Computing giant IBM has published a report that details the extent of the impact that blockchain can have in the automotive industry with favorable findings. The report identifies “Auto Pioneers” who are aggressively pursuing blockchain with significant investments into researching the technology.
Titled ‘Daring to be first: How auto pioneers are taking the plunge into blockchain‘, the study is the result of a survey in which 1,314 automotive executives took part, namely original equipment manufacturers (OEMs) and suppliers. The survey had a global reach with respondents coming from ten countries including the United States, China, Germany, and India.
To begin with, the study found that a majority of both OEMs (61%) and suppliers (62%) believed that within the next three years, blockchain would be a disruptive force. Additionally, the study found that 56% of OEMs and 52% of suppliers believe that investments made into blockchain by their respective companies will be “highly influenced by the opportunity to develop new business models”. According to the study, newer models such as on-demand ridesharing could benefit from blockchain solutions that are geared toward fleet management services. For OEMs, there is a strong opportunity for blockchain in this area to manage payment transactions, enhance participant authentication and so on.
The nascent nature of the blockchain industry rolls in tandem with the very early stages of implementation on a commercial scale. As a result, very few executives felt that their organization was prepared for the tech. Only 10% of suppliers felt they were prepared, compared to OEMs (32%) who appear to be more confident in this context. The IBM study offers some context for this by adding that among executives, there is a general lack of understanding of their companies’ blockchain strategies, 39% of OEMs and 51% of suppliers were only “slightly aware” of such strategies.
Furthermore, skill shortages were cited as a concern among the survey’s respondents; a decent proportion of both OEMs (37%) and suppliers (42%) found this to be the case. In the instance of perceived barriers, “regulatory constraints” also appeared to be an issue – OEMs (42%), suppliers (33%).
When it comes to taking action, OEMs are ahead of suppliers; the report notes that most of the “action is still in the experimentation phase”, and it also found that only 12% of OEMs and 28% of supplier executives could confirm that their companies aren’t even considering blockchain at present.
Among the numerous data-points to take away from the IBM study, there is a particular strand of survey respondents that proved to be far more proactive in their pursuit of the tech.
Dubbed as “Auto Pioneers”, these respondents are positioned in this category due to the meeting two criteria points they meet. One, they “report familiarity” with their organization’s blockchain strategy, and secondly, these participants have reported that their companies are in one of three stages: experimenting, piloting or implementing. For clarity, it should be noted that Auto Pioneers make up only 15% of the total surveyed.
These Auto Pioneers are moving rapidly into the space, with 95% of them to be “investing aggressively” into blockchain, compared to 56% of other OEMs and 26% of other suppliers. Additionally, Auto Pioneers are set to lead the way across the board when it comes down to new business models that will influence blockchain investments.
Other takeaways include:
- 54% of executives expect new business models to influence investments in blockchain.
- At least 50% of the OEM executives in each country believe that blockchain solutions will have a high impact on fleet management services.
- 55% of OEMs and 47% of suppliers say implementing blockchain will improve imperfect information in their business networks.
According to a press release, Ben Stanley, Automotive Research for IBM’s Institute of Business Value said: “We are in the very early stages for blockchain in auto, but there lies huge potential… In 2019 we expect to see blockchain start to really take off, particularly with secure data sharing, car and rideshare transactions and in-vehicle marketplaces.”