Blockchain: A technology for the social economy

Written by Giuseppe Guerini on 26 April 2019 in Opinion
Opinion

Blockchain has the potential to revitalise social economy organisations, but we must ensure we democratise it, writes Giuseppe Guerini.

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The hearing being held at the EESC on 29 May will be an opportunity to address the question “Can blockchain technology be an ideal infrastructure for the social economy?” We are convinced that the answer is yes.

Social economy organisations can play an important role in helping European society as a whole cope with the important transformations that new digital technologies are bringing in all sectors that impact our social, economic, political and cultural lives.

We believe that it is important to promote a framework of rules that is capable of encouraging positive collaboration between public administrations, organised civil society and economic and entrepreneurial systems.


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This will be vital in allowing the proper development of the benefits of blockchain technologies.

By finding the right balance we can achieve positive social, cultural and regulatory convergence, which are important in creating the best opportunities for improving services in both public and private sectors and increasing accessibility to new technologies for all citizens and social actors.

If this is our shared goal, then blockchain technology seems a particularly appropriate tool for restoring a decent level of trust in the context of an increasingly globalised and depersonalised digital economy.

Social economy organisations can use this technology to keep rendering the economy more democratic, but also to apply it in a more efficient way so that they become the protagonists of an accessible and inclusive “digital social economy.”

“Blockchain technology seems a particularly appropriate tool for restoring a decent level of trust in the context of an increasingly-globalised and depersonalised digital economy”

We have all observed how much the financial crises and the globalisation of the economy have greatly weakened citizens’ trust in public institutions and, above all, in the institutions of economics and finance.

Trust has become a scarce resource. We need to rebuild trust in these institutions and the economy on a new basis.

Positive use of new technologies by social economy organisations - from artificial intelligence to blockchain - offers an approach with great potential.

Social economy enterprises, which are widespread and rooted in the territories, can play an important role in guiding and supporting the widest dissemination of opportunities among European citizens.

They can contribute positively to promoting a strong ethical and value convergence between the social economy and blockchain technologies.

This convergence is essential to ensure that the opportunities offered by new technologies are aimed at securing benefits, access, transparency and participation for all, not restricted to a new ‘digital elite’ that knows how to use and govern new technologies while locking out the majority of citizens from the benefits of the innovation.

According to our observations, the operational applications of blockchain technologies can significantly improve the performance of social economy organisations, with benefits for them, their members and above all the users of their services.

“The operational applications of blockchain technologies can significantly improve the performance of social economy organisations”

It is equally clear, however, that the profound changes brought about by new technologies must be accessible and oriented according to a system of values that protects citizens and workers for whom adequate training and updating plans must be in place.

Blockchain technology will have a significant effect on the labour market.

Some jobs will disappear, others will change substantially, while others may be maintained or may evolve.

It is therefore important for workers to be adequately protected, particularly through adequate training plans that allow continuous updating of skills and competences.

It is clear that blockchain technology can bring enormous positive development opportunities.

However, it is important to highlight the “impossibility of modifying” the data recorded via the blockchain.

Drawing attention to a review of public regulations is crucial so that we can still ensure that the application of blockchain technology is carried out in compliance with the rules governing the processing of personal data (“GDPR”) with particular reference to the so-called “right to be forgotten”.

For this reason, the European institutions will have to ensure that the rules in force on these issues are continuously adapted to match the rapid pace of technological change.

The enormous potential of these new digital technologies and the high cost of the necessary investments also expose the blockchain technology to the risk of concentration of the devices capable of making it work properly.

Alongside the potential for democratisation of the network, there are the risks of speculative data hoarding, and of technological networks ending up in the hands of the few stakeholders capable of making large investments.

For this reason, public interventions are crucial in supporting the participatory and accessible development of these technologies.

The European institutions are expected to know how to keep in step with progress in technology - it is a fundamental requirement for ensuring a sustainable and incisive development of these technologies in the future, with a central role of Europe’s rules and vision - one of the few that can continue to protect economic democracy and the ethical orientation of innovations.

About the author

Giuseppe Guerini is EESC rapporteur on blockchain

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