Will blockchain usher in a new age of capitalism?
Capitalism is an economic system based on the creation of profit through privately owned production. Businesses operating in capitalist economies are autonomous, competitive, separate entities. They might have common ground or work together, but they are fundamentally opposed in that one’s profit is another’s loss.
Thanks to digitalisation, data, and disruption, traditional competition has changed. Today, it’s perfectly reasonable to team up with a competitor to create an improved product, service, or spin off. Ironically, collaborating with competitors can provide the insights and resources needed to make each party more, well, competitive. But how do businesses facilitate mutually beneficial collaboration in a secure, transparent, and traceable way?
It sounds like a job for blockchain…
Daring to share
Blockchain’s utility lies in decentralised exchange, regardless of what the resource might be. In B2B partnerships, data is the asset that’s usually shared. Could organisations use blockchain to keep track of the IP that they share with other businesses?
In Japan, a new data sharing project overseen by the Industrial Value Chain (IVC) aims to do just that. The IVC was formed in 2015 to promote the Internet of Things in the country, and now the focus is shifting to blockchain. The idea is that by sharing information about production and performance, the manufacturing sector will receive a much needed boost.
The initiative is hoped to give manufacturers the insight needed to build more robust tools. Participants – including the likes of DMG Mori, Yaskawa Electric and Mitsubishi Electric – will be able to decide what data they share, how much, and at what price. The end goal is to use shared data to make better equipment that works optimally for as long as possible, and when problems do occur, they can be anticipated and dealt with to reduce downtime.
Competition and capitalism: the chicken or the egg?
The IVC initiative shows that businesses are approaching competition with a different mindset. The rise in partnerships between competing companies is another indicator that the meaning of ‘privately owned production’ has changed. Instead of ‘privately owned’, perhaps it’s more appropriate to think of production as ‘fuelled by collaborative competition’. The drive for profit is the same, but the methods used to get there are not. Collaboration makes good business sense. There are still certain projects and analysis that companies won’t be willing to share, but their attitude to competitors has become more cooperative.
Has the change in competition led to a new era of capitalism, or has the evolution of capitalism changed competitive relationships? It’s true that economies are fluid, and capitalism is no exception. In the 1950s, economists began to talk about ‘neo capitalism’. Later still, mass data collection spawned the Big Brother-esque concept of ‘surveillance capitalism‘, in which data replaces products as the lifeblood of the system. Now, open data and industry convergence seem to be bringing about another shift in which parts of the selfish economy are becoming the sharing economy. While the machinery of mass production enabled capitalism to dominate business and society, disruptive technologies like blockchain are challenging traditional capitalist notions of competition.
It’s impossible to separate capitalism from competition. Capitalism would not have endured as an economic model if not for humanity’s competitive nature. Likewise, competition would have floundered if an alternative economic system had evolved. As such, to the delight of sharing economy enthusiasts, changing the nature of competition will change what it means to live in a capitalist society.
Back to blockchain
Today, competition is very much about being collaborative, and without decentralised blockchain platforms, data exchange would be much riskier. Blockchain’s immutable record avoids legal disputes by clearly attributing IP. Through self-regulating and decentralised smart contracts, organisations can collaborate with far more confidence. Rather than trusting a competing company, organisations place their trust in technology. Let’s say that one of the manufacturers in the IVC’s data sharing strategy opens up the information they have about the production and performance of a specific tool. If another company wants to access the information, they can, but may need to offer IP or capital in exchange. Once the exchange is made, each party gets something out of it which ultimately benefits the manufacturing industry as a whole.
Blockchain is one of many disruptive technologies that has made it easier for companies to stay competitive through collaboration. The IVC’s encouragement of blockchain adoption demonstrates just how much capitalist companies have changed. Instead of locking IP away forever, organisations recognise that data exchange is advisable, if not necessary. Blockchain provides a platform for sharing that is unbiased, reliable, and robust. By enabling collaborative competition, it will help shift the capitalist mindset from self-interest to mutual benefit.
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