All Growth: Data Firm Predicts Blockchain Spending to Hit $12.4 Billion in 2022
Market intelligence and advisory services provider International Data Corporation (IDC) predicts worldwide spending on blockchain will reach $12.4 billion USD in 2022, with an annual compound growth rate (CAGR) of 76 percent over the time period.
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Blockchain Investment Momentum to Continue
According to IDC’s updated Worldwide Semiannual Blockchain Spending Guide, global expenditure on blockchain technology will account for $2.9 billion in 2019, an increase of 90% compared to 2018’s $1.5 billion. Witnessing the robust growth, IDC researchers expect blockchain spending to hit $12.4 billion in the next three years.
In a report published this week, analysts at IDC forecast the spending trajectory to be spearheaded by the financial sector. The report highlights that the banking, securities and the insurance sector combined will see an investment of over $1.1 billion from the year’s total amount spent on blockchain technology.
Of the $1.1 billion to be ventured into distributed ledger tech, cross border payment and settlements will account for $453 million, and the trade finance will see an investment of about $285 million in this year.
The traditional banking sector’s interest in the trust-enhancing attributes of blockchain technology is noticeable, as in the last year most of the banks worldwide have dipped their toe into the blockchain ocean. The most recent being the project of United States’ biggest lender J.P. Morgan Chase & Co. Recently, the multinational investment bank announced plans to launch a blockchain-powered token dubbed JPM coin that would ameliorate cross-border transactions.
Blockchain Beyond Finance
A fresh analysis from IDC suggests that the manufacturing and resources sector, and the distribution and services sector, will not lag far behind the financial sector when it comes to spending on blockchain. Per the report, blockchain investment in the manufacturing industry will be valued at $653 million, with most of it being spent on tracking provenance.
Additionally, earlier this year, an Indian market intelligence firm Zion market research forecasted the manufacturing industry would invest over $300 million in 2024. While the figures are half that of IDC’s predictions, both research firms agree that over the next five years the manufacturing space will see the fastest growth when it comes to blockchain investments.
Moreover, in the year 2019, the distribution and services sector will also invest $642 million into blockchain projects. Another report published last year projected the market value of blockchain in the retail sector to see the growth of 29x in 2023, i.e.: $2.3 billion from 2018’s $80 million.
United States Leads Blockchain Spending
While 2018 was a record year for spending on the blockchain, analysts at IDC expect the moment to continue and expand to other industries.
James Wester, IDC’s Research Director for Worldwide Blockchain Strategies, states that businesses are moving pilot programs to enterprise-ready blockchain products.
“Blockchain is maturing rapidly, and we have reached an inflection point where implementations are moving quickly beyond the pilot and proof of concept phase,” he said.
Jessica Goepfert, program vice president for IDC’s Customer Insights & Analysis, highlighted that energy settlements and warranty claims are also among the industries that are showing interest in blockchain.
Recently, Indian business consulting firm Infoholic Research LLP predicted investment in energy utilities using the tech to hit $3.4 billion by 2024.
Another notable takeaway from the IDC report is that the United States will spend more than all other countries on blockchain projects. Per the regional segmentation, the United States will lead investment figures by spending $1.1 billion in 2019. While western Europe and China will tail behind with $674 million and $319 million in blockchain expenditure.
Just last month, advocacy group the Chamber of Digital Commerce urged the United States government to develop a national action plan for the revolutionary technology. The group also called for progressive blockchain regulations.
Will blockchain investment expand beyond finance? Share your views in the comments section.
Images via Pixabay