Studying Potentials and Barriers of Successful Implementation of Smart Contracts in Saudi Arabia’s Construction Industry

Abstract

Smart contracts have the ability to address a variety of important obstacles in the construction business, such as contract conflicts and payment issues. Likewise, it may facilitate the adoption of building information modeling (BIM) in the industry. Poor adoption of distributed ledger technology in the Arabian construction sector stems from a variety of impediments. The usage of smart technology is growing in popularity across the globe in the recent few years. Nonetheless, in the Arab world, there are not enough experts who are aware of how smart contract technology can make the construction sector more efficient, collaborative, and transparent in the digital era. With that in mind, the purpose of this study is to evaluate the benefits and drawbacks of using smart contracts in the construction industry. To accomplish its goals, this study mostly uses descriptive statistics to analyze the collected data from questionnaire surveys. This research utilizes an illustrative diagram to map the potentials and obstacles to the adoption of smart contracts from the respondents’ perspective. According to the conducted analysis, there are five main potentials and barriers to smart contract implementation, namely, the Internet of Things, data reliability, stakeholders, security for distributed systems, and finance and economics. Additionally, the questionnaire survey yielded 21 potentials such as better risk allocation, decreased transaction time and cost, and ease of understanding by multiple stakeholders. Moreover, the conducted survey obtained 19 barriers such as slow learning curve, high training and education costs, and cybersecurity concerns. It can be argued that the present research study can assist in endorsing the adoption of smart contracts in the Arabian construction market.