Aihearkisto: Articles in English

Making the game better at Nordic Game Conference in Malmö

Nordic Game Conference in Malmö has grown to be the most significant game industry professionals gathering in Europe during its 15 years. In 2018 over 2000 game industry professionals and students enjoyed presentations by over 178 speakers at Nordic Game 2018 (NG18). This year’s NG18 had an Impact track, which caught the eye of GameChangers –project as the sessions promised to make us think more deeply about the impact of the games and how we create them has on the world. The track was put together by Kate Edwards and Tsahi Liberman, who are both active advocates for diversity and inclusiveness in the games industry. The Impact track had eight sessions including a workshop and a seminar during the three conference days. The Impact track was a welcome addition to the conference program and its influence potential was huge. In this article, we will share some ideas and insights the Impact track sessions but also commenting on a few other talks about diversity.

Authors: Ria Gynther & Essi Prykäri

Game industry and stereotypes

The game industry has a reputation for being bro-club; the reputation is unfortunately not entirely unfound. According to International Game Developers Association (IGDA) video game industry is still predominated by young, heterosexual, white males (Gosse, Legault, O’Meara & Weststar 2016, 6-10, 38). IGDAs international survey data indicates that 74% of game developers are men, 21% are women and 5% identified themselves as transgender or other (Weststar, O’Meara & Legault 2017, 11).

Carolyn Petit and Anita Sarkeesian are spokespersons of inclusive and representative media landscape and they both work with Feminist Frequency, a not-for-profit educational organization. They held a workshop to give game designers concrete tools for creating compelling and diverse characters in their games. Workshop started with analyzing characters from well-known games. As stated earlier, most of game designers are young, white and men, this is also true when we take a closer look on most famous video game characters for example Nathan Drake from Uncharted and Link from the Zelda series.

During the workshop, the participants were encouraged to think about diversity from different angles, not just gender and race, but also about sexual orientation, cultural background, able-bodied vs. disability and age. Carolyn and Anita also challenged the participants to think about how these different qualities are portrayed, for example: is the Asian person a math genius in the game, do the women have agency or are they just tropes, are all heroes young and male. Does the portrayal or the characters enforce stereotypes or try to change them?

PICTURE 1. Carolyn Petit and Anita Sarkeesian talking about positive character examples at Nordic Game 2018.

Luckily, the industry has woken up to the issue and there are several initiatives to help diversify the industry and there are more and more playable female characters for example Aloy from Horizon Zero Dawn, Ellie from Last of Us II and Jesse from Control.

The Path to Impact

Kate Edwards gave a very empowering talk about making a change in the games industry. Game industry, particular in the US, is at the moment unappreciated. For example, 40% of the US citizens believe that games are linked to violent crime in US and 60% believe that games are mostly played by men. Misconceptions about the people working within the industry include statements such as ”they are people who can’t get a real job” and ”they are only motivated by money”. These types of stigmas are hard to break and are one factor that prevents game industry to grow to be more inclusive.

In the light of recent studies, game industry itself is also filled with cultural norms, biases and distorted gender beliefs towards women in video game industry. Due to these, women are marginalized even more by being categorized only to certain roles, instead of seeing the full potential or expertise behind their gender (Harvey & Shepherd 2017, 494; Styhre et al.2016, 1-2.)

Kate Edwards addressed similar issues in her sessions, but also reminded us that they can be easily overcome. She encouraged us all to become Creator-Advocates, and speak for diversity. We cannot change the world alone, but we can make a small change for the better.

PICTURE 2. Kate Edwards talking about becoming a Creator-Advocate.

Luckily strong speeches advocating the need and the power of diversity we’re also given outside the Impact track.  Robin Hunicke’s Experimental Game Design – the next five years was one of the most influential speeches during the conference and the only one of the track that was held in main stage. Another powerful talk on the main stage was Angie Smets’s talk Horizon Zero Dawn – a studio’s perspective, which also served as a good reminder that successful games can also have female protagonists. Both sessions are available on Nordic Game’s YouTube channel.

Diversity and women in and behind the games were not absent from the social events at the conference. The gala dinner was followed by the joyful Marioke [karaoke songs rewritten about video games and game development] where the disco hit It’s raining men turned into an ironic take on men explaining first person shooter games to female players. Explaining men, Hallelujah! Explaining men!

