A report on the impact of blockchain on the Made in Italy
The European think tank tech dGen has published a report on the role of blockchain technology in the fight against counterfeiting of the Made in Italy.
The non-profit think tank focuses on emerging technologies, including blockchain, and with this analysis has focused on the different solutions that blockchain technology can provide to fashion and luxury brands to prevent the counterfeiting of their products.
Although the Made in Italy is overall the third largest brand in the world, behind Coca-Cola and VISA alone, it was estimated that 88,000 jobs, or 2.1% of the workforce, were lost in Italy in 2016 alone due to counterfeiting. In addition, Italian retailers and wholesalers lost 7.9 billion euros in 2016.
This is why the Italian government is investing 15 million euros in the development of a blockchain-based solution to combat it.
The goal is to authenticate goods and raw materials throughout the supply chain through a secure register that certifies intellectual property rights, sustainability and ethical practices considered necessary for development.
The dGen report, produced in direct collaboration with the main fintech and fashion industry leaders, is entitled “Made in Italy: Safeguarding artisans from counterfeiting” and explores the current impact that counterfeiting is having on artisans working for Made in Italy luxury brands and the possible blockchain-based solutions to try to solve this type of problem.
In fact, the backbone of many Italian companies in this sector are the artisans who create their products, and digitization, coupled with globalization, has had a major impact on this specific sector.
Blockchain technology could help in the authentication of goods and raw materials, the secure and up-to-date registration of intellectual property rights, a closer, more secure and private relationship between brand and customers, the certification of sustainable and ethical practices and after-sales services.
However, in order to achieve this in the supply chain of Made in Italy luxury products, it is necessary to involve the artisans who produce them, and this is a major obstacle.
Moreover, online sales have led to rapid changes that are putting existing business activities to the test. In particular, they require even faster production cycles, which endanger artisan production.
The blockchain alone cannot completely eliminate counterfeiting, but distributed records can provide a better way to track products through increasingly fragmented supply chains, with up to 50,000 suppliers and subcontractors in some cases.
For example, Provenance’s CEO and founder, Jessi Baker, said:
“Blockchain has a role to play in enabling products to come with authentic information. That could be online through e-commerce plugins containing verified information stamped on a blockchain. Or through unique IDs issued for products so that a duplicate cannot be created if the digital twin is linked to the physical product”.
Arianee’s CEO, Nicolas Hurstel, added:
“It is easier to fake a product than a non-fungible token – proving the utility of this technology for securing certifications”.
Jake Stott, a member of the dGen Foundation Board, commented:
“The technologies are there to support the industry, to help it transform its legacy operations and to bring about an evolution that should ultimately help protect more jobs and thus the economic output of the region”.
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