ADDRESS TO THE APAC BLOCKCHAIN CONFERENCE

No gathering that thinks about  the future can neglect to recognise where we’ve come from, so I’d like to begin by acknowledging the traditional owners of the land on which we meet and pay respects to elders past and present.

 

Many thanks to the Australian Digital Commerce Association’s invitation to speak today. I am also glad be at this event with Greg Medcraft who has contributed so much in this space and I understand is also speaking later today.

 

 

I appreciate the chance to join you here, as you push the nation to embrace a broader adoption of Blockchain.

 

Over summer I had the chance to do what many of us enjoy: reading those books we’d said we’d find time for and didn’t.

 

One such book for me was Steven Johnson’s Wonderland, which examines the role of entertainment, leisure and game development in innovation.

 

Johnson doesn’t just reinforce the appreciated understanding that one idea helps vault another - but talks about the “hummingbird effect”:

 

“...the process by which an innovation in one field sets in motion transformations in seemingly unrelated fields”.

 

At its’ core, the book:

 

“... is an extended argument for that kind of clue: a folly, dismissed by many as a mindless amusement, that turns out to be a kind of artefact from the future.”

 

I was thinking of that quote when reading a discussion between Lord Meghnad Desai - who I understand is speaking today - and one of Australia’s leading financial journalists Alan Kohler.

 

During their discussion for online publication The Constant Investor, Kohler refers to the rather understated view of economist Nouriel Roubini:  that Blockchain is the most overhyped technology ever and most economists weren’t taking it seriously.

 

At which point, I’ll predictably reach back in time for that the awkward observation of another economist - Paul Krugman - who believed that the internet would have as much impact on economies as the fax machine.

 

The blurred image of Bitcoin and Blockchain representing the same thing  - understandable when considering their initial joint evolution - is probably the biggest impediment in any commonplace discussion about Blockchain now.

 

Lord Desai made a range of observations in that chat with Alan Kohler.  These two stood out. First, that:

 

“...one has to separate out bitcoins and cryptocurrencies from Blockchains.  Blockchain is a technology, bitcoins are the way people use them.”

 

Second, in something that is related more to business motivations to embrace Blockchain, he remarked that with a:

 

“...distributed ledger, you have identical information and nobody can singularly alter it.  Those are the two big advantages of Blockchain as far as I can see.”

 

Having been dismissed in its early days as too niche or far-fetched to yield anything of worth to modern economies, you can tell that Bitcoin’s bedrock - the distributed ledger we refer to as Blockchain - is increasingly catching the eye of governments.

 

No doubt largely reflecting an embrace of the potential identified within that second observation by Lord Desai.

 

Or, as a leading thinker on this subject - Andreas M. Antonopoulos - put simply in relation to the emerging benefit that’s spun out of Bitcoin’s development of Blockchain:

 

“These new systems have created a way to have a trusted transaction between two people who don’t trust each other without the need to involve a trusted third-party.”

 

Blockchain applications are being actively contemplated by public officials sitting in offices from Dubai to Chicago to help improve the way that government meets the needs of the public.

 

For example Dubai’s Roads and Transport Authority (RTA) has announced plans to launch a Blockchain-based vehicle lifecycle management system in 2020.

 

Last week the European Commission released its “Action Plan”, designed to develop an EU-wide regulatory framework for fintech, including Blockchain.

 

At the recent Chinese People’s Political Consultative Conference, which links closely to the country’s legislative arm, discussions around the potential of Blockchain was omnipresent.

 

And UN Women, a group within the United Nations, is investigating Blockchain to strengthen its humanitarian efforts supporting vulnerable women and girls.

 

So for many of you here, you’re

may be actively wondering how seriously the Australian government takes Blockchain and will it embrace it’s use?

 

While it is clear that we are in the early days of this technology the potential for government to be a user of Blockchain and create efficiency and security where there are currently limitations is significant.

 

The CSIRO has used the example of Australian beef exports using Blockchain or distributed ledgers to prevent counterfeit beef being passed off as Australian beef.

 

Counterfeit food products cost the global food industry an estimated $40 billion dollars per year.

 

If this was expanded out across Australian exports it is possible to envision much more efficiency in many sectors. Not to mention improved quality.

 

In this sense government could become an energetic user of Blockchain, like the many other links in the chains and the system.

