Over the course of 30 years, we’ve worked hard to establish a global supply chain that’s reliable and trustworthy. It’s taken time, money and a certain element of risk to get where we are today and that’s a story that I’m sure is shared with businesses the world over.
But the introduction of Blockchain could be about to change all that.
We’re in a tricky time. The unknown element of how our trade across Europe will look post Spring 2019, the introduction of cryptocurrency that could impact exchange rates across the globe and the explosion of data manipulation and misuse in an increasingly digital world.
So does the answer to trade and business security lie in even more technology in the form of a global supply chain that is owned by everybody?
History shows us what happens when trade is controlled in the hands of the few – the monopoly of the East India Company over the British tea trade ultimately led to the Boston Tea Party and the American Revolution.
But it’s not just monopolies on trade that have an impact on business, even in an open market there is still a level of risk to trading globally. This is where Blockchain technology could have the answers.
A large part of the risk with trading internationally is knowing whether your buyer or seller is actually real. There’s a huge amount of trust involved, and expense, when trying to be sure they’re legitimate. Paperwork varies from country to country and each country has different standards of regulation.
With Blockchain, we could be looking at a trade register that is globally owned and updated by everyone. Consider it the Wikipedia of the business world (with slightly more accurate data). Unified systems of verified buyers and sellers would negate the need for paperwork, lengthy delays of travelling to approve a supplier or even using different currencies. It could even stretch as far as keeping audit records on ethical practices.
The possibilities are there.
Back in 2016 Barclays made history by making the first Blockchain-based trade deal. It guaranteed the trade of nearly $100,000 worth of cheese and butter between Irish food co-operative Ornua and the Seychelles Trading Company.
It saw the trade process shift from between seven to 10 days to less than four hours. Not only does it have significant time benefits but by using Blockchain technology it also reduces the risk of documentary fraud.
As a business that’s vested in great relationships, I wonder how this might potentially damage the relationships that we’ve spent years building. The beauty of our global supply chain is that over time we’ve got to know them, when we have a problem it’s a shared problem and we can work together to overcome it.
With Blockchain technology it has the ability us to connect with anyone and carry out transactions and trade quickly. But its weakness is that it removes the human elements that make trade for businesses like us so important. Do we like this company? Are they interested in developing long term relationships and how do we know this by simply looking at data? It could potentially limit trade and business models to simply buying the cheapest option, and pricing a lot of businesses out of the market.
There is still a lot of development and research needed to help explore Blockchain’s capabilities and the opportunities that come with it. I’ll be watching with a cautious eye, hopeful that its growth doesn’t come at the cost of small and medium businesses.