For 2019, it is estimated that expenditure in the continent will exceed US $800 million. Identity management is one of the cases of blockchain use with the greatest boom in Europe.
The International Data Corporation (IDC), through its most recent blockchain global biannual Guide for Expenditure, reports that expenditure on these types of technologies in Europe could reach US $4.9 billion by 2023.
The statistical data, published on August 27th on the IDC website, warn of a progressive increase in expenditure on blockchain technologies in Europe, estimated at more than US $800 million by the end of 2019, with a compound annual growth rate (CAGR) of 65.1%, between 2018 and 2023.
According to the guide, it is estimated that the investments of the industrial or process manufacturing sector will have a growth of 69%, between 2018 and 2023. Likewise, professional services and retail trade are expected to increase their investments by 68% in the same time period. Meanwhile, the discrete manufacturing industry sector would do so at 67% and the banking sector at 66%.
The firm noted that in 2019 banks still account for 31% of total blockchain expenditure. Besides, bank use cases, including cross-border payments and trade financing, are experiencing rapid growth. He highlighted that, in addition to banking, other industries are increasingly intensifying and participating in digital transformation. In that sense, identity management is one of the booming use cases in Europe.
Reduction of Risks
The IDC states that blockchain has allowed companies to eliminate intermediaries, save costs and reduce risks of fraud and human error. It also argued that it is becoming crucial that European companies have an effective and secure way to store, protect and use customers’ personal data in the insurance, banking, government, personal and consumer services sectors. For this reason, blockchains are being used for a variety of purposes, including i-vote (Internet voting) and intellectual property management.
Regarding this, Carla La Croce, senior research analyst at the IDC, highlighted that companies are now seeing blockchain not only for their cryptocurrency-related resources. They are also using it as a management tool for tracking items, information and customer data. In her opinion, as expenditure continues to grow, it is more likely that the market adapts and security and validity become a standard for the customer, with more companies adopting blockchain as a secure and reliable solution.
For his part, Mohamed Hefny, Program, Systems Solutions and Infrastructure Manager at the IDC, believes that some challenges are subject to the lack of rules and regulations, and the way in which small goods producers, such as farmers and fishermen, use business platforms. Despite this, he believes that the fact that the European Commission recognizes the importance of this type of technology is promising.
US and Europe, the Greatest Investors
In early August, the IDC issued a report where it revealed that the country with the highest levels of investment in blockchain projects in 2019 is the United States, with expenditure on crypto asset technology solutions estimated at almost US $1,100 millions. These figures show a steady trend over time, since for the 2017-2022 period, Western Europe occupies the second place in this projection (with US $661 million), followed by China and the Asian countries of the Pacific zone (excluding Japan).
Finally, the IDC considered that blockchain technologies will allow large companies and emerging firms to guarantee a digitalized and data-based market that ensures reliable management of assets, money and consumer personal data.
By Willmen Blanco