Afterthoughts

Games are powerful and unique medium; they are both products of culture as well as create culture (Deuze et al. 2007, 345). This is one of the main reasons why tracks like these are important. Idea behind the NG18 Impact track was to encourage games industry professionals to think deeply about the impact their games have on our world, and how the way games are made contribute to this. We believe this was achieved, but in a much smaller scale than what could have been possible. Only one of the tracks speeches was presented on the main stage and in some cases the amount of interested participants exceeded the capacity of the chosen seminar rooms. Also, most of the participants seemed already interested on these subjects or represent the minorities in question. Unfortunately, the lack of stereotypical game designers was evident, these are the groups that would benefit the most from the eye opening talks and workshops such as presented within this track.

It is crucial to show that women, and other minorities, can be and are an important part of the games industry, that it is not just a ”bro-club”. Diversity and inclusiveness create better teams, give people new ideas and widen horizons. This is something we’re also aiming to do in the GameChangers – Women in the Game Industry project.  Start making a change!

References

Deuze, M., Martin, C. & Allen, C. 2007. The Professional Identity of Gameworkers. Convergence: The International Journal of Research into New Media Technologies. [Electronic journal]. Vol. 13(4), 335-353. [Cited 10 Jun 2018]. Available at: https://doi.org/10.1177/1354856507081947

Gosse, C., Legault, M-J., O’Meara, V. & Weststar, J. 2016. Diversity in the Game Industry Report.  [Online document]. Toronto: IGDA : Developer Satisfaction Survey Resources. [Cited 10 Jun 2018]. Available at: https://cdn.ymaws.com/www.igda.org/resource/collection/CB31CE86-F8EE-4AE3-B46A-148490336605/IGDA_DSS14-15_DiversityReport_Aug2016_Final.pdf

Harvey, A. & Shepherd, T. 2017. When passion isn’t enough: gender, affect and credibility in digital games design. International Journal of Cultural Studies. [Electronic journal]. Vol 20 (5), 492 – 508. [Cited 10 Jun 2018]. Available at: https://doi.org/10.1177/1367877916636140

Styhre, A., Remneland-Wikhamn, B., Szczepanska, A-M. & Ljungberg, J. 2016. Masculine domination and gender subtexts: The role of female professionals in the renewal of the Swedish video game industry. Culture and Organization. [Electronic journal]. Vol 24(3), 244-261. [Cited 10 Jun 2018].  Available at: https://doi.org/10.1080/14759551.2015.1131689 

Weststar, J., O’Meara, V. & Legault, M-J. 2017. Developer Satisfaction Survey 2017. [Online document]. Toronto: IGDA. [Cited 10 Jun 2018]. Available at: https://c.ymcdn.com/sites/www.igda.org/resource/resmgr/2017_DSS_/!IGDA_DSS_2017_SummaryReport.pdf

About the authors

Ria Gynther works as a project coordinator on the GameChangers –project at Lahti University of Applied Sciences and is a student in the Internet and Game studies master’s program at University of Tampere.

Essi Prykäri works part-time as a project advisor on the GameChangers –project at Lahti University of Applied Sciences. She is a keen gamer and a feminist.

Pictures: Essi Prykäri

Published 27.6.2018

Reference to this publication

Gynther, R. & Prykäri, E. 2018. Making the game better at Nordic Game Conference in Malmö. LAMK Pro. [Electronic magazine]. [Cited and date of citation]. Available at: http://www.lamkpub.fi/2018/06/27/making-the-game-better-at-nordic-game-conference-in-malmo

 

Artificial intelligence should not be unleashed

Like shareholders and portfolio managers, we all make decisions about smaller or bigger investments. Every decision of spending matters somewhere. Today, robo-advisers help decision-making. The development of artificial intelligence (AI) accelerates exponentially, and AI penetrates to almost every industry. At the same time, we are getting more and more conscious about the sustainability and responsibility of our spending. This article aims to discuss the importance of responsibility in investment decisions made by algorithms.

Authors: Marjut Karelberg and Sirpa Varajärvi

Responsibility of investments

According to Finsif (2018), responsible investment means involving ESG matters (Environment, Social and Governance) in investment activities to improve the portfolio’s return and risk profile. There is no one or only way of responsible investment. Each investor chooses tools appropriate to his own investment strategy. An investor can use ESG matters from different approaches. Responsible investment concerns all asset types.

