Global spending on blockchain solutions will reach $4.1 billion (£3.18bn) this year at an increase of more than 50% compared to 2019, according to IDC.
The analyst firm’s latest Worldwide Blockchain Spending Guide forecast a five year CAGR of 46.9%, reaching a total of almost $17.9bn by 2024.
In total, banking and manufacturing – both process and discrete – will account for approximately half of total blockchain investment this year (below). Finance will be by far the biggest spender, at 29.7%, followed by process manufacturing (11.4%) and discrete manufacturing (10.9%). Professional services and retail also scored solidly at 6.6% and 6% respectively.
Looking at specific use cases, finance again dominates across the supply chain. Cross-border payments and settlements, lot lineage and provenance, and trade finance and transaction settlements will alone account for more than one third of blockchain spending through the forecast, IDC said. Asset and goods management, at 49.7% CAGR, will see the fastest growth.
The US will be the largest geographic market for blockchain spending in 2020 at $1.6bn, followed by Western Europe ($1bn) and China ($457m).
This comes as a positive outlook from IDC and an affirmation of the potential of blockchain technologies amid the Covid-19 pandemic. In May, the company said blockchain spending in Europe – based on its European IT buyer sentiment survey – would be down 8% in 2020. IDC said spending would recover long-term, however.
“The issues facing the global economy due to Covid-19 and the efforts to contain it have caused nearly every industry, market, and sector to re-evaluate core processes,” said James Wester, IDC research director for worldwide blockchain strategies. “This has accelerated interest and investment in digital transformation, which includes blockchain and distributed ledger technology.”
Wester added that the pandemic ‘exposed the vulnerabilities and weaknesses’ in supply chains among other industries – with blockchain a potential solution.
“As enterprises look at ways to address those vulnerabilities and weaknesses, they are recognising that blockchain and distributed ledger technology, by improving visibility and increasing efficiencies across value chains, are the perfect tools to not only fix existing problems but build entirely new markets and services,” said Wester.
Photo by Nick Fewings on Unsplash
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Credit: Blockchain News