Social security needs to change ahead of the Industry 4.0

Deputy Prime Minister Vu Duc Dam tells the 35th ASEAN Social Security Association Board Meeting in Nha Trang on Tuesday the social security mechanism will have to be changed as the fourth industrial revolution and free movement of labour have led to new kinds of jobs and ways of working. - VNA/VNS Photo Van Điep

Speaking at the two-day 35^th ASEAN Social Security Association (ASSA) Board Meeting that opened on Tuesday in Khanh Hoa Province’s Nha Trang City, he said employment has become less stable because more and more people do seasonal and short-term jobs.

Vietnam has 200,000 freelancers, the Deputy PM said.

“With a computer and the internet, people can work online for companies in other countries without travelling there.”

The rate of self-employment has increased, he said.

These things require regulations, duties of employers and employees and co-ordination between relevant agencies relating to social security to be changed, Dam said.

“The fourth industrial revolution is changing the world. Our responsibility is to make the changes become better. We should pay attention to solving problems the revolution brings about to develop better based on a goal which considers people as the centre of development.”

Many countries like Vietnam are incorporating this goal into development policies to ensure “no one is left behind”, he added.

ASSA chairman Suradej Waleeittikul said advances in IT and digitisation have had profound impacts across industries, changing the nature of work and affecting the provision of social security.

“The disruptive environment of globalisation has forced workers to become unemployed or look for jobs elsewhere. Many choose to work in the informal economy.”

The resulting mobility of workers requires governments to ensure their welfare, and the fundamental issue is having social security provisions which guarantee their rights and entitlements, even across borders, he said.

“For us, social security administrators, it creates both challenges and opportunities. As we develop policies and deliver services to the country’s labour force, new strategies are required to adapt to these emerging trends.

“In many countries, e-services have been introduced to simplify the administration and increase transparency.

“There is also the need to create a legal framework that can adapt continuously to globalisation. We have to keep up the leadership and understanding of these rapid changes in order to adapt and survive.”

According to Nguyen Thi Minh, director general of the Vietnam Social Security, ASSA needs to have a creative approach and long-term vision to fully use the experience and technology of the members.

ASSA should work together as one for sustainable social security for all in the ASEAN Community.

Assoc Prof Dr Tran Dinh Thien, former head of the Vietnam Institute of Economics, said the country should formulate a digital transformation strategy and manage it intelligently.

“The country should develop digitally-linked infrastructure and cyber security and create digital human resources.”

Gobal digital connections, through the web and smart tools, are bringing great opportunities for people to increase their general income though high risks are not unavoidable.

The need for renovating social insurance activities would become vigorous and urgent, he added.

Jens Schremmer of the International Social Security Association said non-standard work is fast emerging because of the revolution.

Digital platforms are enabling new services, he said.

“But the status of platform workers is often unclear. What are they: Employees? Self-employed? Or new categories? Why does it matter?”

Labour market transformations and social impacts create challenges for social security, he said.

“Social security institutions will make the difference.”

International exchanges between social security institutions would play a key role, he added.

Robert Palacios of the World Bank said traditional social insurance coverage based on payroll tax deductions from formal sector workers would lose the race with populations ageing.

“The approach of subsidising health insurance premiums for the poor, informal sector is helping increase the health insurance coverage and shows the way forward.

“Emerging technologies can help us differentiate those in the formal sector that have more capacity to save or contribute so we can use limited resources more efficiently.”

The line between social assistance and social insurance would increasingly be blurred to achieve universal social insurance coverage that is affordable, he added.