Tokenization als aanjager van autonome economie in Industrie 4.0. 

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In the middle of all the hype around tokenization, it might be difficult to understand why moving real and digital assets to blockchain is seen as nothing short of a financial revolution or Industry 4.0, which is set to dramatically transform businesses and fuel the autonomous economy.

In this article, we will examine the fundamentals of tokenization and how it is paving its way to mass adoption in the wake of Industry 4.0. Whether it’s in the current world, one of our many screens, or a metaverse of our choice, what we’re going to see is more avatars without people operating them, kiosks that serve us, and digital services that know more about us based on data and preferences. The question is, how do businesses need to adapt to embrace the dynamically changing new economy? What to expect and what is unavoidable in the end? 

The dominance of intangible assets

Before delving into current technological breakthroughs, it is critical to consider the outcomes of all past industrial revolutions. The capacity to predict the implications of the Fourth Industrial Revolution is crucially dependent on one’s acquaintance with history. In each of the three preceding industrial revolutions, a confluence of distinct but related technical advances dramatically boosted production while drastically decreasing the amount of resources (workforce, time, and materials) required to generate it. Not only did these innovations change the economy, but they also changed the way people thought about their daily lives. 

During the past periods, the main types of assets we observed were tangible, financial, and intangible ones. Equities, bonds, property, foreign currency, and commodities are still playing a dominant role in the industry, holding the most value compared to other classes. As for the intangible assets, we can see that, for the first time in the last several decades, they have shifted from the supporting role of the tangible ones into a key argument for investors. Now they form more than 80% of all enterprise value in the S&P 500 companies, in contrast to just 17% in the 1970’s. It mostly relates to highly technological and digital-oriented businesses. 

Technologies components of the autonomous economy

The advancement of civilisation is propelled by breakthroughs in technology and new ideas. The growth of widespread automation is a key factor in the technical trends that are driving the fourth industrial revolution. 

So, what does this mean? The Autonomous Economy is not about the end of the human economy. However, robotics might replace manual labor and data management, AI-enabled smart contracts might replace intellectual work, and other Industry 4.0 capabilities such as digitalization and tokenization will completely transform businesses and all everyday interactions between businesses and individuals. A human-led economy won’t go away anytime soon, but a machine-led, digitized economy is emerging alongside the traditional one. The present industrial revolution is converging on a handful of technical advances that have historical parallels, including the internet of things (IoT), artificial intelligence (AI), and distributed ledger technology (DLT). Therefore, the economy of “Industry 4.0” is the “Autonomous Economy” concept, which is currently driven by all these technological advances. 

What is Tokenization and how does it enable the business to grow?

Believe it or not, Industry 4.0 is already with us: the most advanced areas of business have already adopted the components of a new financial ecosystem, and in the coming years, even the most conservative organizations will be forced to either switch to the new economic principles or pass away. So, why are the opportunities that tokenization offers so important right now? And why is Industry 4.0 driven by tokenization? 

Tokenization is the process of converting the ownership of physical or digital assets to blockchain-based tokens. Fiat currencies, equities, shares, real estate, oil barrels, gold bars, and even copyrights to works of art, music, or literature are just a few examples of the assets that might be tokenized. The idea of tokenization, or the conversion of any type of value (physical or digital) into digital assets, is growing in popularity among business owners for good reason. While tokenization serves many purposes for businesses, it may be particularly useful for those seeking alternate sources of investment and expansion. Consider the following scenario: someone wishes to make a real estate investment and purchase a property. However, the property is prohibitively expensive. Most people may not be able to pay hundreds of thousands of dollars in full or in part for a piece of real estate. Tokenization enables any individual to buy a piece of it with as much money as they can afford in order to meet their goals. 

It is unimaginable how giant the gap between small and medium-sized businesses’ underfunding is. There are approximately 400 million small and medium businesses around the world that underpin almost 90% of the global economy. Over 50% of SMEs face financial challenges. Amongst the most prominent challenges are paying operating expenses and investment for further business development. Despite the availability and diversity of numerous financial instruments (VCs, angels, IPOs, loans, etc.), the global problem of underfunding is still huge. According to IFC data, the unmet financing needs of micro, small and medium enterprises in developing countries are about $5.2 trillion every year. 

How to prepare for industry 4.0

Hand-in-hand, all these technological trends make tokenization the perfect factor to propel economic growth. Existing businesses should be capitalizing on this by focusing on these three key areas: 

Conduct an internal audit of all their assets to identify which could be potentially tokenized. 

Redesign internal tech infrastructure to be ready to comply with blockchain technology and participate in the evolving digital asset market. 

Choose a reliable provider of comprehensive asset tokenization services who can ensure the full cycle of tokenization. 

Businesses must be open, adaptable, and flexible to cope with all the current changes. The most important thing is to be ready to scale, embrace new technologies, and remember that accepting changes and adapting to them are the most valuable skills in the dynamically changing environment of today. 

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Evgen Verzun

Oprichter van Kaizen.Finance