Why another tech-enabled global business and societal revolution may be in the making.
Blockchain technology has the potential to streamline and accelerate business processes, increase cybersecurity and reduce or eliminate the roles of trusted intermediaries (or centralized authorities) in industry after industry.
The blockchain reaction will pull in different industries at different times with differing levels of disruption, bringing both opportunity and risk. Understanding the nature of that pivot, and the tax, legal and policy questions it will raise, will take time and preparation.
One reason the blockchain reaction is racing toward critical mass faster than previous disruptive technologies is that it is arriving in the midst of the digital transformation already sweeping through most sectors of the global economy.
Consequently, despite the obstacles still to be overcome, businesspeople and governments are preconditioned to recognize blockchain’s potential. Tech companies have already established much of the digital infrastructure required to realize blockchain business visions.
These are alliances in which one or more parties make use of assets or capabilities of another party to create new business value, without affecting the other party’s ongoing use of the assets or capabilities for their original business purpose.
Industrial mash-ups are fluid partnerships that replace the “physical” vertical integration of an M&A or JV with an ecosystem of collaborating partners to bring the new business idea to market. They make possible the pursuit of new ideas that would not be viable under traditional M&A or JV approaches.
Why is it important for companies to start considering their place in a blockchain world?
Ask yourself: how will my company make money in a market where all transactions are transparent, secure and validated, industrial assets are shared among market participants, customers have even more information than they do today and regulatory compliance and tax collection occur in real time, at the moment transactions take place?
Prep sooner, not later
“Achieve readiness early” is perhaps the most important lesson from the high price so many tech companies paid for being slow to join the cloud and mobile disruptions.
Companies trying to operate at the speed of innovation will find that ignoring the tax and legal implications of their investment and operational decisions until late in the game could force them into a last-minute rethink.
Read the full piece on ey.com.
EY legal services contact:
Richard Goold – Technology, Media and Telecommunications Sector Leader for Law