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Digitalization threatens public and governmental institutions – PM

Russian Prime Minister Mikhail Mishustin attended the Digital Future of the Global Economy international forum in Kazakhstan’s Almaty, website of the government reports. He addressed a plenary session of the forum with a speech Construction of a sustainable region based on big data and artificial intelligence.

As he noted, “Digitalization has impacted all spheres of our lives and its influence is growing. It is currently leading to the elimination of entire economy sectors together with production facilities and jobs, changing social behavior of people, affecting labor and ownership relations, contributing to the tax base erosion. It poses certain threats to the existence of regulators, including public and governmental institutions.”

According to Mishustin, “The term “economy of collaborative consumption” forms a new competitive environment where there is no place for intermediaries, while the relations between the seller and the buyer are often obscure for our regulating bodies. The business models of digital platforms are currently being built on the collection of global personal data, which allows for improving the content, service, attracts even more customers and quickly builds up capitalization using breakthrough technology, including AI. At the same time, the owners of data are global, major digital companies while the product is not a service provided by these platforms, but the actual data itself. This leads to the elimination of money flows from these relations.”

“Digital businesses require a minimum number of tangible assets. Talent and knowledge, intellectual property are currently the most important. They can have a value enough to cross state borders. As a result, countries lose their rights to receive revenue from this value, which was created on their territories. Today many international institutions reconsider the processes of the distribution of the global revenue,” PM pointed out. “The digital transformation requires a total reinterpretation of the role of the state and the organization of the activity of federal and other bodies of authority.”

He further stressed that “Russia has breakthrough technology for delivering on the most ambitious digital transformation objectives. We have our own leaders in digital business that create global ecosystems and develop fields which will change our world tomorrow. For example, this includes self-driving cars. At the same time, we not only possess state-of-the-art technologies, but we actively introduce them into everyday life. Over 100 mio people have registered for and use e-government services.”

“As a leader in the area of digital technologies, Russia is ready to share the most advanced innovations with its partners in the Eurasian Economic Union,” PM said. “A common digital platform must reinforce the four freedoms shared within the EAEU: free movement of labor, capital, goods and services. We jointly address the highly complicated problems of standardizing the employment system, creating an ecosystem of digital transit corridors, a system for tracking and marking goods, facilitating electronic information exchanges on customs, taxation and banking matters, industrial co-production arrangements, data flows and protection and creating a system of regulatory sandboxes. Moreover, we are working together to create a joint integrated information system.”

As far as digital transformation is concerned, he listed a number of tasks to be accomplished, such as an EAEU single digital identification system, data protection with e-document flows contained within a universal interstate environment and operating under common standards, a system for ensuring documentary and physical traceability of goods and services based on a common digital platform, and joint technology competence centers to drive EAEU’s digital development.

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