According to Virtanen (2016), in Buddhism, consciousness is the key for an individual to become perfect in morality and in wisdom. From the point of view of cognitive neuroscience, consciousness is understood as a brain-induced phenomenon. So far, it has not been possible to explain how this is happening. AI can possess morality and may be capable to ethical reasoning. The ability of AI to engage in moral activity depends on the definition of a moral actor. Making ethical decisions is still a challenge. Human free will and free will [generally] are two different concepts. Implementation of free will to AI is difficult. (Virtanen 2016.) Artificial intelligence does not think like people, it does not have morality – it is unable to take care of others, which is essential in ethics and humankind (Himma 2009).

Unpredictable AI, unpredictable risks

According to Heinäsmäki (2015), digitalization means the integration of digital technology into all life and activities. When algorithms are programmed to learn independently, it takes them further away from human control, towards singularity as computers develop their own intelligence – “Whereas the short-term impact of AI depends on who controls it, the long-term impact depends on whether it can be controlled at all” (Hawking et al.  2014). Independent algorithms will dominate digitalization in the future. Because algorithms are inhuman, they cause risks we cannot even imagine – therefore we should start to develop responsible digitality and responsible algorithms. ESG, i.e. environmental, social and governmental issues in financing, are the starting point of responsible thinking. But, ESG is just an abbreviation of a concept that could be a key for a better investment future.

Algorithms have a very effective performance. Decisions of investments are to be integrated to AI, which is the only way to survive with future demands of Big Data processing. Despite all the benefits, that algorithms can offer, AI is a dog that should not be unleashed. It will obey, if its creator knows the length of the leash that can be given for it. The creators and developers of AI are in a key position in determining how we people – who think can master everything – will succeed and survive with the future decisions made by AI. Through these key groups, we achieve the concept and the ideas of ESG. It is important to realize, what kind of possibilities AI can offer in reaching responsible thinking, and how AI can make a positive impact on decision-making in the future investing activities.

One Earth to live

We need to preserve and maintain the viability of the Earth. There would not be any problems with unpredictable AI, if humans would think about preserving the mankind and the whole diversity of the nature, instead of gaining individual profit.

The climate viability length is a riddle we cannot ignore. By the right choices, we can affect to it, at least we can reduce the destructive and too risky development of singularity that sooner leads to worse disaster. We may not have the next 50-100 years this kind of living conditions on Earth, as we have now. The destroying of the planet causes huge challenges for those who decide about the allocation of the resources – the targets of investments. We can count the life expectancy of Earth, but can we live with the results that offer just desolation? We have only one Earth to live.

The idea of learning machines is not new, but still it is very much alive. We cannot control AI, if we do not know the route of its development. AI’s developers know the risks of singularity. Nowadays, the AI is at a stage where it begins to turn more human-independent than ever before. Neural networks and machine learning makes AI more and more human-independent, and algorithms are already the tools of today’s economic actions. How do we make safe decisions of future investments? At some level, it is going to be the AI, who decides future investment targets, because we have given it a role in the investment world – only during a few last years, because the amount of data has exponentially increased.

Artificial investors create our future despite the challenges of insecurity

Today’s media offers a lot of responsibility issues and ESG-information as well as AI knowledge. Also, they offer estimations how algorithms are going to develop in the future. The literal sources along with the media, are not offering much information or prognosis about responsible investments or investment’s development approximately until 10-30 years. The responsibility aspect of investment decisions made by algorithms was examined in a recently published master’s thesis written by Marjut Karelberg (2018). The study included a survey among investment and AI experts. The main results of the survey were that AI will have more and more influence in the future in making investment decisions. However, many AI-developers are not aware of ESG, which is an alarming signal. The future AI-developers have a lot of power for the future of mankind – they develop the decision-making devices. They create the future digital brains. More resources for educating AI developers to understand ESG matters are needed. They need better competence about responsible thinking – sustainability and ethics. In this situation, Karelberg (2018) recommends – if we want responsibility to be the major competitive factor in the future investment decision-making – that, the developing of AI is transparent and controlled, and, that it’s resourced generously enough.

