Blockchain and the Public Sector – as much a new business model as a new technology
The report last week by Sir Mark Walport, the Government Chief Scientific Advisor, arguing that blockchain provides a future platform for Government brings into focus the opportunity from this rapidly emerging technology. At one level crypto-currencies have the ability to create alternative value transfer mechanisms which support the localisation of services and economies, whilst at another level the blockchain technology itself can create new services and remove the need for traditional centralised processing platforms. The pace of investment in blockchain is huge, driven by the financial services industry which sees it as a threat to its current model (and systems), as well as an opportunity to operate differently and provide a step change in consumer facing services (real time payments, smart contracts, new ID management models).
However, we need to be clear that it’s not just new technology, rather it is a new operating model, ie:
- From centralised processing and authorisation to distributed processing and consensus
- From secure protected platforms to processing in the cloud using cryptography and distribution for security
- From private ledgers to public ledgers
So we can see the opportunity at a number of levels:
- Re-imagine centralised processing services (HMRC, DWP) into distributed open models
- Empower networks of common services (NHS, Local Authorities) with a network model which allows effective sharing of services, data and processes, enabling dramatic reductions in duplications of systems and services (something Government has been trying to do for the last 15 years)
- Create new automated services for value exchange between government entities and across the boundary with 3rd parties (e.g. using Smart contracts for VAT calculation and collection, or for property registers and transactions)
So the opportunity is huge and imminent but to grasp it we need to think about fundamental changes to ways of working rather than just new technology.