Blockchain innovation for sustainability can earn €1 million EIC prize

06 June 2018

The European Innovation Council has launched a prize fund for blockchain innovators looking to use the technology to promote sustainability. The multimillion award will be divided between five successful applicants after September 2019.

Having come to prominence as the technology underpinning Bitcoin, blockchain initially made its presence felt in the financial sector. As a result, a great number of firms of all shapes and sizes have rushed to explore its applications in the lucrative arena. However, to limit blockchain to the financial sector would be to waste much of its potential.

As a result, blockchain has also since made waves in the freight and logistics industry, while entities in every sector from insurance to retail are seeking to exploit its transformative impact to promote security and prevent fraud. The versatile technology is already being used to build financial registries to enable micro-payments; operational registries to track and certify products; smart contracts and payment mechanisms, and even in the evolution of the energy industry.

Blockchain innovation for sustainability can earn €1 million EIC prize

In recognition of blockchain’s versatility, as well as its potential to facilitate social good, the European Union has launched a competition that will provide five top blockchain solution with a substantial financial jackpot. The European Innovation Council (EIC) launched the contest as part of the Horizon 2020 program to develop the best social and sustainable blockchain innovation.

Horizon 2020 as a whole is centred on "the development of scalable, efficient and high impact decentralized solutions for social innovation challenges based on Distributed Ledger Technology (DLT), such as those used in blockchains". In practice, this sees the group run a number of initiatives in order to support new schemes in fair trade, transparency processes, financial inclusion and decentralised data management, among other issues.

The five lucky entrants will each receive €1 million to further develop their innovation, as the competition, 'Blockchains for Social Good' is aimed at stimulating sustainability through blockchain technology. The contest is now open for submissions, which will run until the 3rd of September 2019, though registration with the EIC is first necessary, with that process open until April 2019.

Related: Blockchain a game changer for banks looking to 'Know Your Customer'.

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Late payment culture cripples productivity of SMEs

29 March 2019

UK SMEs are seeing their efforts to grow stifled by late payments, causing thousands to enter insolvency proceedings each year. According to experts from Duff & Phelps, this also has a major impact on the UK’s economy, meaning late payment culture must be tackled if the country is to dodge yet more economic stagnation in the shadow of Brexit.

Small and mid-sized enterprises in the UK face a myriad of pressures at present. Brexit anxieties are keenly felt by SMEs, with more than nine in 10 suggesting recently that economic conditions have worsened in the last 12 months. 66% of SME leaders also expect conditions to further worsen in the coming year.

At the same time, firms are keen to see value for money from investing in external expertise. Consulting fees which weight much more heavily on smaller firms, who spend £60 billion per year on professional services, but feel that more than £12 billion of that figure is wasted on unnecessary or bad advice.

Late payment culture cripples productivity of SMEs

Above all, however, SMEs are extremely vulnerable to late payments, and, according to a new study, the situation is only getting worse at present. According to corporate rescue consultancy Duff & Phelps, small businesses in the UK are facing a collective bill of £6.7 billion per annum due to late payments by other companies, while the average value of each late payment now stands at £6,142. This has risen from £2.6 billion in 2017, illustrating the plight of SMEs, particularly with uncertain economic times ahead.

Indeed, the spike in late payments has already caused significant productivity issues for SMEs, which in turn compromises their financial stability. With staff wasting hours chasing down late payments and businesses becoming preoccupied with short-term cash flow problems, they are less able to concentrate on creating new value for the firm, which in many cases gradually slides toward insolvency.

Small businesses across the UK are facing major cash flow pressure, leading to increased financial instability as a direct result of a late payments culture. This is likely a big driver of the UK’s 20% boom in insolvencies over the last three years, especially as it has a knock-on effect on other SMEs within the supply chain of those struggling firms. Approximately 50,000 small businesses fail each year because of late payments, amounting to a shortfall of more than £2.5 billion for the UK economy. 

Commenting on the findings, Paul Williams, Managing Director, Duff & Phelps, said, “In this modern era of technology, which is designed to enable business agility, late payments are particularly galling as there are no excuses. The day of the ‘cheque is in the post’ is long over!... More can be done to avoid businesses reaching this situation in the first place. SMEs underpin the economy, so prioritising timely payments will help allow business owners to focus their time and energy on providing good quality products and services and adding value to the customer experience, rather than chasing outstanding payments.”

The UK Government currently promotes its voluntary Prompt Payment Code to encourage good practice, but late payments by larger companies remain a common pain point for many SMEs. There may be hope for an end to late payments, however, following an announcement in the Spring Statement from Chancellor Philip Hammond. The Government aims to crack down on the practice, with Hammond stating big companies should hire a Non-Executive Director to be responsible for reducing late payments to small suppliers. The statement also advises that organizations publish payment practices in their annual reports.