World Economic Forum releases Blockchain Toolkit

The World Economic Forum (WEF) is a Non-governmental organization (NGO) founded in 1971. The organization is, "committed to improving the state of the world by engaging business, political, academic, and other leaders of society to shape global, regional, and industry agendas." It is a membership-based organization, and membership is made up of the world’s largest corporations.

The WEF recently released a Blockchain Deployment Toolkit, which is described as “a first-of-its-kind set of high-level guidelines documenting tested best practices to address the issues that arise in blockchain implementation projects.” The toolkit was announced on the 28th of April 2020 and is now available as a widget on the WEF website.

The toolkit contains checklists, guides, risk assessment calculators, and decision trees for supply chain businesses to use when making decisions around safely deploying blockchain technology,

Two Pilot programs for using the toolkit have already been conducted. The first was in collaboration with the Abu Dhabi Digital Authority (ADDA) of the U.A.E. ADDA used toolkit questions when building the Centre for the Fourth Industrial Revolution UAE (C4IR UAE). The U.A.E plans to make 50% of all federal payments blockchain based by 2021.

The Second pilot was run with Saudi Aramco. The Oil giant used the toolkit to run a blockchain based supplier management and credential verification system. Information in the toolkit helped Saudi Aramco speed up processing and build fraud detection systems.

The report notes that “Organisations are starting to understand the disruptive potential of blockchain to solve pain points and provide increased efficiency, automation and transparency across supply chains.” And that, “blockchain is the ultimate networked technology.”

The toolkit includes several Modules, covering Consortium Formation, Consortium governance, Digital Identity, and, Interoperability. It aims to act as a guide for implementing blockchain into each of these supply chain features.

The release of the toolkit is a direct response to economic chaos created by the spread of the COVID-19 virus. As global consumer demand has plummeted, global supply chains have also struggled. A key issues is finding ways to digitize or operate without face-to-face contact.

The Toolkit specifically targets inefficient global ports and shipping systems. An industry where incentives often direct parties to act in their own self-interest. According to the WEF, the outdated operations of world shipping have led to “consequences or downstream effects on other parties on the system as a whole. The result is a fractured system that leaves behind parts of the sector while capturing economic efficiency gains for certain actors. ”

The industry still relies on paper bills of lading and phone calls to confirm shipments. The system also needs maintenance, with old records requiring audits and coordination between recordkeepers frequently breaking down.

The WEF views these problems as being addressable, once measures are made to make global supply chains more resilient. Key concerns the Forum would like to see addressed by the industry are:

• The shift away from paper to digital models
• Better data privacy solution for suppliers
• Creating incentives for suppliers to share their data
• Early responses so that the industry is not frozen to halt during future crises

The report considers the problem of data sharing between suppliers as well. Currently, if an international exporter wants to see data on goods he sources internationally he likely needs to pay a large sum, separate from his goods payment.

The Blockchain toolkit suggests a connected blockchain-based system for goods and data exchanged between international suppliers is more efficient. The blockchain can create transparent and secure data networks. The blockchain can also support credit networks using smart contracts allowing exporters at much lower prices.

One of the toolkits’ main authors, Nadia Hewett, suggests the blockchain is not a silver bullet but has many features that are beneficial. Hewett cites the recent problem of scammers convincing individuals and medical centers into wasting emergency funds on fake masks. A blockchain-based system would have had immutability and transparency to disincentivize would-be scammers.