Made in Italy and tourism make Italy a unique country, but how can blockchain technology guarantee its accessibility and expansion?
Tourism and export are probably the sectors most affected by the unrepeatable setback that the Covid-19 epidemic has brought with it.
“Worse than a Titanic” – the numbers are disarming. The tourism sector, a strategic asset of the Italian country with 12% of GDP, had a turnover of 146 billion euros before the pandemic.
The estimates of Assoturismo announce a decrease of 260 million tourists: the iceberg which has been hit is melting and a much more dangerous monster has emerged from it.
As far as exports are concerned, according to the Confindustria study centre, a 5.1% drop is predicted for 2020, linked to the inexorable reduction in sales in European production chains.
Although the European Commission and the Government are designing the most effective plan for the recovery, it will be necessary to take steps to recover what has been lost as soon as possible.
Blockchain and Made in Italy
Giuseppe Perrone, Senior Manager at EY – Blockchain HUB Mediterranean Leader, has been studying for some years now a transparent traceability mechanism for the production chains, from fruit and vegetables, to meat, fish and dairy.
Not least, the development of a marketplace for European wines on the Chinese market. More specifically, Wine Blockchain EY, a suite of integrated services consisting of consulting methodologies, IT tools and Value Added Services to support the Italian wine industry in the promotion of the company’s brand, the transparency of production processes and the digitalization of the production phases for the Food sector.
This is one of the first cases of digital relationship between producer and the final consumer, who can read all the information about the wine, identified by a digital signature, such as the entire process of cultivation, production and processing of wine thanks to a QR code on the bottle.
In a now anachronistic socio-economic context, this solution was developed to meet the widespread needs of customers: 74% of consumers say they are interested in finding information on traceability during purchase and 60% check product labels.
The trend is strengthened by counterfeiting, which affects the Italian wine industry with a loss of revenues of 2 billion euros per year.
In a post-Covid-19 market, where e-commerce has reaffirmed its centrality and the need to broaden market horizons as much as possible has gone from desirable to necessary, these solutions could help even the smallest wineries, preventing the creation of discrepancies within the supply chain during the renewal process.
The forced revolution brought about by the virus requires structural reconstitution, blockchain technology offers a decentralized model that can streamline sales and conscious consumption practices.
In September of last year, the AIDEA (Italian Academy of Business Economics) in collaboration with the University of Turin addressed tout-court the issue of Italian corporatism and the transition to a digital economy.
It is interesting to reflect on the applications of blockchain technology in the tourism sector, and the epoch-making introduction of new tools such as smart contracts, decentralized applications and cryptocurrencies (Willie, 2019).
Blockchain technology, for example, has the potential to disintermediate the hotel reservation process, thus making intermediaries and commissions unnecessary.
Bringing this possibility into the business culture of tourism companies during the transition phase, could reduce the monopoly of OTAs (Online Travel Agencies) much faster than institutional intervention and/or advocacy.
A decentralized reservation system would bring several advantages to the stakeholders involved (Ye et al., 2017): consumers could book rooms at a cheaper price, since the peer-to-peer network would remove intermediaries (i.e. commissions) and would still be competitive with other hotels on the same reservation platform (Carlino, 2018).
Moreover, independent hotels would overcome the forced isolation caused by the current market-dominant intermediaries (Tapscott, 2016).
The Locktrip project is mainly intended to create the first travel marketplace, hosted at Locktrip.com, which allows customers to book hotels and B&Bs on average 20-25% cheaper than their main competitors.
Locktrip’s technology consists of a decentralized booking engine (called the LOC register) that relies on the Ethereum Virtual Machine (EVM). Therefore, Locktrip gives back price control to the hotels and eliminates costs arising from the chain of intermediaries between the hotel and the booking website.
The hotel industry is also undergoing a total remodelling, after the massive cancellation linked to the lockdown of more than two months. The blockchain thus provides the tools to distribute with less cost and more efficiency, reaffirming the presence in the market of many tourism entrepreneurs.
This could reward their stoicism, optimizing the impact on the real economy of ministerial intervention, which otherwise risks being obsolete.
“We must pursue a strategy of action that will lead Italy to excel, at world level, in all the main challenges that characterize the fourth industrial revolution. An efficient and rational investment policy will allow us to grow in digitization, robotization and artificial intelligence”.
These are the words of Premier Conte, spoken with reference to the 4.0 Industry Plan presented last year. Digital innovation, the overcoming of the gap between Italy and the large smart nations, investments in open innovation, with particular focus on SMEs and innovative start-ups, are among the main reasons for the adoption of the FNI (National Innovation Fund).
The Italian prime minister has certainly had a lot to think about, as many good intentions have been swept away by the health emergency.
Italy cannot afford to miss the historical opportunity: investing in innovation, in addition to reducing costs and improving efficiency, is a first step to stop the brain drain. To restart, Italy will need all its resources, both human and technological.
Tourism and the Made in Italy brand are enhancing the value of the Italian brand all over the world, permeated with traditions, cultures and deep identities. It is important today to find innovative solutions to guarantee its protection and reinvigorate its promotion processes.
Blockchain has shown how the right choices from this crisis can (re)create an Italy capable of combining its great past with a difficult and unexpected present, in order to build a better future.