As digital platforms transform a state administration

Digital platforms can transform the system of public administration

2019: Medvedev approved creation of the digital platform of a state administration

At the end of November, 2019 the prime minister Dmitry Medvedev approved "road map" on creation of the digital platform of a state administration and charged to approve the plan on its basis. Work on the project starts in 2020. About it Kommersant was told by the representative of the Deputy Prime Minister Maxim Akimov.

According to him, in 2020 in departments will begin pilot developments of services based on which "the quantum jump in the speed and completeness of rendering state services in electronic form" should be made.

Dmitry Medvedev approved "road map" on creation of the digital platform of a state administration and charged to approve the plan on its basis

Platform approach became the leader, and today practically all largest companies of the world use platform business models to advance the business. And we should make use of this experience to provide the new interoperability layer of the state, business and citizens of our country. For this purpose we have a program in digital economy, and for this purpose it is necessary to try to create the digital platform of public administration — Dmitry Medvedev at a meeting on the digital system of public administration at the central office of Sberbank said.

It is supposed that state bodies will be forbidden to compete with private companies which, according to the head of Analytical center at the government Vladislav Onishchenko, will have an opportunity to render all range of state services. Models of interaction of the state with business will be developed to reduce costs of citizens for receiving these services and to provide commercial attractiveness of services, he noted.

Vladislav Onishchenko emphasized that actions of "road map" will not demand additional budgetary funds, the sufficient amount is already put in the national program "Digital Economy" and in budgets of departments. Total investments the Digital State Administration project from 2019 to 2024 are estimated at 235.7 billion rubles.^[1]

The digital platform – what is it?

Today we become witnesses of how digital technologies before our eyes alter all traditional relations. Platforms Uber Yandex taxi are also available in the different countries and will conveniently organize interaction between passengers and taxi drivers. The platform on lease of housing of AirBnb offers the flexible controlled scheme of interaction between lessors and tenants of housing. The Kickstarter platform allows authors of the innovation ideas to raise money for implementation of future products or services, the Upwork platform in USA and platforms similar to it in other countries provide a full stroke of the relations between freelancers and employers, starting with the project description, conditions of their accomplishment, signing of the contracts, payment of work and payment of the necessary tax deductions and allowing employers to manage group projects online. The platform Amazon Web Services (AWS) offers developers SOFTWARE tools of a full stroke of creation and deployment of commercial applications in the most different directions: machine learning cloud calculation, mobile technologies, Internet of Things and so forth.

Capacity of digital platforms in the field of public administration requires additional studying and the analysis as unlike business in public administration other conditions and specifics in project implementation and programs. However in strategic perspective of the purpose on quality improvement of services and interactions at the state and business match consumers.

Digitalization in Russia made superpopular the term "platform" which was actively used in the IT sphere. Computing, computer, program industry, product... But platforms are relevant not only for the IT companies today.

Platform thinking becomes dominating not only in the telecommunication and hi-tech markets, but also in consumer markets: the taxi, purchase of goods and products, car-sharing (carsharing), real estate lease and in other industries which can be carried to economy of joint consumption (sharing economy). Platforms as a revolutionary business model, according to A. Moazedu and N. Johnson, having replaced linear model of business, change not only our consciousness, but alter the economic principles. ^[2]

The platform is a digital format of the organization of interactions between industry suppliers and consumers for the purpose of minimization of transaction costs (for example, by search of partners, goods, services, the organization of payments, signing of the contracts, control of execution of arrangements, assessment of reputation of industry participants, etc.). The platform "accelerates exchange of value between two and more user groups, consumers and producers" ^[3], provides control and assessment of result, and in necessary cases can act as primary arbitrator in case of a dispute between the supplier and the consumer. On platforms the clear system of monetization of services for users is created. For implementation of functionality of the platform the difficult architecture of digital solutions which requires serious organizational and normative and legal changes for its creation and implementation forms.

As proves world experience, successful are such platforms which, using a positive network effect (simultaneous increment of suppliers and consumers of goods and services in which both parties can change roles) and managing it, as much as possible simplified the main procedures of exchange and interaction and reduced costs of all involved parties. At the same time, the more participants of interaction it is involved, i.e. the positive network effect is higher, the all participants of platform interaction win more and the interaction costs are lower.

