The World Economic Forum (WEF) recently published a whitepaper discussing the progress of blockchain deployment in the United Arab Emirates. The highlights include an expectation by the UAE government that it can save $3 billion using the technology, and that non-technical issues are the biggest obstacles to blockchain adoption.
The report was prepared jointly with the Centre for the Fourth Industrial Revolution UAE (C4IR UAE) and in collaboration with the Dubai Future Foundation.
A survey explored the top blockchain challenges for different types of organizations, and they were consistently non-technical issues. About 62% of government respondents said it was difficult bringing together diverse stakeholders. Meanwhile, corporates (67%) and blockchain service providers (62%) identified regulatory uncertainty as the biggest issue.
Additionally, 48% of all organizations said education and stakeholder awareness were among the top three challenges they faced for blockchain deployment.
Across the board, bringing stakeholders to the table, alignment of interests, and communication between parties were the main issues for organizations.
To analyze the blockchain ecosystem in the region, C4IR UAE surveyed over 100 stakeholders from over 60 governmental and non-governmental organizations exploring or implementing blockchain applications. The announcement said that about 80% of public and private sector respondents are already implementing blockchain.
Blockchain efforts in the UAE
The UAE has been taking numerous measures to roll out blockchain into the country’s economy and governance. In 2018, the country launched its Emirates Blockchain Strategy to bolster blockchain adoption in government offices. It expects 50% of transactions to be completed using blockchain by 2021. Additionally, in 2016, the Dubai Blockchain Strategy was launched to explore and evaluate blockchain applications.
Leveraging blockchain technology, the UAE government can potentially eliminate 398 million paper documents and 77 million work hours per year. It expects to save about 11 billion dirhams ($3 billion) in transactions and document processing.
“These insights will also help us develop the correct governance for blockchain, based on the specific needs from those deploying the technology,” said Khalfan Belhoul, CEO of Dubai Future Foundation.
The report documents seven case studies to understand the fundamental challenges and success factors in deploying blockchain. These include projects by Emirates NBD, DP World, Emirates Airlines, and Etisalat Digital in the private sector, as well as the Abu Dhabi Digital Authority, the Ministry of Health and Prevention and Smart Dubai among public sector entities.
“The principles developed in the report will empower not only UAE’s and the region’s business and government entities, but will also drive meaningful collaborations with other countries that are part of the World Economic Forum’s Fourth Industrial Revolution Network for greater economic and social impact,” said Mirek Dusek, Head of Middle East and North Africa, Member of the Executive Committee, World Economic Forum.
While challenges do exist, the report identified critical success factors. These lie in the planning stages and defining how blockchain will be used. Given the collaborative nature of projects, it’s also critical to communicate continuously to ensure all parties are on the same page, and incentives are aligned.
About 80% of government respondents and 52% of service providers said identifying the most valuable use case was the top factor for the project to succeed. Meanwhile, 67% of corporate respondents said a clear definition of project scope, roles, responsibilities, as well as managing expectations led them to success.
The findings of the survey will be used to shape the upcoming WEF blockchain toolkit to help organizations achieve successful blockchain deployment.
The toolkit will provide stakeholders with tips on developing a blockchain ecosystem, forming and governing consortia, compliance advice, digital identity, security and interoperability.