How can corporations reinvent themselves when technology trends are reshaping businesses?

Web 3.0 is likely to shift power from technology giants to the hands of the masses.

The internet is a ubiquitous part of our lives as consumers and entrepreneurs. What is prevalent today is a version of the web called Web 2.0 that had its beginnings decades ago and matured significantly over the past decade. For most of us, doing business without it is unimaginable.

As Web 2.0 evolves and expands, we are now at the cusp of the third generation of the internet, known as Web 3.0. Based on blockchain technology, this signals a movement from centralized enterprise-owned platforms to decentralized blockchain-based architectures that are creator-owned and distribute data over multiple networks. 

While blockchain platforms could make multiple opportunities possible, equally complex are the regulatory aspects these would entail. The Ministry has identified five areas of weakness in the technology — scalability, security, interoperability, data localization and disposal of records — it needs to carefully envision and address these implications to create truly dependable and trustable use cases.

Amid these developments, the largest tech companies have publicly expressed work on the development of the metaverse. Though people sometimes use the terms metaverse and Web 3.0 as one, they pertain to two distinct concepts. Web 3.0 is the enabler for development of the metaverse.

The metaverse is a collection of 3D virtual spaces that permit users to engage with one another through their virtual selves, often referred to as digital avatars. Using augmented reality and virtual reality technology, this is already prevalent in the gaming industry, but the aim is to apply the concept to everything that makes us socialize, participate, and interact. In a release for its recent acquisition of a game developer, a technology giant stated that gaming will play a key role in the development of metaverse platforms.

We are already seeing businesses such as fashion majors set up virtual shops that permit potential customers to browse through offerings in 3D and trademark filings by a leading food chain for shops in the metaverse that may serve virtual food and beverages. This concept is likely to change the way we work and play, with many leading companies knocking at the doors of the metaverse.

In order to provide a robust foundation upon which the private sector can build, the Government must ensure that adequate physical infrastructure is available in the form of connectivity, data storage systems, etc. The expected burgeoning of the technology sector would provide an opportunity to various industries, such as IT component manufacturers and cloud service providers.

One of the key enablers to powering computational requirements of industry could be the use of quantum computing systems. While at a nascent stage right now, this technology could provide significant breakthroughs for challenges faced by enterprises. Theoretically capable of advanced problem solving, such systems are likely to be far more versatile than present ones, potentially of use in every industry. From dealing with current business areas in an exponentially quicker manner to cracking extremely complex problems that are presently unsolvable, use cases of quantum computing cut across industries. These range from development and testing of pharmaceutical products to supply chain effectiveness to predicting climate change and many more.

From a regulatory perspective too, technology would be all pervasive. Blockchain could become instrumental in compliance. Upon inclusion of technology built on this concept, a fundamental change in the way governance is undertaken may be that source documentation would no more required in the form of invoices, timesheets, receipts, deposit slips, etc. It would not be surprising to see no filings such as tax returns required in a few years as governments would have access permitting knowledge of transactions on a real-time basis.

Situations of concealment and misrepresentation are likely to be very rare, in view of the authentication processes that such technology permits. Physical searches and surveys may not be needed anymore. Without differences in knowledge of the facts involved, tax litigation should hopefully be limited to issues which are purely legal in nature, greatly reducing resolution timelines. From the perspective of change in regulations, technology is likely to result in real-time updates in the law being possible, both from a standpoint of declaration by governments as also implementation by taxpayers.

(EY India Senior Manager Khushroo Patel also contributed to this article.)