Narrow and problem links of interactions in the industry become the major impulse for creation of digital platforms, just also, and the bigger number of participants of exchange incur costs, the effects and benefits of creation of the platform are higher.

For what does the state need digital platforms?

In this article we will consider how digital platforms can transform the system of public administration. On the one hand, in the Russian practice of a state administration the term "platform" quite often began to be applied as a synonym of an information system. Departmental documents join actions for development and creation of digital platforms, for example, for placement of the database of resources for the advancing professional training (Minprosveshcheniya of Russia), for interaction in the field of strategic management for the purpose of coordination of actions of all participants (Ministry of Economic Development of the Russian Federation), etc.

On the other hand, long-term experience of development of the separate state information systems (SIS) created conditions for their successful transformation to digital platforms. For example, federal portals of state services, state procurements, the managerial personnel can be considered as prototypes of future platforms.

On N. Srnichek's classifications, platforms which main objective – minimization of costs of key interaction in terms of logic of business processes, it is possible to carry to "lean platforms" (lean platforms) ^[4]By this principle information aggregators, for example, with Yandex taxi and Uber which build interaction process by the most convenient method as for suppliers, and consumers of services work.

Capital asset of lean platforms – data on consumers and suppliers. These data concern the size, the number of the companies, clients, cataloguing of goods and services, consumer prices in the market and their dynamics, consumer behavior of users, etc. As a result the platform aggregator or the platform marketplace can predict dynamics of the amount of the market, the need of the market for the goods and services including which are not provided at the moment yet.

We consider that authorities need to adopt ideology of lean platforms today that will allow through digitization of key processes in departments not only to optimize internal processes, but also to transform interactions with all customer groups. And in this case state regulation of the industry will be based on the analysis and decision making based on digital data about industry consumers and suppliers.

Below we will review examples how the state can and should join in management of platforms.

Transformation of GIS to digital platforms

First, the state can act as the initiator of creation or transformation of GIS to digital platforms. The current program documents on creation of digital economy in Russia provide 16 tasks (results) on creation of digital platforms. For example, digital platform of the electronic government, "digital profile" platform, platform of identification, platform of execution of the state functions, etc.

The federal portal of state services www.gosuslugi.ru can also be considered as future platform on which, on the one hand there are authorities of all levels, and afterwards and budget organizations, and on the other hand – physical persons and legal entities.

One of the most important conditions of transformation of the portal of state services to the platform is attraction to providing state services by means of the portal of other organizations rendering the connected services. For example, services in land surveying of the land plots. It is possible to provide to the citizen the choice and the address to the cadastral engineer on the portal. For this purpose it is necessary to develop the mechanism of admission to the platform of cadastral engineers, to define criteria by which their qualification is determined, to approve the payment mechanism of services of the cadastral engineer, etc. It is also possible to introduce the system of rating of the accredited cadastral engineers on the basis of responses of citizens and other parameters. In addition to cadastral engineers, it can be notarial services, insurance services, bank services, delivery services, etc.

Other condition – creation of "a bush of platforms" or an ecosystem of digital platforms, where the portal of state services – the main, but not the only instrument of receiving the public, budget and municipal services. Thus, transformation to the platform happens on the basis of uniform mechanisms of inclusion of new actors for assistance performed by difficult services (superservices).

Other example – transformation to the platform of the portal of state procurements www.zakupki.gov.ru which formally fits already today the definition of the platform as provides search of competitive offers. In the long term key interactions can be improved further as due to simplification of procedures, stipulated by the legislation about a contract system, and due to development of technologies of automatic or algorithmic control of all procurement cycles. For example, by formation of a system of triggers (signal warnings) for identification of violations of the set conditions of purchase or implementation of "smart" algorithms on check of correctness of the request, the choice of the winner, detection of attempts of fraud, incorrect actions, etc.

Digitalization not only as much as possible will lower costs for each carried-out purchase, but also will allow to refuse subjective solutions at the level of specific employees, having turned the last not accepting, and approving or rejecting the solutions proposed by platform algorithms.

Implementation of the described approaches will allow to test and implement on the platform of state procurements technology domestic developments in the field of machine learning and processing of Big Data. Afterwards the accumulated experience can be extended to other projects of digitalization.