References

Finsif. 2018. Mitä vastuullinen sijoittaminen tarkoittaa? Finsif. [Cited 8 Feb 2018]. Available at: https://www.finsif.fi/mita-se-on

Hawking, S., Russell, S., Tegmark, M. & Wilczek, F. 2014. Transcendence looks at the implications of artificial intelligence – but are we taking AI seriously enough? The Independent. [Electronic newspaper]. 1 May 2014. [Cited 10 May 2018]. Available at: https://www.independent.co.uk/news/science/stephen-hawking-transcendence-looks-at-the-implications-of-artificial-intelligence-but-are-we-taking-9313474.html

Heinäsmäki, M. 2015. Digitalisaation vaikutus suomalaisten hyvinvointiin. Digitalist. 25 May 2015. [Cited 5 Nov 2017]. Available at: https://digitalist.global/talks/digitalisaation-vaikutus-suomalaisten-hyvinvointiin/

Himma, K. E. 2009. Artificial agency, consciousness, and the criteria for moral agency: what properties must an artificial agent have to be a moral agent? Ethics and Information Technology. [Electronic  journal]. Vol. 11(1), 19–29. [Cited 10 Jun 2018]. Available at: https://doi.org/10.1007/s10676-008-9167-5

Karelberg, M. 2018. The future of responsible investments in the context of algorithm-based decisions. [Online document]. Master’s Thesis. Lahti University of Applied Sciences. Lahti. [Cited 8 Jun 2018]. Available at: http://urn.fi/URN:NBN:fi:amk-201805178710

Virtanen, E-M. 2016. Robottien tietoisuus, moraali ja vapaa tahto? Theravāda-buddhalainen näkökulma. [Online document]. Master’s Thesis. University of Helsinki, Faculty of Theology, Department of Systematic Theology. Helsinki. [Cited 8 Jun 2018]. Available at: http://urn.fi/URN:NBN:fi:hulib-201610122845

About the authors

Marjut Karelberg (karelbergm@gmail.com) is an independent observer and has graduated from LAMK Master School. She considers responsibility a significant issue to explore – especially, its development in the current investment environment where the increasing and constant use of artificial intelligence reduces the ability to prognosticate the future.

Sirpa Varajärvi works as a Senior Lecturer at the Faculty of Business and Hospitality Management, Lahti University of Applied Sciences.

Illustration: https://pixabay.com/fi/teko%C3%A4ly-teknologia-futuristinen-3262753/ (CC0)

Published 21.6.2018

Reference to this publication

Karelberg, M. & Varajärvi, S. 2018. Artificial intelligence should not be unleashed. LAMK Pro. [Electronic magazine]. [Cited and date of citation]. Available at: http://www.lamkpub.fi/2018/06/21/artificial-intelligence-should-not-be-unleashed

Marketing communications in a company whose products are designed for children

The article raises an issue of marketing to children. Companies usually do not readily admit that they promote products to children, despite the fact that they are selling products to children as a customer group. The reason behind it is that the subject of marketing to children is ethically sensitive. Nevertheless, the article tells how marketers can reach children in order to communicate the value of companies’ products and build strong customer relationships.

Authors: Anna Elizarova and Riku Nummikoski

Marketing to children

The question how companies whose products are designed for children can improve marketing communications was studied in the Bachelor’s thesis of Anna Elizarova (2018) on an example of the case company that produces modular programmable robotics kits for children 6-12 years of age. The article gives a brief introduction to the research and discusses additional ways of understanding promotional activities in child-oriented businesses.

In marketing research, children are interesting primarily as consumers. Children represent a large group of the population, they are also major buyers of certain types of products, e.g. toys and sweets. Besides, children are responsive to marketing messages and strongly influenced by advertising.  Children’s significance as consumers and consumption influencers was recognised in the 1950s. Very young children begin to develop preferences and most of them are able to recognize brands from the age of three. (Preston 2016.)

Child-oriented markets are growing since women in the developed countries tend to have fewer children and have them later in life than it used to be in the past. Thanks to this, parents commonly have more resources available at the time when they have children, especially in dual-working families. This contributes to richer parents, better-educated children and a more sophisticated market for children. In addition, thanks to these traits, parents and children have increasingly well-informed, refined tastes and opinions in the sphere of consumerism. (Gunter & Furnham 2008.)

To develop marketing communications in a company whose products are designed for children, it is essential to deepen understanding of children as a customer group. Children just like adults are economically active members of society. However, their needs, values and perceptions differ from what adults have. To promote products to children, a number of factors should be considered.