 

The CSIRO has also proposed the idea of specialised identity ledgers as a practical approach to managing identity, and associated regulatory compliance, and for facilitating interoperability between distributed ledgers.

 

The government uses a lot of personal information such as for tax, for Medicare cards, for Centrelink payments so there is a strong case for the government to both assure the security of this information, but also to try and make it easier to use for the individual and for society more broadly.

 

But we also need to be cautious, in the same way that the information the government holds and the systems it manages do need to continue to adapt and improve, we must make decisions sensibly.

 

I think at least in the near term government will continue to examine how to set up regulate frameworks governing the potential by-products of Blockchain use, the easiest example being around crypto-currency.

 

For example, where there is a bad actor, say purveying a fraud, the government will continue to focus on regulating against that. Given Blockchain can make it much easier to provide reliable evidence this is likely to become easier.  

 

However I am conscious it is has been said by many people that Blockchain today is at the internet's equivalent of 1993.

 

So speculating about the future form of regulation at this point is not helpful.

 

But I would say that investment in skills and raising awareness and understanding by government is.

 

Coming back to that theme about the government embrace of Blockchain, I can see two broad pathways.

 

The first will be what we’ve seen occur, some agencies - like CSIRO - applying it in particular ways to test the possibility of certain outcomes and considering a wider application.

 

The other will see government collaborating actively with Blockchain’s champions, like many of you here.  Then the question is: how?

 

I spoke earlier about the way some government’s are thinking about - and applying - Blockchain.  But how can we mirror that here? That’s the question.

 

And who or what can help give this form and purpose.

 

Let me put this to you. Consider the emergence of the Australian government’s digital marketplace, essentially an online procurement platform designed to make it easier and cheaper for smaller tech players deliver their products and services to government.

 

As an opposition we’ve welcomed the concept of a digital marketplace, even if the delivery has been scratchy.

 

On the one hand it’s been able to capture and register a lot of interest by SMEs in a short space of time but there have been frustrations.

 

Some firms have said in an Innovation Aus survey they’re not getting anything remotely near the level of work that they expected - given the government hype.

 

But the concept of a platform that brings together the Blockchain community and government, to help accelerate the application of this technology within government, is something that government should be thinking about, better still, acting on now.

 

The government organisation that oversees the operation of the digital marketplace - the Digital Transformation Agency - would seem like the obvious player for this.

 

But the DTA appears to be travelling down a particular evolutionary path that may not lend itself to championing delivery and a practical or novel application of emerging tech.

 

Having had a solid focus on public sector product development and delivery in the past, it seems the DTA is now more focussed on being an auditor; ticking off ICT project costings and management plans.

 

This means there is a gap where government leadership in service development and innovation should be.

 

This is a pity because we need an agency that has attracted outside thinkers and talent to help identify the ways that emerging tech - like Blockchain - can be applied constructively within government.

 

So while Australians are recognised worldwide as being early adopters of technology, it seems at this moment, our government is happy to stand back  - but at what cost?

 

For a beast that is inherently risk averse, you would imagine government would race towards the benefits of applying Blockchain to its processes.

 

This needs to be driven by an agency such as the DTA. The alternative is that adaptation and development takes place inconsistently costing time, money and most importantly, opportunity.

 

I suspect this is what we are facing.

 

And for a government that once prided itself on being agile and innovative, this seems weird ground to be bogged in.

 

I think that government will embrace Blockchain eventually because of the potential it has for good public outcomes. 

 

The potential to make all sorts of services and transactions more affordable, and bring together individuals who have been at the margins into the global economy.

 

I am optimistic about the potential of Blockchain particularly in Australia - and especially if there are a diverse number of people and organisations involved. To quote IBM’s Bridget van Kralingen:

 

“Blockchain will only reach mainstream adoption with the participation of women as builders and users of the technology.”

 

We need the skills of many within our wider population if we want to lead the world, so Bridget’s thoughts are worth bearing in mind.

 

The value of that was demonstrated today. When you heard the words of student Millicent Perkins. Her words were so precise and clear that I wanted to outsource my speech to her.

 

She is reflecting on the broader impact of tech on behaviour.  I’ve often called on people to be enamoured by tech for tech’s sake. What’s it doing to behaviour?

 

You heard Millicent describe a new mindset that focuses less on asset ownership to asset access - to reach outcome faster. Accelerating problem solving.

 

I wish you the very best for the conference.