62% of Auto Execs Believe Blockchain Will Disrupt Industry within 3 Years: IBM Study

The auto industry is betting big on blockchain. In fact, a whopping 62% of auto executives say the technology underpinning bitcoin will be a disruptive force in the industry by 2021.

Moreover, 95% of carmakers plan to make "moderate to significant" blockchain investments over the next three years, according to a report by the IBM Institute for Business Value, a business-research group.

In its executive report entitled "Daring to Be First," the IBM Institute says blockchain can revolutionize the auto industry by bringing transparency to supply chain management and financial transactions.

Auto Industry Invests in Blockchain

Here are some key findings:

  • 62% of executives say blockchain will be a disruptive force in the industry within 3 years.
  • 54% expect new business models to influence investments in blockchain.
  • 54% of executives will implement their first commercial blockchain network at scale within 3 years.

Industry leaders believe that the ingenuity of distributed ledger systems will bolster the use of smart contracts, which are self-executing, self-enforcing contracts.

"Thousands of parts go into the assembly of a vehicle," the IBM report noted. "The inability to track and verify the parts can result in parts that do not work properly when they are integrated with others. Performance issues and customer dissatisfaction can then occur."

Auto executives are counting on the blockchain promise of secure, traceable transactions and improved transparency of information to streamline supply chain management.

auto industry embraces blockchain
Source: IBM Institute

The IBM Institute pointed out that German auto giant Porsche has been testing blockchain applications in its vehicles since February 2018.

As CCN reported, Porsche has been developing blockchain applications to park cars, lock and unlock vehicles, and make loaning out a company car to an employee easier.

Because all transactions are recorded on a distributed ledger, car owners would be able to monitor who used their vehicle and when. This could play a major factor in expanding the “sharing” economy that has skyrocketed during the past few years.

Blockchain Used to Track Fresh Produce

IBM has been quietly researching blockchain technology for several years. In October 2018, IBM partnered with French grocery mega-chain Carrefour to improve food safety by tracking chicken, eggs, and tomatoes as they travel from farms to stores.

To do this, Carrefour integrated Food Trust, IBM’s tailored blockchain data system as part of its supply chain.

Carrefour — Europe’s largest retailer with over 12,000 locations around the world — plans to use this system to track all its fresh product lines over the next few years.

Carrefour executives say blockchain will help them detect and prevent outbreaks of salmonella linked to eggs and poultry, which are a major problem in the food industry.

World’s Largest Diamond Retailer Uses Blockchain

Even avowed bitcoin haters concede that blockchain is a revolutionary technology that can transform healthcare, banking, supply chain management, and even the entertainment industry.

In May 2018, Signet Jewelers — the world’s largest retailer of diamond jewelry — joined Tracr, the diamond blockchain program launched by South African gem behemoth De Beers Group.

The blockchain project ensures that the gems are not illegal “conflict diamonds” mined by slaves in African war zones by providing mine-to-customer traceability.

Tracr also ensures there’s no theft or illicit substitution along the way, so the end user — the customer — can be assured of their diamond’s authenticity and provenance. It is the first program that digitally tracks each diamond from mine to retail.

Experts say this novel use of blockchain reaffirms the potential game-changing applications of distributed ledger technology.

Featured Image from Shutterstock

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About the author

Samantha Chang
Samantha Chang

Samantha Chang is a New York City-based financial editor who writes about crypto and business at CCN. She is a law school grad and an alum of the University of Pennsylvania. Email her at [email protected] or follow her on Twitter at Samantha_Chang.

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