First and foremost, children at different stages of their cognitive development have different needs, abilities and consumer behaviour patterns. The youngest children at the age of three are able to recognise brands and logos. Approximately at the age of 6 children start reading, they are exposed largely to different types of media, and they have their own attitudes towards brands. The controversial thing is that it is still dubious whether children of these ages are able to recognize the persuasive intent of commercial messages fully, especially due to advancements in online marketing. Young people have powers to like, dislike and even reject certain products. Between the analytical stage of 7-11 years, they shift from egocentric orientation to a point when they start to differentiate points of view.

Second, children as consumers are affected by several influential agents – parents, peers, mass media and a direct experience. Doing marketing to children is to a certain extent a rewarding business since children are a fairly homogeneous group around the industrialised world. Children’s culture is less sophisticated than the culture of adults. Children of young age globally share very much the same needs and wants. It does not mean that children are the same everywhere, but that they have more in common than they have differences. (Marshall 2010, 1-16.)

Third, children influence family purchases. This is happening because parents ask for advice from their children and because children can pressure parents to buy certain products. They can do it both ways: pestering parents with perseverance over and over again and communicating the importance of the product for them. (MediaSmarts 2018.)

Social Media and Children

Social media companies often place age limits for children below a certain age, in case of Facebook, Twitter, Instagram, Snapchat and YouTube the threshold is of 13 years old. In many states, laws govern the collection of data about children. It means that children cannot use a certain type of websites without a parental consent. Nevertheless, primary-age children use the Internet and social media to stay connected, mobile and social with their friends. Children use a wide variety of internet-enabled devices such as computers, laptops, mobile devices and game consoles. Moreover, they are not always using it under parental control and supervision, but also at schools and at friends’ houses. In any case, they are largely exposed to social media, and for many of them, this is an integral part of life. (O’Neale 2013; Jamieson 2016.)

Currently, YouTube is the biggest children’s entertainment platform in the world. Video content, in general, is more popular with millennials. Nearly two thirds of millennials would rather watch a video from a brand than read a text. In terms of video marketing, specialists agree that it is essential, not optional to use videos to promote brands. Millennials find watching videos helpful while shopping online, and statistics say that the likelihood of reading newsletters with a video in it increases. The same can be said about Generation Z. Visual information is so powerful because it is processed by brain much faster. Moreover, people remember stories better than hard facts. In fact, images and videos tell stories faster than text. (Gillett, R. 2014.)

Children are the future

The marketing communications to children established to make a positive impact on consumer’s lives, e.g. for educational purposes solely, is beneficial for both companies and children. Responsible companies promote healthier choices for children, advice and support parents on products and services for their children and protect children as such. Such companies communicate values of their product in a way that is easy to understand for children, assisting parents in engaging them in healthier diets, educational process and etc. For instance, the case company has developed a robot that teaches children robotics and coding that will prepare children for their future and promote its services to children. All in all, marketers in child-oriented businesses reach children directly accidentally and intentionally, and the author of the article wishes to emphasize the positive outcomes of such practices.

References

Elizarova, A. 2018. Understanding Children as a Customer Group. Case: Company X. [Online document]. Bachelor’s thesis. Lahti University of Applied Sciences, Faculty of Business and Hospitality Management. Lahti. [Cited 12 June 2018]. Available at: http://urn.fi/URN:NBN:fi:amk-2018061213551

Gillett, R. 2014. Why We’re More Likely to Remember Content with Images and Video (Infographic). Fast Company. [Electronic magazine]. [Cited 13 May 2018]. Available at: https://www.fastcompany.com/3035856/why-were-morelikely-to-remember-content-with-images-and-video-infogr

Gunter, B., Furnham A. 2008. Children as consumers. London, United Kingdom: Routledge.

Jamieson, S. 2016. Children ignore age limits by opening social media accounts. The Telegraph . [Electronic magazine]. [Cited 7 June 2018]. Available at: https://www.telegraph.co.uk/news/health/children/12147629/Childrenignore-age-limits-by-opening-social-media-accounts.html

Marshall, D. 2010. Understanding Children as Consumers. London, United Kingdom: SAGE Publications.

MediaSmarts. 2018. How Marketers Target Kids. [Cited 7 June 2018]. Available at: http://mediasmarts.ca/digital-media-literacy/media-issues/marketing-consumerism/how-marketers-target-kids

O’Neale, R. 2013. Kids online: The statistics. KidsMatter. [Cited 7 June 2018]. Available at: https://www.kidsmatter.edu.au/health-and-community/enewsletter/kids-online-statistics

Preston, C. 2016. Pre-school children and marketing communication. International Journal of Consumer Studies. Vol.40(5), 618-623.

