In this BLOCK article, SiGMA’s Content Research Lead Kyle Galea elaborates on the vital role of supply chains, how they underpin the modern economy and Blockchain’s role in weaving the next Industrial Revolution’s infrastructure.
Ties that bind: the potential of Blockchain supply chains
The Art of War by Sun Tzu, a source of inspiration for military strategists and business moguls alike, states that “the line between disorder and order lies in logistics.” Today, with the global economic order being underpinned by a world-spanning network of supply chains, this statement has come to reverberate on a much more fundamental level.
Whether physical or digital, the medium through which you’re reading this very article relied on the coordination of suppliers operating in several different countries and probably even several different continents. This being said, unforeseen pressures like the global pandemic and geo-political tensions have put this global legacy system under a level of duress it might not be able to survive in its current iteration. However, emerging technologies such as Blockchain may hold the key to a new age of commerce and trade.
The great lapse of globalization:
To understand the future and the present, it would first be apt to understand the past. The current interconnected system of trade and commerce grew out of the last three decades of Post-Cold War economic growth. The rise of reliable and cheap transportation combined with a relatively benign geopolitical environment led to the fostering of a generally free-market driven trade network. While not without a number of damaging side-effects, this system allowed for a novel degree of international prosperity including the ability to provide cheap goods globally.
Due to macro-economic trends and political tension, this era of Globalization may be coming to an end. The rise of trade-wars, conflict disrupting global suppliers and a general securitization of economic growth has led to a constriction of the global network. The COVID-19 Pandemic has acted as an existential threat to the interconnected global economy, shattering delicate supply chains under the weight of lockdowns, quarantines and production delays.
In summary, the last three years have been the perfect storm for the network that’s kept our world running the way it has for almost the last half-century. As politics tends to dance to the tune set by economics, this may lead to a more fractured, less prosperous and more volatile world-order. While we may be teetering on the edge, this fate isn’t inevitable.
Enter: The Blockchain
The Information Revolution has been a disruptive force for every single industry, enhancing their productivity and growth to unseen levels. This is mainly due to the fact that the efficient transfer of data and information as well as the ability to coordinate seamlessly is a vital engine in every single economic endeavor.
The Blockchain has the potential to disrupt industries for much the same reasons. The novel advantages Blockchain networks have compared to legacy systems augment their ability to serve as keystone technologies for industries in the present while opening up new paths for the future. In terms of supply chains, the advantages that Blockchain-based systems have are hard to ignore and tend to fall into four main aspects;
Efficiency, Traceability, Security and Resilience.
Efficiency is a pillar of any venture. The rise of more sophisticated smart contracts could allow for hyperconnected logistical systems that span the globe.
The Traceability that comes with Blockchain transactions means that supply chains could be tracked and fraud eliminated.
The confidentiality and privacy that is enabled by the system allows for unparalleled levels of Security. Finally, the framework allows for unparalleled opportunities for layers of redundancy that would reduce the potential for disruptions from both organization and network risks. This would allow for a truly Resilient network.
While this is structured more as a prospective look into how Blockchain can empower the next generation of supply chains, we can already see industry-leading firms adopting this approach today. Walmart, Ford, De Beers, UPS and many others are integrating Blockchain frameworks into their internal supply chains with all of them seeing massive increases in digitization, transparency, reliability and auditability.
A new safety net:
More than just a medium, supply chains knit together the infrastructure that keeps society together and empower us to exist, create and innovate. While we may be facing unprecedented challenges to the global economy, we may also have cutting edge tools within arms reach that allow for the birth of a new, more resilient and more rationalised wave of global trade.
A new Industrial Revolution cannot come to pass without the network to allow for its development and proliferation. However, if it does, we’ll have a lot to look forward to.
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With the peninsula being known for its natural beauty, rich cultural landscape and fantastic delicacies, the Balkans are renowned for having some of the most quintessentially Mediterranean vistas and experiences. From the Adriatic coastline of Split to the fairytale-esque castle of Lake Bled, the region has a lot to offer the world. This being said, something that fewer may know is the fact that the nations of the Balkans are incubating a nascent but powerfully growing technical expertise when it comes to frontier technology such as Blockchain, GameFi, AI and more. Therefore the region may not only be a rich adventure into the past but my also serve as a window into the very near future.
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