Blockchain has the potential to help solve the inequality problems of globalisation, for once and for all.
This is the second part of a three-part article series centred around Davos 2019. Davos’ theme is Globalisation 4.0. Globalisation is not a new idea; Globalisation 4.0 is. It refers to a new era of technological change that will prioritise a global economy and open markets, with “environmental sustainability and social inclusiveness.” It’s a movement labelled by the World Economic Forum, and goes hand-in-hand with Industry 4.0, largely driven by technology. Blockchain is part of Industry 4.0.
Globalisation 4.0 will also bring global economic and ecological challenges. Right now, the developed world is among the main group who benefit from new technology.
When it becomes widespread, globalisation will affect everyone. But will that effect be negative or positive?
Globalisation is our future, whether we like it or not
When the World Economic Forum conceived the term ‘Globalisation 4.0,’ it didn’t take long for the phrase to catch on. Specifically, Klaus Schwab, founder of the WEF, first referred to it in “Globalisation 4.0 – what does it mean?” Globalisation 4.0 is bigger than you might think. It incorporates the global expansion of the world economy, especially with the introduction of Industry 4.0. As the theme of this year’s Davos meeting, it’s becoming increasingly more relevant.
So, how does blockchain fit into all this?
Blockchain is a relatively new technology. With each year, it grows more mature, and unveils more potential. Blockchain is a decentralised and tamper-proof ledger (the technology is called DLT, or distributed ledger technology), which makes it perfect for things like data storage and communication. It also isn’t constricted by country or class – hence its global nature.
Blockchain has the potential to be the solution to the negative effects of globalisation. Globalisation generally targets minorities and marginalised groups, further cementing their poverty. While WEF’s Globalisation 4.0 appears all-inclusive, it can’t succeed without conscious effort from the global community.
Blockchain provides marginalised communities with access to things such as banking services, voting, secure data storage and money transfer. It also allows poorer communities to have their own methods of ID as well as things like property rights, allowing them to get loans and have monetary autonomy.
Blockchain is, in itself, global
So blockchain is global. But how can this solve the globalisation problem?
Firstly, some people argue that there isn’t – and won’t be – a problem. Globalisation 4.0, especially with the inclusion of Industry 4.0 technologies, will be widespread. But in any globalisation movement, there are losers.
In this case, developing countries lose out.
Industry 4.0 has the potential to impact the jobs of the marginalised. That is, they may eventually be replaced by robots in the form of automation. This problem goes hand-in-hand with Globalisation 4.0.
The impact of Globalisation 4.0 must therefore have strong positives to outweigh the ever-present negatives. This is where blockchain comes in.
Cryptocurrency allows marginalised communities to participate in a wider global economy. It provides banking for those who would otherwise be unbanked and quick monetary transactions.
Because of its global nature, blockchain has the potential to provide career and life opportunities. Many people living in poverty do not have the time or resources to network and advertise their talents. Blockchain could allow them to do this on a global scale.
It also provides both political and corporate transparency. If governments use it as a method of information storage and secure communication, transparency can be guaranteed. Likewise, it can bring visibility into working conditions. Marginalised communities are the main targets of abuse and injustice into the workforce. Blockchain can bring traceability into supply chains and abolish forced and child labour.
Is blockchain the answer to all of our problems?
Well, no. Blockchain won’t be the sole actor in reducing poverty. Rather, blockchain requires international cooperation. This is something that Davos 2019 aims to promote.
Poverty and social inequality are not purely technological problems. These are human problems. This means that, while blockchain can help with technological innovation, it will never solely fix all of our problems.
But it will definitely help.
Click here to find out more about how blockchain technology can help you.