On the level

How the OECD can release the power of blockchain

Leanne Kemp, Founder and CEO, Everledger; Queensland Chief Entrepreneur, Australia

By Leanne Kemp, Founder and CEO, Everledger; Queensland Chief Entrepreneur, Australia

I’m deeply honoured to receive an invitation from the OECD to collaborate on its Blockchain Expert Policy Advisory Board. The OECD has a leading role to play in setting standards for the global adoption of blockchain, to shape policies that foster prosperity, equality, opportunity and well-being for all.

Businesses have become remarkably good at planning and then executing strategies across complex, global supply chains. Similarly, many governments increasingly excel at setting bold, progressive policies and executing large, ambitious programmes. The problem for both is, the world is shifting under their feet, given the complex nature and rapid adoption of emerging technologies.

I’m ready to help the OECD and its stakeholders to bridge the gap. As I said at the OECD Global Blockchain Policy Forum in Paris last September, I believe that blockchain has the potential to transform the functioning of a wide range of industries. Its features can increase transparency and traceability, facilitate market access and improve the efficiency of transactions. Within two to three years, it will cause companies to transform their business models and change how they create and capture value.

Blockchain will become so ubiquitous that, as with other technologies that underlie our day-to-day, we will not be reading or talking about it on media headlines. What we will be exploring and discovering deeply are applications; how they have transformed industries, and how they have transformed data security and privacy, not just for companies, but also for consumers. Digital ubiquity is revolutionising business.

Blockchain has the potential to transform our interpretation of trust and how we relate to it. The OECD’s role is to help guide and support this transformation from a higher level, exploring the benefits and risks of blockchain for economies and societies. What are good policies and regulatory approaches? What does it mean for competition or intellectual property? What are the major risks and opportunities?

Blockchain can energise supply chains

There is currently a $1.5 trillion gap between the market demand and supply of trade finance, with a particular impact on Small and Medium Businesses, which are the prime catalyst of financial inclusion in wider society. This gap may rise to $2.4 trillion by 2025 – unless supply chains can find a different way of channelling funds to meet demand. New digital technologies offer that alternative, especially blockchain. Bain predicts that blockchain could help reduce as much as $1.1 trillion of this trade finance gap over the next decade.

Blockchain can therefore play a significant role in tackling social inequality. Of course, it’s not a silver bullet. Other new technologies will emerge over time and blockchain itself will evolve immensely. We need to act now, as no policy domain is immune to the fundamental shift underway. When setting economic policy, government leaders must account for the startlingly unpredictable ways technology can change how countries compete. For example, what if blockchain made it possible to competitively manufacture products anywhere in the world, especially in those emerging economies where financial exclusion is currently impeding growth and development?

I believe the OECD has a role to play in steering governments to set a policy environment that encourages innovation and experimentation in blockchain, while monitoring the risks of misuse. The OECD is already exploring the policy implications in a variety of areas including artificial intelligence, health, transportation, agriculture, environment, and supply chain management.

Shining a light on knowledge

The Fourth Industrial Revolution is now. Dramatic changes are affecting us all across science, work, ethics and the environment. Technology can solve many problems, but there are some – such as climate change and societal inequality – that are ultimately in the hands of we humans alone. The OECD can join the dots for domestic priorities and global actions.

The simplicity of blockchain is vital for giving visibility to supply chain information – an asset that is traditionally guarded and commonly abused. This new transparency can not only help reduce the burden of compliance on companies and businesses, but also limit the influence of intermediaries.

Our work at the OECD can help ensure that nothing gets in the way of the noble purpose to help distribute opportunities for wealth creation and economic development more widely than before. It’s called sustainability, right?

If blockchain is going to be one of the transformative technologies of our time, the OECD’s role is to make sure governments are ready; that think tanks and academia explore its benefits and help avoid its pitfalls; that industry learns from best practices and implements it ethically; and that people know how to manage their privacy, finances and future applications of the technology with increasing levels of knowledge.

Policy makers must begin by systematically studying the long-term future through the application of strategic foresight – scenario planning, horizon scanning and strategic shocks analysis.

I can’t wait, it’s time to roll up our sleeves!

References

OECD forms a high-level expert group on blockchain

OECD Global Blockchain Policy Forum

OECD work on blockchain