layer of trusted nodes.
Corda is also suitable for startups as it is particularly suitable for regulated markets where the need for trust between parties is a necessary and mandatory condition for the transaction to take place. Even better, this entire process is customisable, so confidential information isn’t shared with anyone who doesn’t need access to it, making for a flexible system that is tailor-made for each individual use case.
Finally, Corda is endlessly scalable, so companies are at no risk of outgrowing the tools they use - the Corda platform can grow with them.
In this article, we’ve shown that blockchain offers innumerable benefits for businesses of all sizes, but particularly for newer or smaller businesses where a single decision can make or break a company.
Enterprise blockchain offers a once-in-a-lifetime opportunity to level the playing field, gain access to cutting-edge technologies, and benefit from the same tools that bigger companies use. Moreover, a smaller and more efficient company can find it significantly easier to implement enterprise blockchain solutions due to their leaner workforce.
It is safe to assume that in the near future, when enterprise blockchain becomes more popular and companies have already established and refined their own enterprise blockchain systems, not using one would mean that a company is at risk of not being competitive.
Combined with the fact that the technology behind enterprise blockchain is becoming more readily available, it is not unreasonable to posit that the next generation of organisations is coming, and it is likely to come very soon.
INDUSTRIA is a global technology consulting, development, and ventures company with expertise in the field of enterprise blockchain, confidential computing, process automation, and digital experience. As one of the official partners of R3, we are implementing cutting-edge blockchain technologies and reshaping the fintech world.
At INDUSTRIA, we are focused on providing permissioned blockchain solutions, such as Central Bank Digital Currencies, Electronic Bill of Lading, and Smart Legal Contracts. Our solutions apply to a wide range of industries and use cases to empower and modernise society.
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