However the state initiative of transformation of GIS to digital platforms does not mean at all that the platform should develop and be serviced further for budgetary funds, as in case of GIS. Besides, not everyone can be transformed by GIS to the platform.

For the purpose of further optimization of administrative costs and providing high-quality services the state is interested first of all in the competition in the market in which the platform, and in creation of transparent conditions for an exit "from a shadow" on the platform of participants and intermediaries who could be imperceptible or unknown earlier forms. Thus, in the first option perhaps several scenario approaches:

1. государство approves all basic rules of interaction on the platform and defines the operator of the platform who according to the set requirements provides development of the system created for budgetary funds creates model (technology) of an input on the platform and control of compliance to requirements of participants;
2. государство delegates the right to set rules on the platform to the operator, at the same time creates mechanisms of antimonopoly regulation and provides control of observance;
3. создается public-private partnership in which the right of possession and operation of the platform can be redistributed further between the state business.

Each of the above described options has the advantages and risks which are caused by the purposes of formation of platforms, their types and the used technologies.

However irrespective of the selected scenario and the specific market, the complex of the rule-making initiatives directed not only on regulation of the certain platform, but also all industry (sphere) in connection with formation of platforms in it should be created.

Platform approach for state regulation of the industry markets

Secondly, the state can delegate a part of regulatory functions to already created or created market platforms, thereby reducing state regulation scales.

In the working model of state regulation subject to regulation are market participants who depending on the performed activity should obtain the state licenses (permissions), periodically undergo testing, provide the reporting, pay taxes (charges), etc.

Upon transition of market participants to the platform the last undertakes a part of functions of the regulator. For example, the admission of participants through the system of compliance to the set criteria, quality control of services and the system of insurance instead of state control, collecting of the current reporting, embedding of mechanisms of transaction taxation in operation algorithms of digital platforms or investment with functions of the tax agent of operators of the digital platform, etc.

Key advantages of use of platform approach for state regulation of the industry markets is, first, significant reduction of administrative costs as for state agencies, and economic entities, secondly, increase in transparency of market participants and working conditions in the market due to transition to algorithmic management of the platform.

In this option also perhaps several scenario approaches:

1. государство can transfer a part of the functions to the operator of the platform, for example, regarding collecting of obligatory payments or the industry reporting, including statistical;
2. государство can become one of participants of platform exchange or from suppliers, having transferred to the platform interaction with consumers concerning payment, for example, of utilities, other obligatory payments, or from receivers, for example, to the industry reporting, including statistical;
3. антимонопольное the regulation of the markets directed to prevention of risks of the market monopolization, by means of mechanisms of state regulation or self-regulation, depending on the purposes of formation of platforms, their types, the used technologies, etc.
4. оказание supports on promotion of the industry platform on international markets through the interstate unions and associations.

Incentives for creation of commercial digital platforms

Thirdly, the state can stimulate creation of commercial digital platforms in those markets and in the industries where it is economically reasonable.

It should not mean only selection of budgetary funds for creation of digital platforms, for example, on the platform of a transport complex or the platform of support of productive and sales activity of small and medium-sized businesses that is already provided in the federal budget for 2019.

The state, for example, can join in dialog with industry players regarding search of the platform solution for decrease in transaction costs or stimulate participants of the industry on creation of SRO in which transparent and fair industry rules of interaction will be developed. At the same time they can be tested on the basis of new digital technologies. It is a format of "a regulatory sandbox" which example the MasterChain project supervised by the Bank of Russia can be.

As shows experience of creation of digital platforms in the commercial sector, digital platforms become successful at observance of a number of conditions and readiness of the market.

First, key interaction around which it has to be created should be accurately defined and afterwards develop the digital platform. Secondly, the market should be characterized by a large number of participants from suppliers and from consumers, and costs of both parties for interaction are rather high. Thirdly, infrastructure of interaction of the platform should be open for market participants, and an input threshold on the platform low. At last, modern platforms constantly accumulate large volumes of the participants given about behavior who can be used afterwards for optimization of work of platforms and become its competitive advantage.

