It is very easy for all of us to imagine an interconnected world where everyone, citizens, consumers, investors, and workers, could seamlessly live their lives transitioning between physical and digital planes at will before this decade concludes, John Keells Group’s Executive Vice President and Group CIO Ramesh Shanmuganathan says.
Web 3.0 is the much-needed foundational layer of the world wide web which has been in the making since 2015 and will fundamentally transform how we approach corporate governance, value creation, and stakeholder participation, giving stakeholders pari-passu interests and equal opportunity. It presents an opportunity where people are not merely consumers of products or services but builders and owners of digitally unique assets, identities and data.
Whilst Web 3.0 preceded the COVID-19 pandemic, the pandemic amplified the need for universal access to technology and related platforms for anyone and everyone with more decentralized peer-to-peer platforms with much more federated and decentralized governance models that would enable anyone to leverage technology.
Technology at the scale that can be harnessed by organizations and individuals alike, and especially with the open internet of value, is the future of anonymous sign-on, says Ramesh Shanmuganathan in this interview. Individual ownership, tokenization, and self-governance are crucial facets. And the next point of inflection for an organization is to figure out how they could leverage Web 3.0 to build a truly digital business as much as the physical one they have succeeded in building.
What is Web 3.0, and how will it impact businesses in the future as compared to Web 2.0?
Centralization has helped onboard billions of people to the World Wide Web and created the stable, robust infrastructure on which it lives. At the same time, a handful of centralized entities have a stronghold on large swathes of the World Wide Web, unilaterally deciding what should and should not be allowed. Web 3.0 is built on the premise of providing an affirmative answer to this dilemma. Instead of a Web monopolized by large technology companies, Web 3.0 embraces decentralization and is built, operated, and owned by its users. Web 3.0 puts the power in the hands of individuals rather than corporations. Before we talk about Web 3.0, let’s explore how we got here.
Web 3.0 is attractive because it enables peer-to-peer interactions without centralized platforms and intermediaries. The idea behind the Web was to make publishing possible for anyone; the idea in Web 2.0 was that readers should be writers too. Web 3.0 goes much beyond that. It is intended to give anyone on the web their autonomous power and control.
Brock Pierce has said, “The Blockchain is going to change everything more than the Internet has”. Web 3.0 uses a stack of technologies, based on decentralized blockchains, that enables new business and social models. Users own their data, identity, content, and algorithms and participate as ‘shareholders’ who own the protocols, tokens or cryptocurrencies as opposed to the ownership, power and money that was centralized in Web 2.0 with the so-called ‘gatekeepers’ who are the big tech companies and governments. Just to compare and contrast Web 2.0 and Web 3.0 in a more meaningful way, the following comparison might help:
In summary, Web 1.0 focused on static pages, and Web 2.0 thrived on user-generated content: Web 3.0 is all about assigning value and ownership to that content. Web 3.0 is a game-changer for companies and business people. It would enable businesses to better manage their data, understand their customers, improves their products and services and stays ahead of the competition by monetizing the same based on how they see fit on their own merits.
Throwing a budget at technology by itself will not transform companies. Leadership with a vision and an ability to align an organization are necessary, as you often point out. But Web 3.0 can sound overwhelming. How can leaders make their organizations Web 3.0-ready?
In essence, Web 3.0 will force businesses to become more transparent and user-centric. Businesses will pave the way for blockchain technology and the benefits it provides by making everything transparent and accessible to anyone. It would enable businesses to leverage a universal identity for all their stakeholders, delivering well-built customer trust, and better customer experiences, and have hyper-ledgers that can transcend boundaries, governments, and companies which are non-refutable. Businesses will be able to keep track of all the parties engaged in a transaction, build and manage their supply chains, automate contracts, simplify business operations, access real-time information, personalize at scale, lower the risk of cyber attacks or hacking, and the list can go on.
This is a significant point of inflection for most businesses and their leadership. It needs a well-thought-out strategy and a long-term programme of business, and a well-aligned technology transformation to realize the potential business value that was discussed above.
It’s important for leadership in the organization to be in step with the business and technology transformations that are taking place and be aligned and in sync to readily embrace the Web 3.0 revolution. I would like to propose 5 definite steps that can help leaders align organizations better for this inevitable transition within the next decade or so.
- Align your strategy and business models: Understanding that decentralization is becoming the new world order is a must. Then assessing the impact of the same on your industry, organization, and business model is key to starting this journey.
- Organize yourself and be ready for the transition: It’s good to be aware of the business/technology trend and be aligned to avoid challenges in embracing new ways and means of doing business. Ensuring that you are investing in the current stack of technologies will lend itself easier for this transition and make it more of an incremental step than a massively disruptive leap.
- Invest in talent and keep them relevant with time: Web 3.0 technologies and platforms are very different from traditional ones that many have been exposed to. Hence, it’s important to induct the right calibre of people across the organization, both in business and tech, to enable the organization to dabble with it starting with NFTs and cryptocurrency and understanding where it could help the organization to pilot meaningful projects to build their confidence.