About the authors

Anna Elizarova has studied International Business at Lahti University of Applied Sciences and has graduated and received a BBA degree in June 2018.

Riku Nummikoski works as a Lecturer at the Faculty of Business and Hospitality Management, Lahti University of Applied Sciences.

Illustration: https://pixabay.com/en/aroni-arsa-children-little-model-738302/ (CC0)

Published 13.6.2018

Reference to this publication

Elizarova, A. & Nummikoski, R. 2018. Marketing communications in a company whose products are designed for children. LAMK Pro. [Electronic magazine]. [Cited and date of citation]. Available at: http://www.lamkpub.fi/2018/06/13/marketing-communications-in-a-company-whose-products-are-designed-for-children/

The adoption of E-invoicing in Vietnam

Electronic invoicing undoubtedly performs a crucial role in the digitalization of business operations. It has gained foothold throughout the world. However, some businesses are still skeptical about the implementation of e-invoicing. This article discusses the benefits and challenges related to the switch from paper-based to electronic invoicing. A special focus is on Vietnamese market, where the Ministry of Finance has taken measures to accelerate the replacement of paper-based invoicing with electronic one.

Authors: Ha Giang Le and Sirpa Varajärvi

E-invoicing and its benefits

The traditional method of billing is paper-based invoicing. However, e-invoicing has proved to be a competitive method as it is faster and more efficient than paper-based invoicing. Koch (2009, 99) defines electronic invoicing as “the sending, receipt and storage of invoices in electronic format without the use of paper-based invoices as tax originals”. To put in other words, e-invoicing eliminates the use of paper in every step.

Why companies decide to switch to paperless invoice? The top 9 benefits of e-invoicing are summarised in Figure 1.

Figure 1: Top 9 benefits of e-invoicing

Companies can benefit from e-invoicing process in many ways. Touchless process is the first advantage of e-invoicing. Another benefit is invoice tracking – e-invoicing automates this process and makes it more efficient. It is inevitable that a higher integration level among accounting systems of the buyer and the seller stems from the implementation of e-invoicing. This leads to transparency of information. At the same time, account reconciliation is improved as invoices are accessible to both trading partners. Therefore, e-invoicing ensures the automation of reconciliation and thus a faster payment process. Since the whole process is monitored automatically, no more time is spent on creating, delivering and routing invoices to account payable department. Hence, e-invoicing is time-saving. (ICG consulting 2018.)

Undoubtedly, e-invoicing brings cost effectiveness to firms. Direct costs – such as ink, paper and mailing costs – related to paper-based invoicing, can form a significant sum altogether. Less money spent on invoicing means more money allocated to other important business activities, and thus competitiveness may be improved. An additional value of e-invoicing is cash management. Once sent, electronic invoices are visible immediately for the receivers. Hence, cash managers are aware of cash flow and can enhance financial forecast accuracy. Finally, environmental benefits are also to be considered. By implemeting e-invoicing, and thus decreasing paper consumption, companies can reduce their carbon footprint. (Ruisaho 2018.)

Challenges related to e-invoicing adoption in Vietnam

Although e-invoicing might be a great solution, businesses in Vietnam are still reluctant to adopt this method. Do the benefits overweight the challenges that firms will face during the adoption? The mass adoption of e-invoicing undoubtedly poses challenges which vary from business to business. The most common challenges that companies have to tackle were studied in a research made by Ha Giang Le as a Bachelor’s Thesis at Lahti University of Applied Sciences. The research was carried out as a case study on Danang Power Company, which is a subsidiary of Electricity of Vietnam Group, and one of the few pioneers in e-invoicing in Vietnam.

The empirical research included two interviews with the case company’s personnel and a survey with its clients. Based on the findings of the research, the challenges are divided into two categories, namely internal challenges and external challenges. Internal challenges are challenges that affect the company’s success of switching to paperless invoice. Contrastively, challenges that the company faces while convincing its customers to adopt e-invoicing are external challenges. (Le 2018.) Challenges are described in table 1.

Table 1: Challenges of the migration to electronic invoice

Among the challenges mentioned above, Bartlomiej Wojtowicz (2015) from Comarch EDI pointed out top biggest challenges that firms are facing. The first big challenge is the resistance to change in small businesses. Besides, data security is another reason for companies to postpone the adoption of e-invoicing. Lastly, technical requirements in e-invoicing process discourage the acceptance of electronic billing in firms.

