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Skills, Capability and Innovation

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‘It is vital Australia and our tech companies stay ahead of the game in one of the world’s fastest growing technology sectors.’ (Senator the Hon Simon Birmingham, Minister for Trade, Tourism and Investment) [25]

The success of blockchain in Australia will depend, in part, on industry and government addressing key skills requirements. There is a need to build the skills-base that can translate into the capability that drives innovation and helps blockchain reach its potential.

The skills of technology investment decision-makers—in businesses and in government—also need attention. One of three key findings from the Australian Institute of Company Directors (AICD) Driving innovation report was that ‘Australian boardrooms have low innovation and digital literacy levels’: that only 3% had science and technology expertise and only 35% said their board had the right skills and experience to assess both the ethical and practical implications of modern technology. [26]

Department of Industry, Innovation and Science research shows that the average Australian firm scores poorly on a measure of digital management capability, at a rate consistent with having only one out of eleven digital management practices in place. [27] Some examples of good digital management practices include:

  • including information and communication technology in the business’s strategic plan
  • approving investment in new digital technologies
  • introducing new training programs for staff

Skills

Foundational and specialist skills

Information, communications and technology (ICT) skills are essential to developing an effective skills base for advancing blockchain technology. Australia’s percentage share of tertiary graduates with ICT qualifications in 2017 was just over 4.1%, which was around half that of Singapore (8.2%) and lower than New Zealand (6.7%) and Finland (6.3%) for the same period. [28]

Demand for blockchain-skilled workers is substantial, [29] with rapid growth in blockchain-related job advertisements since 2016—notably an increase between 2017 and 2018 of over 300%, which significantly outstrips supply. [30]

Figure 4: Number of blockchain-related online job advertisements in Australia [31]

Given Australia has around 470,000 people with potentially relevant digital and ICT skills, [32] an opportunity exists for Australia to develop a solid cohort of blockchain-proficient professionals—provided the appropriate blockchain-specific training is made available.

Australia is already developing the means to address this need, with a number of Australian universities taking the lead in developing modules and courses which specialise in blockchain. [33] A number of online courses, including courses offered by established universities, are also currently available. [34] Furthermore, the Australian Government continues to support initiatives to increase proficiency among young Australians in core science, technology, engineering and maths (STEM) skills, so that in the future they will have the requisite capabilities to engage with and drive the technologies that will underpin Australia’s productivity. [35]

Case Study: RMIT & Singapore

In 2018, RMIT piloted a blockchain-focused course with a number of schools across Singapore. The success of this pilot has seen RMIT’s short course, Developing Blockchain Strategy, included in Singapore’s SkillsFuture list of training for mid-career professionals. [36] The course provides skills for understanding, applying and assessing the value of blockchain technology for your business, as well as for engaging with technical, legal and regulatory issues. [37]

Improving blockchain literacy

A lack of familiarity with blockchain and its potential, along with concerns about the level of hype associated with new technologies, may unduly limit industry and policy decision-makers’ appetite for engaging with blockchain. Education of decision-makers is key to ensuring that government and businesses are able to identify the right use-cases for blockchain.

There is also a need for appropriate legal advice, which requires legal professions to engage with and understand blockchain technology and its implications, both in itself—for example, data retention—and in its practical applications—for example, smart contracts. The demand for blockchain-related legal services in Australia has already seen law firms such as King & Wood Mallesons, Herbert Smith Freehills, Piper Alderman and Hall & Wilcox provide advice regarding blockchain in an Australian context, with several providing initial guidance online.

Fostering research, development and innovation

Government use of blockchain

The Digital Transformation Agency (DTA) undertook a discovery in 2018 examining the potential of blockchain for government services. [38] The discovery found that blockchain was still an emerging technology and that agencies should focus on the business problem that needed to be solved, rather than go straight to a technical solution issues. The DTA recommended that:

Agencies should continue to monitor blockchain developments and look for opportunities to enhance service delivery, which this technology may unlock in the future.

Since that time, some government use cases have been explored using blockchain technology.

IP Australia co-leads the Committee on World Intellectual Property Organization (WIPO) Standards Blockchain Task Force which is exploring the potential of blockchain technology for the IP Rights ecosystem. The taskforce comprises over fifteen member states and is undertaking standardisation activities—leveraging Standards Australia’s work on ISO standards for blockchain—including the development of guidance and recommendation documents on terminology, definitions and the technology itself; use-case determination; and best practice approaches to support IP offices, IP professionals and industry.

Case Study: IP Australia & IP Rights Management

In 2017, IP Australia collaborated with Australian blockchain start-up Civic Ledger to assess blockchain’s potential for the IP system and for streamlining existing processes. The trial explored how to digitally represent and process IP rights on a blockchain, with smart contracts to test the registration, amendment and the direct transfer of tokenised patents from an owner to another party. Fourteen patent processes were developed as smart contracts—emulating patent life cycle events—and involved the tokenisation of over 50,000 patents.


A supplementary stage of the trial built a concept marketplace to undertake the execution of patent licencing between two parties. The concept was built around green technology patents with a prototype user interface which allowed a user to browse available patents, request and buy a patent licence, and allowed the patent owner to authorise the request. The IP Rights Registration and Exchange Protocol (IPRx) was developed as the framework for the concept, supported by smart contract modules. The key focus was to design a concept with emphasis on representing a patent market ecosystem that leverages tokenisation and decentralisation to create new economic opportunities.

Case Study: Perth Mint Gold Token [39],[40]

In October 2019, the Perth Mint, the world’s largest refiner of newly-mined gold, announced it had partnered with leading precious metals digitisation company Infinigold to establish the blockchain-based Perth Mint Gold Token (PMGT).

