According to a market research report published on June 13 by Reportlinker, the blockchain technology market in the aerospace as well as auto industries will grow to $20 billion by the year 2029. The analysis conducted by the firm forecasts that applications of the technology will grow at a compounded annual rate of 60.35% for the next 10 years.
Blockchain Features Major Growth Drivers
According to the report, blockchain technology’s key features of transparency, the removal of the risk of fraud and speedy settlements are the major growth drivers for its growth in these two sectors.
The report states that the insurance, payments and financial services for the automotive industry, and the supply chain and manufacturing segments of the aerospace and aviation markets are dominating blockchain use cases. It also says that this dominance is expected to continue until 2029.
This is because of the complexity of the supply chain in the automotive industry. The ecosystem of this space is extremely interconnected, which means issues of cyber threats are increased.
The report also states that the current dominance of the private blockchain space will continue for the forecasted 10 years, mainly because of the advantages that private blockchains have over public blockchains. Private blockchains are highly secured and permissioned networks, and have much faster processing speeds than public blockchains.
The report states that in terms of the region-wise blockchain adoption of blockchain technology in the automotive as well as aerospace sectors, North America will lead the way.
According to the study, there are a few issues that could smother the adoption of blockchain technology in these industries. This includes a lack of a regulatory framework, the lack of technical expertise, a lack of standardization, as well as lack of awareness among the industries’ players.
Increase in Blockchain Spending
According to reports, for 2019, global spend on blockchain will account for nearly $2.9 billion, an 88.7% increase since 2018. And Data International, the market research firm, predicts that manufacturing will spend $653 million and distribution services will spend $642 million on blockchain this year.
The US Federal government is also expected to increase its blockchain related spending to $123.5 million by the year 2022. This is going to be a 1000% increase on the spend of $10.7 million the government spent in 2017.
In 2017, IDC Government Insights said that it believed that early spending would be focused on asset management and supply chain, while later, the spending would expand to include identity management as well as complex financial transactions.