In order to promote the national spread of e-invoicing in Vietnam, there is a quest for solutions to such matters. The study of the case company is a good example to understand what challenges Vietnamese firms are facing. The possible recommendations are illustrated in table 2.

Table 2: Recommendations for the development of e-invoicing

In order to effectively implement e-invoicing, the case company requires several strategies. Firstly, the company is incapable of upgrading the whole system simultaneously, and thus it should allocate its resources and power reasonably. Besides, the higher the quality of e-invoices is, the more applicable they are. E-invoicing should be treated as a matter of all departments for better ongoing services. Finally, helping its customers to understand e-invoicing process and benefits creates incentive for them to use e-invoicing. (Le 2018.)

Conclusion

The adoption of e-invoicing is obviously associated with a wide range of benefits. However, the process poses a lot of varying challenges, depending on the specific features of the company or business involved.

The transition from paper invoice to paperless one in the Power Company in Vietnam is a typical example of going digital in business. This company in particular and other businesses in general are supposed to profoundly analyse the internal and external factors arising to ensure a favorable adoption of e-invoicing.

References

ICG Consulting. 6 benefits of Electronic Invoicing. [Cited 30 May 2018]. Available at: http://www.icgconsulting.com/6-benefits-of-electronic-invoicing

Koch, B. 2009. E-invoicing/E-billing in Europe: Taking the next step towards an automated and optimised process. [Online document]. Billentis. [Cited 30 May 2018]. Available at: https://www.norstella.no/getfile.php/1295634.177.ursydetwpv/Extract_Market_Report_Europe_2009.pdf

Le, G. 2018. Adoption of E-invoicing in Vietnam – case: Electricity of Vietnam Group, Danang Power Company. [Online document]. Bachelor’s thesis. Degree Programme in International Business. Lahti: Lahti University of Applied Sciences. [Cited 30 May April 2018]. Available at: http://urn.fi/URN:NBN:fi:amk-201804275705

Ruisaho, M. 2014. Why we switch to e-invoicing and how it benefits you? Greencarrier. [Cited 30 May 2018]. Available at:                                                                                           https://blog.greencarrier.com/why-we-switch-to-e-invoicing-and-how-it-benefits-you/

Wojtowicz, B. 2015. 4 Challenges For E-invoicing A hot global topic. E-invoicing platform. [Cited 30 May 2018]. Available at: https://eeiplatform.com/16679/4-challenges-for-e-invoicing-a-hot-global-topic/

About the authors

Ha Giang Le has studied Business and Administration at Faculty of Business and Hospitality Management at Lahti University of Applied Sciences and has graduated and received a BBA degree in May 2018.

Sirpa Varajärvi works as a Senior Lecturer at the Faculty of Business and Hospitality Management, Lahti University of Applied Sciences.

Illustration: https://pixabay.com/fi/binaarinen-k%C3%A4det-n%C3%A4pp%C3%A4imist%C3%B6-2372131 (CC0)

Published 8.6.2018

Reference to this publication

Le, H.G., Maturana, T. & Varajärvi, S. 2018. The adoption of E-invoicing in Vietnam. LAMK Pro. [Electronic magazine]. [Cited and date of citation]. Available at: http://www.lamkpub.fi/2018/06/08/the-adoption-of-e-invoicing-in-vietnam

Medicine pricing and its relevance to healthcare workers and patients

Medicines, just like any commodity are commanded by economic laws of supply and demand. However, medicines are not and should not be treated as any ordinary product because they are of such great importance to patients in need for treatment. Pharmaceutical prices are affected by multiple factors, each of them offering a significant level of complexity. Understanding the basics of medicine pricing, the economic burden on health budgets, and its impact on healthcare should be of great concern to all, healthcare workers and patients alike.

Authors: Joy Duran, Tomas Maturana and Anne Vuori

Factors affecting medicine pricing

The constant increase of pharmaceutical expenditure is of great concern since it threatens the sustainability of healthcare budgets (WHO 2008, 1). In developed nations the problem is aggravated by aging population, which increases the demand for services (Halpenny 2016, 546). Low and middle income countries spend up to 60% of their healthcare budget in pharmaceutical products, compared to 18% in high income countries (WHO 2015, 4). This is clear evidence of the serious level of inequality that rules the access to essential medicines across borders.

