ADAPTATION OF BLOCKCHAIN AND SMART CONTRACTS TO THE CONSTRUCTION INDUSTRY OF DEVELOPING COUNTRIES

Abstract

The construction industry is often criticised due to its inherited challenges. Lack of trust and transparency, inadequate collaboration and complex structure have plagued the construction sector. Blockchain is a technology that has the potential to address these issues by automating procedures and enhancing traceability and transparency with its salient features. Whereas adaptation of blockchain within the construction industry is still at its inception. The situation is bleak in developing countries and there are numerous barriers and limitations that impact the implementation process. Therefore, this paper aimed to distinguish the barriers that affect the adaptation of blockchain and smart contracts for the construction industry of developing countries. The study used a mixed research approach. The barriers were ranked based on the data collected through a questionnaire survey and strategies to overcome them were identified through expert interviews. Findings derived from the analysis indicate that having a limited number of construction related software applications (powered by blockchain), the reluctance of the companies to bear additional costs to adapt blockchain and sluggish adaptation to new technologies as the significant barriers. As per the identified strategies, conducting an industry-wide digitalisation analysis, developing an industry-wide digitalisation strategy and recruiting skillful staff can be pointed out as the weighty strategies. The outcomes of this research were gained through the data collected from Sri Lanka, which is a limitation of this study. Eventually, a framework was developed as a guideline to implement blockchain and smart contracts for the construction industry of developing countries.