Q: Where does IBM see value in the blockchain?
A: When you have something that is more than a technology, but a capability, that unlocks two things: access to data, and when you have data, it’s quality data. When you have that, then businesses can transact at a much faster rate with a higher sense of certainty. That’s the start of the trust economy, because from now onwards it can be trusted.
Once you have that, where is the limit, when there is no longer the lag inbetween each step in the value chain, from production all the way out to the consumer; when permission parties [those who have access to the blockchain network and can share and access the data] can see that an invoice has been paid, that a shipment has been delivered, that a product or service has the authenticity a consumer would expect from it? With that being unlocked, that takes this value chain to a new level, because it’s not just about from production to consumption, it’s everything that surrounds that.
Q: How are you testing business applications of blockchain?
A: We have a joint venture with [Danish business conglomerate] Maersk, that’s the trade portion. Then we have the consumer portion, where we are working with [US supermarket chain] Wal-Mart and others around food trust. Then we are working with banks around Europe on a trade finance platform called We.trade. All these experiences will eventually have to work together. The vision is the convergence that will happen between these trust networks. They will have to coexist and these ecosystems will open up a new vision of the global economy.
Q: These trust networks will be relevant if they can bring on board all the stakeholders in a particular industry or supply chain. What is the incentive for them to join the network and share their data?
A: Blockchain is a team sport; there has to be value in being part of the team, and that value is [access to] the data. And as the journey evolves, one of the challenges will be the interoperability between two [blockchain] systems. To reach a high level of interoperability and develop an ecosystem, we [developers] will have to converge.
Q: How can it be applied to trade finance?
A: The compelling thought is that if we share data between each other, high waters will raise all boats. Banks and SMEs [in We.trade] are sharing the data in order to lower barriers to trade finance for SMEs so that they can get access to quicker and easier trade finance. Think of those players that need the capital and have the ability to use the capital, but have higher hurdles based on either processes or all the steps it takes to have access to capital. But if you are able to share the data and get a better understanding of that entity, now you get a feeling of the opportunity we are talking about.
Q: What are the opportunities for investment promotion agencies?
A: There is always a challenge either [when] you want to expand overseas or take business in. There is uncertainty, there is risk, questionable data – all those things that stand in the way of certainty. If the data for a specific location is there and accurate, a company can lay advance analytics on that, and predict the growth of its business entity. That’s the exciting part that we have in front of us: quality and access.
Q: What’s in it for IBM?
A: Blockchain itself is just blockchain, but the capability it brings is even more exciting, because it serves as a catalyst for this illusive thing we call ‘digital reinvention’. If you can set up that platform and convene these players in the ecosystem, you have brought in digital reinvention by way of advanced analytics, cognitive, through a capable cloud secure platform. That seizes additional inches to innovate, create new value and give new access to new participants.