- Focus on security and risk mitigation in whatever you do: In Web 3.0, security becomes a central theme in whatever you do. It’s good to understand what forces organizations and individuals to look at governance and risk in a new light since everything becomes authenticated, authorized, and non-repudiable due to the inherent nature of the technology stack it’s built on. This will eventually pose a huge challenge for organizations that do not have a proper governance mechanism around identity, data, device, location, etc. and more so in terms of a zero-trust policy framework.
- Create an Entrepreneurial and Innovation Culture and nurture it: Web 3 is all about innovation and experimentation. It’s important to nurture this culture in organizations for people to build their confidence by dabbling in experimentation but with safeguards to fail and learn from it. Organizations must make this a core competency of the organization by training and encouraging people to engage in the same across the board.
Organizations and individuals must be conscious of any yardstick these disruptive technologies will bring about, and the BIG CHANGE that is inevitable and is a matter of time. Leadership needs to acknowledge the same and build resiliency as a first measure and then look at leveraging the same as a strategic lever for the organization as the second measure.
Can companies that didn’t adapt to Web 2.0 aim to leapfrog into Web 3.0? What will they require to do this, and what is the more logical approach to it?
It’s important to comprehend the differences between Web 2.0 and Web 3.0 alluded to earlier in this discussion. Theoretically, an organization that was not dabbling in Web 2.0 can leapfrog into Web 3.0, but it does come with its own set of challenges associated with any such change powered by disruptive technologies and a double whopper in that when you skip a big step like Web 2.0. Further, it would also be a bigger challenge for an organization that is not already using Web 2.0 since it’s about the mindset and cultural shift as well as ensuring successful adaption of it.
The logical step would be for an organization to coexist with Web 2.0 and Web 3.0 since both will coexist for a longer period due to the nature and complexity associated with it with Social Platforms becoming the platform that will help fuse them and help users transition between the two.
As Web 3.0 continues to gain traction across the world, where do you see the bigger opportunities, specifically for Sri Lanka and its tech sector that is aiming to find and define its place in the world?
Web 3.0 offers a lot of opportunities to those who wish to enter the same, such as a green-field opportunity or a brown-field opportunity. Web 3.0 has evolved since its inception in 2015 and has matured well in the following areas where it has found significant traction across many countries, and those would be:
Decentralized Autonomous Organizations (DAO)
Decentralized Finance (DeFi)
Centralized Finance (CeFi)
Decentralized Storage (DeSt)
Decentralized Applications (DeAp)
Decentralized Social Media (SocialFi)
Decentralized Science (DeSci)
Blockchain Games (GameFi)
Decentralized Streaming Platform
Privacy & Digital Infrastructure
NFT-based Applications / Use cases
These are the mainstream use cases at present, and more are being added to the list which is rapidly evolving. Since Web 3.0 transcends boundaries and removes most of the cross-border barriers, companies, and individuals in Sri Lanka too can tap into this opportunity to build their unique solutions or become part of a global community that is already doing it. The key is to ensure whatever we choose to focus on has a problem at scale, a solution that could evolve and the capacity to go global.
What policy support does Web 3.0 require?
The promise of Web 3.0 is to create the next point of inflection in the internet as we know it to become a platform for anyone and everyone to gain equitable access to participate in a world of increasing opportunities for the millions on the margins of the innovation economy and enable them to take control of their digital lives and assets.
Web 3.0 encompasses an array of technologies – digital assets, decentralized finance, blockchains, tokens, DAOs, etc. These are the foundation for enabling new forms of human collaboration, co-innovation, and co-creation. Whilst this is taking place, it’s also important to address many aspects of public life and help communities make better collective decisions about critical issues such as how networks will evolve, what behaviours are permitted online, and how economic benefits are distributed since Web 3.0 aims to restore trust in institutions and expand access to opportunity based on a smart policy framework and contracting. Good regulation establishes a framework for how innovation can benefit society while managing the real risks that might otherwise harm consumers.
Development of world-class, decentralized infrastructure solutions, including digital identity, digital property rights, secure financial systems, accessible financial services, individual data sovereignty, privacy architecture, and better cybersecurity.
Calibration of regulatory activities to the specific applications considering their associated risks by treating each class’s digital assets in its own accord to ensure comprehensive coverage.
Cross-agency working groups to ensure all aspects of Web 3.0 get comprehensive coverage including but not limited to intellectual property, data privacy, cyber security, net neutrality, consumer protection, property rights, cryptocurrencies, corporate governance, digital access, revenue distribution, etc.
New disclosure standards aligned with Web 3.0 promise of transparency, traceability and auditability and focus on consumer understanding rather than strict adherence to legacy policies/strictures.
Secure, detailed tax reporting of revenue and digital assets leveraging the capabilities of Web 3.0 to collaborate, integrate and automate same as necessary with transparency and auditability.
Enable DAO to become mainstream as much as a corporate today by enabling them to collaborate, manage projects, own assets, invest, and operate like a traditional organization, but with greater levels of transparency, openness, and democratic governance.
Ensure the right ESG alignment by using cutting edge, carbon neutral or negative technologies and paving new ground on how the Web 3.0 and ESG movements align.