Blockchain in Manufacturing to Reach $566M by 2025, Report Says
Two recent reports from Markets and Markets estimate the growth of blockchain-facilitated markets in the manufacturing and agriculture sectors.
As the end of 2018 is getting closer, it’s time to recap the performance of the blockchain market, which was promised to move from the phase of trials and explorations to the phase of real use cases. A recent report prepared by research firm Markets and Markets predicts the evolution of the blockchain technology in the manufacturing market by 2025. Thus, the report says that blockchain in manufacturing is predicted to be worth $30.0 million by 2020 and $566.2 million by 2025, generating a growth rate at CAGR of 80.0% from 2020 to 2025.
Some of the main drivers behind the blockchain expansion in the manufacturing industry will be operational technology (OT) and information technology (IT), the explosion in blockchain-related patent applications, the increase of investments from VC firms, increasing demand for real-time data analysis, especially in the supply chain management, and the need for innovative technologies in manufacturing. Supply chain management and logistics applications will dominate the market.
As for the distribution of blockchain expansion by region, the growth of this emerging technology in manufacturing will see the highest CAGR from 2020 to 2025 in the Asia Pacific region (APAC). Countries like Singapore, Australia, China, and India are noting a major increase in the number of companies focusing on distributed ledger technology (DLT), an umbrella term that is often used for blockchain. China and India are exploring the technology’s potential despite sticking to their tough stance against cryptocurrencies.
In July, we reported on the sudden surge in the number of Chinese startups and established companies using the term “blockchain” in their names. This trend has also been noticed in the West, with the SEC trying to control the situation.
In the APAC region, as well as in several other world regions, innovative technologies like DLT are directly or indirectly supported by governments. For example, in Singapore, the Monetary Authority of Singapore (MAS), which acts as the central bank and the main financial regulator, has been active at support financial technologies, including blockchain. At the end of August, MAS partnered with Singapore Exchange to build Delivery versus Payment solutions for the settlement of tokenized assets.
In Australia, IBM won a $740 million contract to build blockchain applications and solutions for government agencies over the next few years.
Markets and Markets also prepared a report on blockchain growth in the agriculture and food supply chain market. According to the research firm, the global blockchain in this market is comparable to the manufacturing sector, and is expected to be valued at $60.8 million in 2018 and might hit $ 429.7 million by 2023, based on a CAGR of 47.8% during this period.
Companies are keen to leverage the benefits of blockchain especially for real-time food data analysis and food tracking. The report cites the findings of the Congressional Research Service, which said in 2014 that the cost of food fraud cases might have been up to $15 billion per year. Elsewhere, the World Health Organization found that, as of October 2017, 10% of people become ill after consuming contaminated food products. This results in 420,000 deaths each year, which converts in about 33 million healthy life years. The application of blockchain might streamline processes in the food supply management and bring transparency, security, and lower costs.
Interestingly, the APAC region will also be the most active at implementing and expanding the technology in the agriculture and food supply management.