After heavy funding cuts for blockchain this year, Global 2000 companies are looking to DLT to regain a competitive advantage in the post-coronavirus landscape.
Professional services firm KPMG has published a report predicting that blockchain will be one of five emerging technology sectors to see increased investment from enterprises over the next 12 months.
Titled Enterprise Reboot, the report was compiled by KPMG International and HFS Research. It draws on a survey of 900 executives from organisations on the Forbes’ Global 2000 list of the largest public companies with more than $1 billion in annual revenue.
While it found investment in blockchain fell by 63% due to the pandemic, the report predicts that the sector, along with artificial intelligence (AI), cloud, 5G, and process automation technologies, will see increased investment as major firms seek to gain a competitive advantage in the post-COVID-19 business climate.
Tech spending hit hard
KPMG noted that Global 2000 companies quickly moved to slash funding to emerging technologies as the coronavirus lock-down and recessions took effect and forced firms to prioritize survival over all other considerations. Roughly 40% of executives indicated they had moved to entirely cease investment into emerging technology initiatives.
The report found blockchain funding to have been the hardest hit by the COVID-19 lockdown, with distributed ledger technologies (DLT) sliding from the largest emerging technology sector with a weighted average investment of $18 million to the second-smallest with $6.5 million.
Executives reported that blockchain investments fell 63% on average — the largest average percentage loss of funding among the emerging technology sectors.
However, the report found that 59% of executives believe that COVID-19 has created an impetus to accelerate digitization initiatives.
Executives report that blockchain investments are seen to offer improvements in “competitive positioning,” and will improve efficiencies and governance processes and provide the “foundation for infrastructure modernization.”
The report found 65% of executives believe the combined use of emerging technologies will produce greater returns than investing in a single technology in isolation.
However Steve Hill, KPMG’s global head of innovation said that trust issues continue to hamper distributed ledger technologies.
“Visible trust gaps for emerging technologies such as AI, blockchain and [internet-of-things] IoT continue to remain significant barriers to adoption,” he said.
“I believe that organizations will have to get trust right for successful deployment of emerging technologies to recover from the crisis […] It is these organizations that are likely to navigate through the recovery in better shape.”