PMGT is digitised gold that allows users to conveniently acquire and have entitlement over government-guaranteed physical gold stored at The Perth Mint in a trusted and cost-effective way. It offers institutional investors a competitive alternative to traditional gold products such as gold Exchange Traded Funds (ETFs), with the additional benefits of real-time trading and settlement enabled by blockchain technology. Subject to final regulatory consultation, PMGT will become directly tradable against traditional gold products, including gold ETFs, CME gold futures, and physical XAU.

With PMGT, InfiniGold and the Perth Mint are leading the transformation of gold into a multi-billion dollar digital asset. In the two weeks following PMGT’s launch in October 2019, over 1,400 investors had registered for new digital accounts.

Perth Mint is the trading name of Gold Corporation, which is wholly owned by the Western Australia government.

Research and development into the technology

Australian research has been leading in areas of blockchain. For example, CSIRO’s Data61 is one of the world’s top blockchain research organisations and has authored five of the 30 most-cited blockchain research papers globally.

Data61 is designing blockchain-based systems for different industry applications and assessing their trustworthiness. Data61’s capabilities include designing software systems with blockchain as a component; analysing and improving trustworthiness of blockchain to better understand the guarantees and limitations of different protocols; researching human behaviour and patterns of use and misuse; and developing smart contracts.

In addition, the RMIT Blockchain Innovation Hub (BIH) is the world’s first research centre on the social science of blockchain. The BIH was established at the end of 2017 within the College of Business. Bringing together economics, sociology, public policy and political economy, the BIH provides a new way to understand the global blockchain evolution. The BIH has established RMIT as a global leader in blockchain research, education, and impact.

A number of other Australian universities are undertaking research into blockchain, such as the University of Sydney, which is developing the Red Belly Blockchain (see the Red Belly Blockchain case study below).

Swinburne University has established a Blockchain Innovation Lab, focusing on delivering strong research outcomes and supporting industry growth regarding blockchain in areas such as blockchain architecture, smart contracts, applications and proof-of-concept, performance and efficiency as well as security and privacy. Swinburne University is also partnering with ArtChain Global on a blockchain-based system for the registration, trade and protection of artwork. [41]

Similarly, Monash University has established a Blockchain Technology Centre to explore and develop blockchain technology and introduce relevant blockchain content into cross-faculty curriculums. [42] Their blockchain research is addressing issues such as anti-money laundering in cryptocurrency, enhancing blockchain-enabled supply chains, privacy and security, [43] as well as facilitating information exchange between blockchain and non-blockchain networks. [44]

Scalability

A significant challenge for blockchain is scalability. The data and energy-intensity of some blockchains has been flagged as a potential barrier to scaling the technology in a way that could allow its application to a range of tasks and processes. For example, blockchains such as Bitcoin and Ethereum support transaction rates of roughly seven and 20 per second respectively, which compares unfavourably with Visa’s rate of 56,000 transactions per second. [45] , [46]

Australian innovation, however, is proving that even this significant hurdle can be overcome, with Red Belly Blockchain completing 30,000 transactions per second in large-scale experiments.

Case Study: Red Belly Blockchain [47]

Red Belly Blockchain is a technology from the University of Sydney and CSIRO’s Data61 that addresses key challenges for blockchain platforms, such as the slow responsiveness of blockchain transactions and the low rate at which blockchain-based transactions can be executed. Awarded an Australian Research Council grant of $855,000 in 2018, the Red Belly Blockchain has already demonstrated significant potential, achieving a transaction response time of about 3 seconds compared with Bitcoin’s 10 minutes, and a transaction rate of 30,000 per second in large-scale experiments, compared with Bitcoin’s seven. In doing so, Red Belly Blockchain has overcome one of the most notable obstacles to scaling the technology, opening the way to blockchain being applied more broadly within the finance sector and expanding into the agricultural and education sectors. [48]

Footnotes

[25] Advancing Australia's blockchain industry

[26] Driving innovation: the boardroom gap

[27] Development of management capability scores

[28] Source: UNESCO Institute of Statistics

[29] (external download) Blockchain challenges for Australia: An ACS Technical White Paper (333KB PDF). Website: Australian Computer Society

[30] (external download) Blockchain 2030 - A Look at the Future of Blockchain in Australia (10MB PDF). Website: Australian Computer Society - publication overview

[31] Data61 analysis, Source: Burning Glass Technologies, (external download) Blockchain 2030 - A Look at the Future of Blockchain in Australia (10MB PDF). Website: Australian Computer Society - publication overview

[32] (external download) Blockchain 2030 - A Look at the Future of Blockchain in Australia (10MB PDF). Website: Australian Computer Society - publication overview

[33] (external download) Blockchain 2030 - A Look at the Future of Blockchain in Australia (10MB PDF). Website: Australian Computer Society - publication overview

[34] (external download) Blockchain 2030 - A Look at the Future of Blockchain in Australia (10MB PDF). Website: Australian Computer Society - publication overview

[35] Support for Science, Technology, Engineering and Mathematics (STEM)

[36] Regional expansion: RMIT and Singapore focus on future skills

[37] RMIT online: Developing Blockchain Strategy

[38] DTA blockchain

[39] Media Release: InfiniGold to launch the Perth Mint Gold Token

[40] Media Release: Perth Mint Digital Platform Attracts New Investors

[41] Blockchain Innovation Lab

[42] Blockchain Technology Centre research projects

[43] Blockchain Technology Centre research projects

[44] What is Hcash?

[45] (external download) Blockchain 2030 - A Look at the Future of Blockchain in Australia (10MB PDF). Website: Australian Computer Society - publication overview

[46] IOUs go mobile: bringing peer to peer payments into the digital age

[47] The Accountable Blockchain

[48] Australian Financial Review: CSIRO and Sydney University Create Superfast Blockchain, 25 August 2018