How Can Business Leaders Prepare For The Impact Of Web3?
Founder Institute SEI, Founder Revexpo Consulting, CEO Softhread, previous President Detect Genomix, Digital Strategist, Ethicist, Innovator
We are currently experiencing the transition from the fourth industrial revolution to the fifth. I believe a large-scale digital transformation process will profoundly reshape the global business ecosystem and impact our economy. The global technology landscape is evolving rapidly, with converging technologies triggering an evolution from web 2.0 to a trustless and permissionless Web3. Forward-thinking business leaders must be well prepared if they wish to retain a competitive advantage in their industry. Business leaders will face several challenges, as well as opportunities in their Web3 adoption journey.
While this next-generation internet is powered by blockchain and artificial intelligence tools, its impact is amplified by virtual, augmented and extended reality. In addition to the basic application, protocol, network and infrastructure layers, it also includes a complex set of services and on-demand components such as digital identities, wallets, oracles, smart contracting, off-chain computing and edge computing to mention a few. In addition to being ubiquitous, offering enhanced peer-to-peer networking and enhanced connectivity, it is also unique due to its semantic analysis capabilities.
The Web3 economy is driven by several key factors, and among those that have attracted the greatest attention from investors, businesses and consumers are digital currencies and assets, decentralized finance systems, nonfungible tokens (NFTs) and more.
The global digital transformation market is expected to reach $16.8 billion by 2027 according to a recent report published by Skyquest Technology. Similarly, Markets and Markets projects that the global metaverse market will grow from $61.8 billion in 2022 to $426.9 billion by 2027 at a CAGR of 47.2%. Even more impressive is the estimated growth for Web3 as per a recent analysis produced by Emergen Research, which reveals that it is expected to register a CAGR of 43.7% during the forecast period and be valued at $81.5 billion in 2030.
Novel and inter-dependent ecosystems are having a catalytic effect on the economy as they have created new business and marketing models and have demanded new funding mechanisms. The accelerated adoption of emerging and frontier technologies, omnichannel marketing and e-commerce are only a few key drivers of an increasingly global digital- and creator-economy. There are numerous Web3 economic indicators, and most of them have shown an upward slope, such as the increased number of converging technologies deployed in novel products or services, increased numbers of digital payments, increased digital assets transactions, increased investments and increased mergers and acquisition. Over the last decade, global venture capital invested in Web3-enabled companies has been staggering, and the calendar year 2021 has recorded the highest number of deals, highest value and has generated the highest number of unicorns.
Privacy and cybersecurity are some of the most frequently cited concerns during large-scale novel technology adoptions. We also continue to experience a lag in regulatory and legal frameworks to adapt to Web3-related technology and consumer rights changes. While we have witnessed increased advocacy for ESG-consciousness, we continue to lack robust metrics that adequately measure short- and long-term impact. Last but not least, the cost remains high and many small or medium-sized businesses will likely struggle to survive in this new Web3-powered global business ecosystem.
Technology leaders are already working on creating standards, developing best practices and designing novel key performance indicators suitable for this new, immersive technology-enabled ecosystem. If we engage in global collaboration, Web3 could facilitate the democratization of data and create zero-trust environments for global data exchanges, promote social entrepreneurship, and increase financial inclusion and digital inclusion, facilitating economic growth for small and medium-sized businesses. Furthermore, it could help us create a culture of digital ethics and cyber-resilience. In my view, proactive alignment with the United Nations Sustainable Development Agenda and a focus on human rights will be critical for long-term business success. Some experts are calling for a bill of digital rights and a digital code of conduct customized for a decentralized, trustless, permissionless, ubiquitous and highly collaborative Web3-powered society.
Several nonprofit organizations have recognized the need for establishing a global governance system for Web3. For example, the Web 3.0 Technologies Foundation “aims to deliver a decentralized and fair internet where users control their own data, identity and destiny.” The United Nations Interregional Crime and Justice Research Institute (UNICRI), through its Centre for Artificial Intelligence and Robotics, is forecasting a new world and cautioning people about the potential negative societal consequences.
In the near future, I think we could envision digital citizens using digital wallets in smart cities using the third-generation semantic web and applications that will be powered by artificial intelligence, and leveraging edge or quantum computing, 6G networks or other frontier technologies. Future generations could have financial, health or legal digital twins managing their businesses, and education, work and entertainment could perhaps solely occur in the omniverse or the future-verse.
Preparing For The Future
It’s important for business leaders to brace themselves for several challenges during the transition from web 2.0 to Web3, which many expect to be significantly more disruptive than the transition from web 1.0 to web 2.0. So, how can business leaders prepare for Web3? Here are five steps business leaders can take to facilitate their transition toward Web3:
1. Complete a thorough feasibility analysis, which should include regulatory, business and technology infrastructure perspectives.
2. Optimize your existing processes by using techniques like the Lean Six Sigma or Kaizen methodologies prior to transitioning to Web3.
3. Train your team in design thinking methodology.
4. Harmonize your Web3 strategy with your existing enterprise strategy.
5. Design customized Web3-specific KPIs.
Leading companies can contribute to the successful large-scale adoption of Web3 by engaging in a few key global collaborations, such as revising laws and regulatory guidelines, designing novel standards, creating best practices, ensuring interoperability, training their workforce in skills required for a Web3-powered ecosystem, building a strong culture of digital ethics and developing a robust cyber-resilience program that can dynamically adapt to the novel demands of the Web3 era.
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