Technology is driving an opportunity to ensure that every physical product has a digital history, permitting consumers to trace and confirm its origins, attributes, and ownership to ensure conflict free natural resources. Blockchain technology is well-suited for tracking objects and transactions, making it possible for virtually anything of value to be traced. This opportunity is about creating transparency and product traceability in supply chains.

Attempts to control natural resources can cause and exacerbate bloody conflicts. In response, a conflict-free movement is gaining momentum, paving the way for a new market opportunity for conflict-free products. Technology is arriving as an important tool to do the tracking work. Blockchain has the potential to be a game-changer, as it is well-suited for tracking objects and transactions, making it possible for virtually anything of value to be tracked. Emerging products and services are making it possible to ensure that traded resources are not feeding a conflict.

Products and Services

Products and services in this opportunity space include entirely new products, such as Fairphone, whose business models are based on the sourcing of traced and transparent materials, but large established players are also tapping into the conflict-free opportunity space. For example, in 2014 Intel released the world’s first commercially accessible conflict-free microprocessor.

Other emerging products and services include certification and insurance services to trace the origin of materials in a product’s supply chain. These services allow users and companies to rest assured that their materials are conflict free. Through certification schemes to ensure conflict-free sourcing in the supply chain, companies outsource the reporting work to a third-party expert company that can investigate the supply chain and provide the assurance a company needs for reporting.

A potential element of this opportunity space is for the due diligence service provider to provide insurance with its report. This insurance gives companies peace of mind the reports are correct – but, if not, they will have insurance coverage. It helps support the move to create a market where consumers can actively avoid purchasing any conflict minerals.

A number of start-ups are frontrunners in this opportunity space working to combine data from insurance companies, police departments, and certification houses. In addition, a number of start-ups are working to use blockchain to trace minerals. It has taken off in tracing of diamonds, but will be applicable across minerals.


Market Size and Demand Drivers

Regulation is an important driver of the conflict-free opportunity space. In the United States, the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act required manufacturers to audit their supply chains and report use of conflict minerals. The European Union has followed with regulation requiring companies that import minerals into the EU to carry out checks in their supply chains to see if they are funding armed groups.

Corporations are also increasingly setting goals to become conflict free. Another key demand driver is millennials entering the market. To help illustrate the myriad business benefits, Intel recently commissioned an online survey of 500 U.S. millennials, with Penn Schoen Berland, to assess millennials’ attitudes about conflict-free natural products. The survey found that millennials, who collectively possess billions of dollars in spending power, highly value social responsibility.

Survey Findings

Conflict-free natural resources was not among the favorites in our 2016 global survey of 15 new market opportunities.  Leaders in Europe had the most positive outlook on this market opportunity, rating it 8th best out of 15.

Out of 15 opportunities surveyed in 2016, the leaders believe this is the opportunity for which there is the least political capacity to pursue. However, there are some regional differences between leaders in China, who are much more positive about the current political capacity to pursue this opportunity, and leaders in the MENA region, who are more positive their economic capacity is strong enough to develop this market.

Leaders in the MENA region are the most positive about the economic capacity of this market opportunity.
Leaders with mid-level management responsibilities have a higher confidence in the technological capacity to pursue this opportunity than C-level management. This is not the case for most of the other market opportunities surveyed in 2016.

Compared to the other 14 opportunities surveyed in 2016, respondents do not see a convincing business case in this opportunity, nor do they believe their own organisation will pursue it. However, most leaders in the survey believe it has high positive impacts on society.

The manufacturing sector sees the best business case in this opportunity. However, the survey indicates it is not a market many actors will advocate actively for.

This market was surveyed globally in 2016 by more than 5500 leaders from both the public and private sectors. The survey was conducted in collaboration with the research company YouGov. The survey results were originally published in the Global Opportunity Report 2017.

Global Goals addressed