At World AI Conference 2018, Jack Ma, the co-founder and chairman of $414 billion e-commerce conglomerate Alibaba, stated that artificial intelligence (AI), blockchain, and Internet of Things (IoT) can all become meaningless if they fail to target the manufacturing industry.
“AI, Blockchain and IoT will be meaningless tech unless they can promote the transformation of the manufacturing industry, and the evolution of the society towards a greener and more inclusive direction,” Ma said.
The speech Ma provided at World AI Conference was not exclusive to blockchain technology but rather three technologies which most major conglomerates and governments consider to be the building blocks of the fourth industrial revolution.
The manufacturing industry of China alone is valued at around $3.1 trillion, with the US and other major economies operating multi-trillion dollar manufacturing sectors as well.
Over the past decade, especially in the past three years, the industry of smart manufacturing has grown exponentially, as conglomerates have begun to explore various innovative ways to cut back costs and improve the efficiency of the manufacturing process with emerging technologies.
As such, the manufacturing process of most hardware and machineries have drastically changed in recent years, with companies moving towards automation and the usage of robotics to eliminate manual errors and speed up existing operations.
Since the emergence of the concept of applying decentralized systems to a variety of industries in early 2016, many blockchain consortia and development firms have established their focus on utilizing the blockchain to rebuild supply chains.
Specifically, conglomerates and consortia such as Hyperledger and Ethereum Enterprise Alliance (EEA) have developed both private and public blockchain-based systems to deploy supply chains of large-scale corporations on top of an immutable network.
In terms of scalability and adoption, blockchain technology is still at its infancy, with public peer-to-peer networks currently being able to handle around 10 to 50 transactions per second. With second-layer scaling solutions and innovative consensus algorithms, the scalability issue of blockchain technology can be addressed, which will allow developers to create systems to target some of the largest industries in the world like manufacturing with decentralized protocols.
Apart from finance, manufacturing remains as the biggest market which emerging technologies can target. AI, IoT, and blockchain have been used to a certain extent in the manufacturing sector but not have not demonstrated their full potential.
According to Ma, if the blockchain can be used at a large-scale as the primary data processing technology and decentralized database by companies in the manufacturing industry, then decentralized systems will see true mainstream adoption outside of the realm of finance.
Can it Happen?
Currently, there are Ethereum-based projects like VeChain, WaltonChain, and proof-of-stake networks like Cardano and EOS that would allow developers and companies to build applications on top of the blockchain to promote the transformation of the manufacturing industry.
The difficult aspect of implementing decentralized systems in the manufacturing sector is that both developers and conglomerates have to acknowledge the fact that the blockchain, at least in its early phase, will be more inefficient and impractical than centralized platforms.
This article was first published on MoneyCompass.