Global technology consulting giant Booz Allen Hamilton (BAH) report: Blockchain technology is indispensable for the development of the digital economy

Booz Allen Hamilton (BAH), one of the world's top management and technology consulting firms, has written a report stating that blockchain technology is essential and indispensable to supporting and realizing the digital economy in the Middle East.

Middle East is 'rapidly changing'

Titled ‘Blockchain Technology – Can the Digital Economy Thrive Without Blockchain Technology – Can the Digital Economy Thrive Without It ’, the report focuses on the benefits that blockchain technology can bring to various sectors in the Middle East, including transportation, healthcare, finance and startups.

Ramez Shehadi, Executive Vice President and Managing Director of BAH’s Middle East and North Africa Division, said: “The economies of the Middle East and North Africa (MENA) region are experiencing rapid development, with governments diversifying away from their reliance on oil-based assets and using smart technologies to explore new revenue streams.”

The Middle East is seeing growth in all sectors, with BAH noting that Dubai's GDP is expected to increase by $5.5 billion by 2018 due to 'digitalisation'.

Shehadi, who co-authored the report with BAH senior vice president Mahir Nayfeh, noted that digitalization has great potential and implementation needs to be handled with care.

“With opportunities come challenges,” Shehadi explained. “As smart cities emerge to support national development, governments need to be prepared to deal with threats from all sides, from hacktivism to cybercrime, and this is where blockchain can really help governments achieve their digital economy goals while ensuring maximum cybersecurity.”

Naifo is optimistic about blockchain technology’s ability to improve security and transparency in data sharing. “Blockchain can help eliminate the security concerns often cited to explain why data is unwilling to be disclosed, encourage the adoption of data sharing incentives, and promote a community-based ecosystem that determines the value of data at any time.”

The report provides an interesting contrast to a report released by Citigroup last week, which stated in its blockchain research that Bitcoin does not pose a direct threat to traditional financial models.

“In countries without a good payments infrastructure, we believe open decentralized networks like Bitcoin can find opportunities to grow,” the Citibank report said.

Regardless, BAH’s support for blockchain can also strengthen the development of the existing financial industry.

Citi believes the greatest potential for disruption comes from a central bank-issued digital currency, such as the Russian national digital currency currently under discussion, but actual blockchain use cases will rely on integration if they are to gain popular support.

The bank believes that “the potential behind open networks like Bitcoin lies in combining them with other technologies to bring about real innovation.”