• CFRED CUHK Law

Blockchain's Potential Impact on Work and Employment

Aída Ponce Del Castillo - European Trade Union Institute, Brussels, Belgium

-- Among the many disruptive new technologies that have emerged recently, blockchain is the one that has the most potential to profoundly revolutionize society and the labour market. For blockchain to be socially acceptable, however, accountability and transparency in the governance of its architecture is necessary – as is giving all actors, including workers, the ability to become co-creators in its technological development and to shape its implementation.

This is particularly relevant today, at a time when many countries are slowly coming out of the COVID-19 health crisis and are about to face a potentially divisive economic crisis.

The Foresight Brief which I recently authored, "Blockchain in the World of Work: Hype or Hope?", describes blockchain technology and analyses its implications for the world of work and possible uses in certain sectors, including value chains. On a more experimental basis, it discusses whether blockchain can help to manage trade union organizations, including membership aspects, without establishing a specific ‘use case’.

The author suggests looking beyond the technocratic narrative: when any new and disruptive technology is implemented, it should be assessed not only in terms of its business value but also of its long-term social, ethical and legal impact. In other words, the question is whether blockchain can have a social function and possibly benefit society by bringing about stronger democracies, better working conditions and a more sustainable environment.

A central question is how blockchain systems can be developed in full respect of individuals’ human, labour and privacy rights, as well as the environment, which are all prominent concerns for trade unions, and without dissolving the employment relations. This also involves thinking about how trade unions can become "technology shapers" and better embed technology in their strategies.

The publication addresses blockchain’s impact on work and employment, looking in particular at blockchain in the supply chain transparency and traceability, as well as the use of blockchain systems to further develop the circular economy. For instance, keeping track of (and tracing) information related to the life cycle of a product is crucial, and particularly ‘recovering it in machine-readable format, (which) is immensely more efficient than attempting to re-construct it post hoc’. This is particularly important when child labour, migrant labour, poor working conditions, long working hours and low wages are at play and sometimes omitted in factory audits. Supply chains should be transformed in order to better incorporate workers’ participation (and that of other actors) in their design, implementation and monitoring, so as to build an architecture of increased accountability.

An interesting idea is to involve labour inspectors, who contribute to ensure the implementation of labour legislation in the workplace in many countries in the world. The idea here is to have access to good quality information related to the supply chain and to register it in the blockchain, which would help them to carry out their inspection work and to better supervise working conditions.

Additionally the publication explores how trade unions can use blockchain both as a tool for internal organization and for organizing members. For any use, trade unions would need to define a relevant use case, identify the actors possibly involved and the data. Then, possible uses can deal with data management, data sharing, verifiable voting, and financial management of the organization.

The publication highlights one (r)evolution for which society needs to be prepared, namely the way blockchain and artificial intelligence will increasingly be combined in the future. With the COVID-19 crisis acting as an accelerator and boosting the deployment of technologies, this revolution will be part of our daily life perhaps faster than anticipated. Blockchain platforms are already being tested in the healthcare sector, in particular for health data or for monitoring the journey of a pharmaceutical product from its origin to its use. Blockchain is also sometimes presented as a solution to protect privacy in contact tracing or in the verification of immunization status. Coupled with AI, its power will be multiplied.

Governance for blockchain is a must and the publication finally outlines five important areas that need to be considered if these technologies are to be more widely adopted and beneficial for the word of work: data quality; privacy and data protection; environmental sustainability; and solving issues related to ‘smart contracts’ and ‘decentralised autonomous organizations’.

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