Years ago, the American economist Robert Solow blasphemed: “The computer age can be seen everywhere, except in productivity statistics.” While labor productivity growth from the 1970s to the mid-1990s was still around three percent, productivity growth since the mid-2000s has been below one percent. But what is the reason for this paradoxical development? One of the main reasons is the continued lack of innovation.
Real-Time Economy is an environment where all the transactions between business parties are in digital format, increasingly automatically generated, and completed in real-time from business and IT-processing perspectives. For enterprises, public sector, and citizens this means, for example, that orders, order confirmations, invoices, and payments flow from system to system without delays. The concept of Real-Time Economy was created by the University of Aalto in Finland at the beginning of the milennium.
At that time Estland developed an national RTE platform called X-Road. 52,000 organizations now use X-Road and have processed 1 billion transactions this year, saving 844 years of working time alone in Estonia. Today, X-Road is implemented in Finland, Kyrgyzstan, Faroe Islands, Iceland, Japan and other countries. Similar technology that is based on the Estonian interoperability experiences has also been implemented in Ukraine and Namibia.
Blockchain is now a mature technology for global (standardized and decentralized) RTE solutions. This forms the basis for cooperative value creation processes of peer-to-peer partners. Using seamless processes, across companies and borders, it´s possible to increase productivity, save time and money and achieve better scalability.
The benefits for companies and society at large are enormous – both in terms of productivity and environment.
Numbers from finish government are impressive: e-invoicing saves 3.1 bn, e-accounting 0.2 bn, VAT reporting 0.4 bn and e-receipts save 0.8 bn (€ p.a.).
Multiplication with 70 gives an estimate for EU-level cost savings (for this part a total of 15 bn € p.a.). An increase of several percent of the gross domestic product (productivity) is possible with RTE.
It is very important that every participating party can trust the system and all the other participating parties. The only technology that meets these requirements today is the Blockchain, with Digital Assets (Tokens), Trusted Identities (SSID) and Smart Contracts. That is the reason for the synonyms “Network of trust” and “Value chain”.