Steinbeis experts examine the anticipated impact of blockchain technology
Within a handful of years, blockchain technology has transformed from a solution for computer specialists and cryptographers into a global phenomenon, now practically mentioned every day in the mass media. Horst Treiblmaier, professor at MODUL University Vienna, and Uwe Umlauff, a project manager at the Steinbeis Transfer Institute for Innovation & Business Creation, have been examining the different ways blockchain technology might affect the future world of work.
The origins of blockchain can be traced back through numerous publications over the last decade on the topics of cryptography and distributed databases. But it required a stroke of genius to create what is now widely referred to in modern media as blockchain: In 2008 a nine-page publication was produced with the unremarkable title Bitcoin: A Peer-to- Peer Electronic Cash System. Written under the pseudonym Satoshi Nakamoto, the whitepaper represented an ingenious amalgamation of existing know-how, and the potential impacts of blockchain technology, which was initially only used for the cryptocurrency Bitcoin, initially remained obscured from view due to the complexity of the technology. By around 2013/2014 Bitcoin started to achieve something that financial experts and economists had considered somewhat unlikely. It had engendered trust and achieved exponential growth, which continued unabated until around the end of 2017. A variety of books on the topic have been published since 2015, many of them targeted at a wider audience. They offer many ideas on the different ways blockchain can be used to solve the political, societal, economic, and environmental problems of our times. One key area that is affected is the world of work, which is already subject to continual change due to increasing levels of digitalization.
In early 2018, Horst Treiblmaier and Uwe Umlauff interviewed 24 experts who are actively working on the development and implementation of blockchain-based concepts as part of the City of Blockchain movement (www. cityofblockchain.org), an association that promotes the interests of blockchain technology in Vienna. The aim of their interviews was to develop different scenarios that summarize the impact of blockchain on the world of work. In a nutshell, the experts were generally of the same opinion and this resulted in three different scenarios, which can be expressed in simple terms: no impact, job losses in low-qualified areas, and changes in the quality of work. Some experts believe there is no need to expect blockchain to bring any significant new ideas to the world of work. Not surprisingly, these experts include blockchain sceptics who have general doubts about the underlying applicability of the technology. But some of the experts who were interviewed feel there are some meaningful uses for blockchain in areas such as the financial sector, although they doubt that there will be significant impact on work environments. The second group essentially sees blockchain as a continuation or acceleration not only of progressive digitalization in the world of work, but also the resulting exchange of ideas between people and computers or robots. With blockchain, this could first and foremost affect certain occupational groups in intermediary roles. For example, the immutable and simultaneous access of different types of business partners to blockchain systems could simplify supply chain processes significantly and make them more efficient. This would mean that certain steps within a process that was previously managed by people would no longer be required. Other examples affect intermediaries such as Uber and Airbnb, which themselves have put existing business models under considerable pressure in recent years. In addition, although blockchain will probably only form a small part of the large technology puzzle, the experts believe there could be negative effects on low-skilled workers as manual tasks are replaced due to increasing levels of rationalization. That said, more intellectual tasks could also be increasingly pushed aside by robots and computers.
In contrast to the possibilities pointed out by these two groups, there is a third scenario that postulates that changes in the quality of work would have both negative and positive effects. This group of experts believes that the threat posed by blockchain technology will manifest itself in job losses and a loss of manual work; nevertheless, there could also be a large number of positive effects, such as shifts toward highly qualified and creative work. According to the experts, these developments are easy to predict and as a result, there could be a significant rise in demand for well-educated workers with an understanding of fields like IT and law. So-called smart contracts are one important innovation stemming from blockchain technology. These are rules that are clearly defined by programming code; if an event occurs in line with predefined conditions, the rules are executed automatically. To write such programs, people with new qualifications will be required – people who are not currently available in the job market.
Another area that was looked at in the interviews carried out by Horst Treiblmaier and Uwe Umlauff was how we plan or design the world of work. For example, solutions based on blockchain technology are in a position to simplify how we log time and check performance. The efficiency improvements and more equitable rewards this offers compensate for certain negative impacts, such as increasing losses in privacy and comprehensive monitoring, which a significant number of the interviewees were critical about. Further areas of application that were named are the continuous and objective tracking of qualifications and more simplified payroll processes.
Central features of blockchain, such as the immutability of database entries or uniform views of shared data, are a double-edged sword for the world of work. Overall, the project team felt that these factors could have either positive or negative impacts. The opinions of the experts were divided regarding how extreme impacts will be and in which direction things could go. This once again highlights the need to actively seek and shape solutions that will secure jobs and enhance the quality of work from an employee standpoint. Blockchain technology is just a tool. What’s crucial is how this tool is used.