With availability and resources opening, SMEs can gain competitive and first-mover advantage through blockchain and distributed ledger technologies (DLT).
The future of business is subject to influences from many different forces. Market pressures, regulation, changing consumer habits, and growing globalisation have all made the future even more difficult to predict. However, there are a few certainties within the maelstrom of uncertainty — increasing digitalisation, the need for sustainability, and the overarching requirement for security, all in the context of the global pandemic that has impacted smaller businesses. Within these competing needs, how can small and medium enterprises (SMEs) transform and compete?
According to Technology Ireland ICT Skillnet, the widespread availability and growing adoption of blockchain and distributed ledger (DLT) technologies offer a potential solution. Blockchain is a secure, decentralised database technology where all stakeholders can see activity. It provides an immutable record, with encryption protection, to ensure the protection of sensitive data, while enhancing accountability and trust amongst all parties.
The need to prepare businesses for the digital transformation and support industry with the skills needed to address the digital skills gap is a key area of Skillnet Ireland’s strategic vision for the next five years. Blockchain and DLT can allow smaller businesses the kind of transparency, assurance and security that was previously only available to large organisations with deep pockets. Furthermore, the technologies have been argued as providing a base for SMEs to see the benefits of other emerging technologies in the areas of decentralised finance (DeFi) and artificial intelligence (AI). To further understand the value that blockchain can bring to SMEs we turned to Technology Ireland ICT Skillnet, experts in the area and businesses already benefitting from the technology to learn more.
Optimising business and developing new models
Writing for the financial news publication FinExtra, independent financial advisor and economist Carlo RW De Meijer, MIFSA, said “Blockchain opens new opportunities to SMEs in every sector, to solve existing challenges and enable them to optimise their business and develop new business models.”
Carlo refers to common challenges for SMEs around the world, such as access to finance, scaling, and security. He points out the capability of blockchains to provide trust, transparency, and security, to these fundamental issues.
Trade finance products argues Carlo, are being made more efficient due to transparency and the consensus mechanisms that replace multiple instances of verification and checking, opening them up for faster, secure access. He cites a study by the World Economic Forum which shows that blockchain technology could play a major role in reducing the worldwide trade finance gap, enabling trade that could otherwise not take place.
Smart contracts for scale
Smart contracts too, offer a means by which SMEs can access complex, global markets that might otherwise have been seen as too difficult or expensive to compete in. Smart contracts are described as lines of code stored on a blockchain that automatically execute when predetermined terms and conditions are met. Once put in place, smart contracts can be highly beneficial, ensuring transparent, safe, and predictable transactions that can scale according to requirements.
The inherent transparency of blockchain and DLT technologies was one of the key features that drew Shane McCarthy, Founder and CEO of Irish Craft Beers, to the technology. Creating DOWNSTREAM Beers, Shane saw the potential of blockchain to provide a basis for verifying the supply chain to help in sustainability efforts.
Verify and authenticate with blockchain
“DOWNSTREAM contains only premium quality raw materials – malt, hops, yeast and water. But it’s our blockchain technology that allows us to reveal the authenticity behind the brew from barley to bottle, so you know for certain that what you’re drinking doesn’t just taste fantastic, but is real, honest to goodness craft beer.”
Experience in the financial services industry grounded Shane in the business value of blockchain and DLT, where it “offered a really robust audit trail for sums of money moving between institutions. That has evolved in many ways,” he observed.
When he moved from financial services into exports, Shane said it was to help people verify and authenticate their products. “And that opened up a whole realm of possibilities, from fraud prevention to environmental aspects.” That evolved to verification for small, artisan producers, differentiating them from new brands for the industry giants trying to cash in on the growing craft beer market.
Trust, transparency and traceability were key features of the technology for Fiona Delaney, Founder and CEO of Origin Chain Networks. A coder at heart, Fiona saw the immediate benefits of blockchain technologies for supply chains, verification, and data protection when she studied the technologies. Her business provides proof-of-origin services built on blockchain and tailored to market needs. “Traceability, transparency and trust are the foundation of global digital trade. We help your company achieve its goals in a secure and enhanced-trust environment.”
Working first in the agri-food sector, Origin Chain Networks provides traceability and verification services designed to meet the needs of the increasingly regulated food industry.
“Blockchain provides oversight where it is not possible to control all entry points. It can create records that can be assured, that have integrity and have longevity,” said Fiona, who is also Chair of the Start-Ups Working Group for Blockchain Ireland.
Skills and resources required
These two business examples provide a good representation of how SMEs can approach blockchain. Fiona leveraged her coding skills and developed software and systems directly. Shane, through employing developers too, leveraged existing resources to configure a system hosted on ‘as-a-service’ platforms from technology vendors.
Shane emphasises that technical skills are no real barrier to entry for SMEs. He insists that if you can configure a website builder to make a website, “you can do this; you can use the tools to build this out and put it on your label for artisan products”. Considering this, the value of blockchain and DLT to small businesses becomes most compelling.
Shane is convinced of the advantage for small businesses. The phenomenon of ‘green washing’ where an organisation dresses up its achievements as being more environmentally friendly than they are, is widespread, and particularly so in consumer sectors. Carbon footprint concerns and personal responsibility are driving consumer choices.
“Small business can move quickest and will adapt to consumer choice. If consumers turn away from a big business because they are not transparent or honest about their sustainability and climate responsibility, then small businesses who can show their ethics and ethos through the likes of blockchain systems will win.”
AI access for collaboration
There are further possibilities for SMEs to exploit blockchain technologies that may give them access to even more valuable areas, such as AI. Writing for the European Business Review, Dr Yan Pang said “Blockchain technology can potentially be used to build a collaborative, open AI market for SMEs. By this means, SMEs can collaborate effectively to overcome the challenges in data and talent and develop successful AI solutions.”
Dr Pang is an Associate Professor at the Department of Analytics and Operations at the National University of Singapore (NUS), and the Co-Director of NUS Business Analytics Centre. A former Client Technical Advisor in Analytics and Optimisation at IBM, Dr Pang asserts that different participants in the open AI market can collaborate effectively to build successful AI solutions for SMEs.
According to Dr Pang through the unique aspects of the technology, “All participants can receive fair financial compensation for their contributions by defining the incentive mechanism using smart contracts on the blockchain. Through this framework, the power of AI is not controlled by large enterprises but benefits a large number of SMEs.”
Putting educational needs first
SMEs in Ireland need to be educated on the business value of blockchain and DLT first, to understand how it can be put to work for their organisations. Secondly, they need access to the technical skills to either engage with a technology service or develop their own bespoke solutions.
Technology Ireland ICT Skillnet and Skillnet Ireland are providing access to the needed resources, through partnerships with industry and academia, to ensure Irish businesses can engage and succeed with blockchain. The Masters in Blockchain in DCU, and resources such as IBM’s SkillsBuild programme, allow Irish organisations of all sizes to get the information they need to develop skills and create real value.
Blockchain and DLT have the potential to allow SMEs access to, and leverage, the kinds of capabilities only available to multinationals until recently. Smart contracts, DeFi, and AI all become real options for smaller businesses, with the assurance, transparency, and trust of blockchain. With these tools and services, SMEs can compete and win in the digital business world.
If you or your business are interested in learning more about the technology programmes that Skillnet Ireland offers through our Skillnet Business Networks visit our dedicated Network technology page to learn more. Visit the Technology Ireland ICT Skillnet website to keep up to date with the innovative programmes they offer.
Stay connected with kinetic
Receive regular news and insights from the world
of talent development straight to your inbox.
Receive regular news and insights from the world of talent development straight to your inbox.