Economic Sector

Last updated: Monday, April 22, 2019


Policy Trends for Digital Platform Economy

Posted: Tuesday, August 14, 2018

It is time we took consistent and clear consideration into the Digital Platform Economy. There should be a far-reaching vision, as well as a better inter-sectoral coordination mechanism in policy-making, related to the Digital Platform Economy.

Over the past decade, the Digital Platform Economy has developed strongly in the world and has now penetrated Vietnam. In the early stages, this model received the active support of many stakeholders.

However, recently this model, especially in the field of passenger transport and tourism, has exposed a number of loopholes related to workers' rights, healthy competition, social order and environment. The practical and timely implementation of policies and laws to bring into full play the strengths and limit the negative aspects of the economy have received increasing attention from countries around the world, including Vietnam.

The reality shows that the applications of the digital economy and digital platform are growing rapidly and deeply penetrating the global economy and society as an objective trend. Digital Platform Economy opens up many opportunities, along with many challenges to the traditional economic model, as well as the management of this new economic model.

Digital Platform Economy is understood to be economic-based activities based on the use of digital technology to connect and interact. Digital Platform Economy directly impacts many areas, especially the tourism sector. So far, e-commerce platforms have been built and entered the travel market such as Airbnb, Agoda, Booking, Traveloka, Expedia, VnTrip, and so on. Enterprises can grab opportunities, exploit the superiority of digital platforms to make the most of available resources, promote competition and improve service quality.

At the conference "Policy Trends with Digital Platform Economy", organised by Vietnam Chamber of Commerce and Industry (VCCI) in cooperation with the Vietnam E-commerce Association (VECOM) in early August, Mr Tran Trong Tuyen, General Secretary of VECOM, said that the underlying economic model has developed strongly in the world and in Vietnam, receiving positive feedback and support from many stakeholders, thanks to the benefits form Digital Platform Economy such as increasing productivity, reducing costs, creating new markets, and increasing labour market flexibility.

However, according to Mr Tuyen, besides the positive impacts, the Digital Platform Economy also poses a considerable challenge to the Vietnamese economy. First of all, the underlying economic models have shaped many different markets, influencing, and even disrupting many traditional business models.

Worse still, Digital Platform Economy has gradually exposed some of the deficiencies that require the intervention of the State to protect the rights of consumers and workers and prevent tax fraud in cross-functional platforms. And Vietnam is facing many difficulties in developing regulations for these new economic models.

Noting that Digital Platform Economy should be encouraged, Dr Ngo Tri Long said that this is an irreversible trend and must definitely be encouraged to develop, because it facilitates rapid transactions, optimising the availability of resources, promoting competition and increasing service quality.

According to Dr Ngo Tri Long, in the current trend, a platform will provide connectivity for many industries, rather than just in such areas as transport or logistics, food, pharmaceuticals. Therefore, building a favourable policy environment for the development platform is needed. To do this well, regulators need to understand the novelty of Digital Platform Economy. At the same time, identifying the undesirable effects of the Digital Platform Economy on each sector is essential. From there, specific policies can be introduced to minimize negative impacts. Policies must embrace this trend and set the stage for further development and diffusion across the entire digital economic ecosystem.

Sharing this view, Mr Dau Anh Tuan, Director of Legal Department, Vietnam Chamber of Commerce and Industry (VCCI) also said that when a new economic model is introduced into Vietnam, it takes at least 1 or 2 years to adopt new policies to manage this type of technology. This model changes quickly, so the policy to manage this type is often outdated.

Mr Tuan said that the State should focus attention on protecting public interest, at the same time preparing scenarios, anticipating the impact on the public interest. In addition, information should be provided and forecasted to mitigate the possible negative effects of these services.

Mr Ngo Vinh Bach Duong, representative of the Institute of State and Law, also made recommendations that, in the management of the platform, attention should be paid to the consideration of common trading conditions, especially in the allocation of responsibilities, to protect the interests of consumers and protect weak partners in the transaction. The promulgation of disciplined policies, even inconsistencies, will affect the goal of promoting the digital economy.

Thu Ha

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