The biggest barrier to adoption of Blockchain at a massive scale can be clashes within the ecosystem, rather than fierce competitions with rapidly emerging technologies. McKinsey’s report mentioned that the “co-opetition paradox” between industry competitors is threatening for the growth of blockchain. Despite major tech giants tapping in the blockchain pool, the technology suffers massively from the vice of unstructured experimentation.
Co-opetition or “co-opertition” is a new expression to illustrate the act of cooperative competition between competing companies, highlighting the “petition”-like nature of joint work. This type of insightful collaboration of various businesses with suppliers, customers and firms, gives an edge over the regular competition.
Although, Blockchain can be a short-term solution to reduce operational costs for individual businesses dramatically, radical alteration and widespread transformation still rests in the hands of members, teamed together for establishing common standards. The process could even take three to five years to materialise.
The competitors need to step down and cooperate to solve the co-opetition paradox, which is a major roadblock in the path to adoption. The distributed ledger technology requires a unanimous view on managing the entire process. Overcoming this battle requires a regulator to take the lead. It is of prime importance that there is alignment between the strategic incentives of the players. The task can be challenging to complete owing to the highly fragmented markets.
The companies are urged to take a structured approach in their strategies by utilising market position with consideration of measures such as the capacity for shaping the ecosystem, establishing standards and addressing regulatory barriers.
With a suitable strategic approach, companies can extract value in the short term. Dominant players can easily establish blockchains as market solutions and should play big games now. The paradox will subside in the upcoming years paving the way for Blockchain to be adopted at much larger scales, rather than only startups and tech giants tapping blockchain power.