In the presence of the above-named conditions the state should create incentives for emergence of platforms. It can be incentives of several types:

1. предоставление access to data, crucial for formation of the digital platform, from GISOV, to lists, registers, etc. (for example, data on the real estate and the encumbrances imposed on it are crucial for start of services of sale and real estate lease) and also to necessary state infrastructure of interaction with the platform (for example, SMEV, ESIA, NSUD);
2. предоставление preferential terms and rates for taxation, the state grants and subsidies;
3. создание regulatory sandboxes for those spheres and the industries, where high transactional costs, a large number of intermediaries between suppliers and consumers fragmented untied supply sources of goods (services), etc.;
4. популяризация industry platform services;
5. разработка the regulatory framework providing equal access to the platform for all participants, efficient mechanisms of the dispute resolution, providing the state guarantees of legality of interactions through the platform.

In addition, it is necessary to consider that the largest international platforms (Facebook, Uber, AliExpress, etc.) open at the same time in all national markets. Therefore it is important to construct the card of the industries and to analyze presence at it of the created platforms. In case several industry platforms are already created, and they compete among themselves (Yandex taxi and Gett), the state stimulation is inexpedient.

Outputs

Thus, the digital platform is the system of formal and informal rules and algorithms of interaction between suppliers and consumers of goods (services) intended for cost reduction of interaction between them and provided with an architectural stack of the hardware-software providing necessary for storage and the analysis of digital data about participants of interaction.

The digital platform cardinally changes the system of the relations between participants of interaction as in due time the traffic light delivered at the intersection replaced the duty point-policeman.

Thus, state regulation during a digital era can directly be performed by the platform as the tool for algorithmic setup and the organization of the key processes of interaction proceeding in the industry.

The big transparency and accountability in activity of participants of the industry at significant cost reduction of interaction and increase in degree of openness in the competition in the industry and, as a result, quality improvement of goods (services) and decrease in their price becomes the main criterion of efficiency of implementation of industry platforms. To others, but important criterion it is possible to consider success of an output of the industry Russian platform at a certain level of support of the state on the international level and joining of participants to it from other countries.

Necessary, but not first-priority condition of implementation of platform approach in a state administration is the modification of civil and industry legislative regulation directed to stimulation of the competition between platforms in the industries where it is reasonable. It is at the same time necessary to strengthen the antitrust law taking into account development of platforms in the industries with restrained competition.

The state will be unconditional to use platform approach to development created by GIS, first of all, for those solutions, which readiness for platform transformation rather high (the described examples of portals of state procurements, state services and also civil services, NSUD, etc.).

The efficiency of a platformization depends also on quality of management of large and expensive projects at the heart of which not only digital, but also organizational transformation. In this regard it is reasonable to develop partnership with the suppliers of digital solutions, contractors ensuring functioning of GIS for the benefit of different reference groups. Partnership in specific industry means also transfer of separate functions (taxation, the conflict resolution, the organization and control of transactions) to partners on the platform.

We do not expect from the state of rapid planned implementation of industry platforms more likely we see need for manifestation of flexibility when choosing instruments of regulation depending on a situation in the separate industry. Use of the state data and the state infrastructure for access to bigger number of consumers in minimum expensive way (a Unified identification and authentication system, SIEI, different API, network infrastructure, etc.) becomes a subject of permanent dialog with industry players.

Digital platforms for the state are not the next fashionable (haypovy) trend. It is the instrument of real transformation of the industries for benefit of more fair and transparent competition on the basis of digital state regulation. We believe that the provided platform approach expressed through the corresponding organizational, legal and technology mechanisms can give notable social and economic effect for all society and justify objectively high costs which accompany process of digital transformation.

Authors:

• Dmitriyeva Natalya Evgenyevna, senior research associate of Institute of the public and municipal administration.
• Zhulin Andrey Borisovich, director of Institute of the public and municipal administration
• Plaksin Sergey Mikhaylovich, associate director of Institute of the public and municipal administration
• Sinyatullina Lyaylya Habibovna, head of department of perspective researches of Institute of the public and municipal administration
• Styrin Evgeny Mikhaylovich, leading researcher of Institute of the public and municipal administration

See Also

• National program Digital economy of the Russian Federation
• End-to-end technologies of digital economy
• Overview: Informatization of a public sector of 2019

Notes