Research firm IDC has released its spending forecast on the global blockchain industry for 2018 and 2021.
Spending on blockchain solutions is forecast to reach $2.1 billion in 2018, more than double from $945 million in 2017.
Blockchain spending is expected to achieve a five-year CAGR of 81.2 percent to reach total spending of $9.2 billion in 2021.
Growth driver in blockchain spending will be investment in distributed ledger technology (DLT) by enterprises in order to aggregate data into sequential, and immutable blockchain ledgers, transforming their businesses and operations.
The report noted that many technology vendors and service providers are working with consortiums such as the Enterprise Ethereum Alliance and the Hyperledger Projects to develop solutions that improve processes such as post-trade processing, tracking and tracing shipments in the supply chain, and transaction records for auditing and compliance.
“Also, multiple regulators and central banks have made positive comments about blockchain and DLT and this will help to accelerate demand in regulated industries such as financial services and healthcare,” Bill Fearnley, Jr., research director, Worldwide Blockchain Strategies at IDC.
The US will deliver more than 40 percent of worldwide blockchain spending throughout the forecast – focusing on financial services, manufacturing, and other industries. Distribution and services sector will see the largest blockchain investments in the US.
Western Europe will be the next largest region for blockchain spending, followed by China and Asia/Pacific (excluding Japan and China). The financial services sector will be the leading driver in Western Europe, China, and APeJC.
Financial sector will be spending $754 million towards blockchain in 2018, driven largely by rapid adoption in the banking industry.
The distribution and services sector will be spending $510 million on blockchain and will see strong investments from the retail and professional services industries.
Manufacturing and resources sector will be $448 million for blockchain — driven by the discrete and process manufacturing industries.
“We are seeing initial blockchain spending to transform existing highly manual and inefficient processes such as cross-border payments, provenance and post transaction settlements. These are areas of existing pain for many firms, and thus blockchain presents an attractive value proposition,” said Jessica Goepfert, program director, Customer Insights and Analysis.
IT services and business services will account for 75 percent of blockchain spending. The IDC report said Blockchain platform software will be the largest category of spending outside of the services category.