Enthusiasm for blockchain technology in businesses and organizations continues to gather steam, with global spending on blockchain solutions expected to rise almost tenfold between 2018 and 2022.
According to market research firm International Data Corporation, the global expenditure on blockchain is expected to grow at a compound annual growth rate of 73.2% to reach a figure of $11.7 billion in 2022. This year, $1.5 billion is expected to be spent on these solutions.
The biggest investments in this technological field will be made in the United States, with the world’s largest economy grabbing 36% of the global spending throughout the five-year period. Western Europe will be the next biggest beneficiary, followed by China. Countries in the Asia Pacific region will also see significant investments in blockchain.
Fastest Blockchain Growth Rate
On a country-by-country basis, per the IDC report, the fastest compounded annual growth rate (CAGR) will be witnessed in Japan where the CAGR will be 108.7% during the forecast period. Canada will enjoy the second-fastest growth in blockchain spending, with the CAGR hitting 86.7%.
Worldwide, most of the spending on distributed ledger technology (DLT) will flow to the financial sector, with this year seeing an expected $552 million spent in this field. The distribution and services sector will occupy the second position, with the manufacturing and resources sector coming in third. This year, the former is expected to record blockchain investments totaling $379 million, while the latter will see spending of approximately $334 million.
DLT Spending: Industry and Use Cases
Industries which are expected to enjoy the fastest growth with regards to blockchain investments include process manufacturing, which will see a compound annual growth rate of 78.8%. Professional services will enjoy a CAGR of 77.7%, while the banking sector will see a CAGR of 74.7%.
In the financial sector, the use case that will witness the largest amount of DLT spending will be cross-border payments and settlements, with $193 million expected to be invested this year. Amounts totaling $148 million are expected to be invested in trade finance and post-trade transaction settlements, another use case of blockchain in the financial sector.
Lot or lineage provenance, one of the use cases of blockchain technology in the manufacturing and resources sector and the distribution and services sector, will record DLT investments totaling $160 million this year.
Reducing Costs, Enhancing Efficiency
The efficiencies and cost-effectiveness that blockchain solutions could bring about in the manufacturing and resources sector, as well as in the distribution and services sector, have been cited as part of the reason for the rapid adoption of the technology.
“We continue to see the greatest spending and growth for blockchain around lot lineage and asset and goods management. Highly visible scandals combined with complex supply chains and incomplete information set the stage for investments and projects in these areas,” IDC’s Customer Insights and Analysis program vice president, Jessica Goepfert, said.