Shanghai, China
Emerging markets are home to 86% of the world’s millennials.
In fact, China and India host more millennials combined than the entire working population of the US and Western Europe.
And they are a skilled demographic to be reckoned with.
According to a Goldman Sachs report, people born in China in the 1990s are 31% more likely to graduate than their parents.
Despite a young tech-savvy workforce budding with entrepreneurial spirit, emerging markets struggle to gain traction due to volatile financial markets and unreliable infrastructure.
Blockchain is setting the world on fire, transforming every industry it touches and redefining how we understand technology.
It will foster innovation and ideas everywhere, but nowhere more than in emerging economies.
This is because blockchain provides a platform of trust and credibility that is difficult to tamper with.
It has the ability to identify and verify the 1.1 billion individuals with no documents, many of which in emerging markets, and inject them into the world economy.
Emerging economies are using innovative technologies like blockchain to speed up their development and cement their place as industry pioneers.
They may seem at a disadvantage with their lacking infrastructure, however, it’s easier and less expensive to build the latest tech on a clean foundation than it is to replace the old and outdated.
Blockchain technology can be compared to the smartphone boom in emerging markets, where countries “leapfrogged” over fixed-line telephones.
And this rapid development has been replicated across the world.
Kenya overcame a lack of banks not by creating more, but by adopting mobile payment services. By banking the unbanked, Kenya spurred a payments revolution that raised 194,000 Kenyans from poverty.
Sugarcane production in Brazil
While developing countries wean themselves off fossil fuels, Brazil is skipping the “developed” progression of petrol as a fuel source by creating ethanol through sugarcane production.
And at the other end of the world, China is investing in renewable energy with their “Solar Valley.”
Blockchain can help stabilize emerging economies, and incentivize foreign investors to work in these financial markets.
In industries like finance and humanitarian aid, it replaces middlemen that are susceptible to corruption, or may take a cut for their services.
Don Tapscott, co-founder of the Blockchain Research Institution, views today’s financial system as “a kludge of industrial technologies and paper-based processes dressed up in a digital wrapper.”
Financial institutions are barely keeping up with the pace of technology, and with each misstep comes a devastating economic impact.
This is especially true for emerging economies lacking the infrastructure and technology that most nations are built upon.
Despite insufficient resources, emerging markets have enormous potential, with low-cost labor, abundant resources and untapped industries ready for investment.
What holds them back is their high risk. Corruption, fraud and antiquated bureaucracy keep potential business partners looking elsewhere.
Blockchain bolsters emerging economies on multiple fronts. It decreases corruption by providing a clear and transparent platform for tracking payments and assets.
Plus, it cuts unnecessary costs that could be better used elsewhere.
Remittances are one of the largest form of capital inflows for emerging economies. According to the Overseas Research Institute, 12% of every $200 sent in 2015 went to banks and other financial institutions.
United Nations General Assembly
Sending humanitarian aid has always been an affair, with countries stopping their contributions upon learning that their donations are being taken by tyrants.
Blockchain allows donors to trace payments as they travel, ensuring they don’t fall into the wrong hands.
Disberse, which is supported by over 40 humanitarian groups, tested their program by watching money as it moved from a school in the UK to four schools in Swaziland.
And in Jordan’s Azraq camp, Syrian refugees are using iris-identification technology to purchase groceries and supplies, with the money traveling along a blockchain-based system.
This idea came after the World Food Programme noticed they were paying local banks millions of meals worth of fees. Blockchain reduced 98% of that cost, allowing them to serve more for the same price.
It has also inspired companies like Microsoft to work with non-profit organizations on ID2020, a mission to provide legal identity to the 1.1 billion people who lack one.
Getting a job usually requires financial and government records. With blockchain, citizens have a cyber wallet that follows them where they go.
Blockchain helps provide digital documentation that can’t be lost or stolen, and has led Dubai to run all government documentation through it by 2020.
The possibilities of this are endless. The blockchain could be used to verify an individual’s age, education, lineage, even their professional experience.
Blockchain technology is reinventing the way that people understand finance, security and transparency. But for emerging economies, it’s changing lives.
Our world has never witnessed a technology singlehandedly alter industries in such a way.
Providing these budding countries with the resources and technology they need to succeed will drive innovation and globalization to new heights.