Medicine prices are influenced by multiple factors and its regulation is widely practiced across the world, independently of the level of development of a country. Public providers of healthcare need to hold some level of control over public expenditure in pharmaceutical products to protect the sustainability of their systems and the citizen’s access to treatment. Consequently, multiple systems and policies aim to control medicine pricing.

Price negotiation tools are utilized by most countries; aiming to control their health budgets and safeguard public access to healthcare. External Reference Pricing (ERP) is a fairly simple and popular system that aims to obtain the cheapest drug prices by comparison with other countries (Espin et al. 2011, 2-3; Acosta et al. 2014, 6). Pharmaceutical companies often fight ERP by adopting international pricing and launch sequence strategies in order to avoid negative impacts on the company’s revenues. ERP can also motivate parallel trade, and/or hurt investment in Research & Development since manufacturers obtain lower than desired profits. (Espin et al. 2011, 11; Rémuzat et al. 2015, 9; Persson & Jonsson 2015, 4-5, 7; Schulenburg et al. 2011, 7-8.)

Value-Based Pricing (VBP) is an invaluable tool that, in combination with Health Technology Assessment (HTA), determines an appropriate price to pay according to a drugs’ therapeutic efficacy. However, the price will be set by the value that high income countries with strong HTA capacity deem fit. This value-based price is often not affordable and neither suitable for lower income countries with limited or no HTA. (Kaló et al. 2013, 735; Faden et al. 2011, 21, 29; Whyte & Hall 2013, 20.)

Along the supply chain (Figure 1), mark-up regulation attempts to set limits to the profit margins of distributors and retailers (pharmacies) of medicines. Most European countries use some form of mark-up. Nevertheless, its effectivity depends on enforcement tools and reliable price/sales monitoring mechanisms to prevent market manipulation by distributors and retailers.

Taxes are also a direct contributor to the price of pharmaceuticals. Although fiscal policies vary across the world, any tax poses different levels of economic burden on consumers and studies put in question the morality of taxing medicines (Creese 2011, 15-16, 23).

Figure 1. Traditional Pharmaceutical Supply Chain

Intellectual Property Rights and patents are meant to promote innovation for new medicines as companies can remunerate their spending in research and development. While it works as supposed at some extent; patents can be abused and experiences of lengthened patent terms have proven not to increase innovation (Halpenny 2016, 544-545). The patent system also leads to neglected diseases because for some illnesses it is not profitable to develop treatments (Stiglitz & Jayadev 2010, 220). Finally, the ability of a single entity to control the sale of possibly life saving medicines for an extended period of time can have catastrophic effects. Particularly for countries which cannot afford the prices demanded by the patentees. This is a problem affecting both the developed and developing world (Satyanarayana & Srivastava 2010, 53; Stiglitz & Jayadev 2010, 225).

Competition, especially in the case of generic drugs, can motivate the highest price decreases as compared to other price containment tools, with 10 generic competitors a given price can decrease up to 70% (Schweitzer & Comanor 2011, 1557). Competition must be commanded by strict laws and regulations to ensure that anti-competitive behavior remains unsolicited. Without laws regulating competition, mergers and acquisitions of companies lead to monopolies and will inflate prices leading to unaffordability and in some cases drug shortages. (Hawkins 2011; Gagnon & Volesky 2017.)

The factors discussed (Figure 2), interrelatedly affect medicine prices and can have positive outcomes such as mitigating public expenditure on pharmaceuticals, boosting innovation, and increasing availability. However, they can also cause inequity in availability due to economic differences resulting in unaffordable medicines and in some cases outright medicine shortages. The scope of influence of each factor varies from country to country, depending on laws and regulations, health policies, taxes, and economic conditions.

Figure 2. Factors affecting medicine pricing

A topic of concern for healthcare workers and patients

Medicine pricing should be a topic of concern for nurses, other healthcare professionals, and patients alike. Nurses make up the largest group of healthcare workers. If financial resources are shifted towards higher and higher pharmaceutical bills, budget allocation for personnel will be under pressure potentially affecting nurses first. Furthermore, a limited budget will have a direct impact on quality and availability of health services, thus jeopardizing public health. This is why all healthcare workers should be aware of the importance of medicine pricing. Finally, the public in general, as users of healthcare systems, should know that the prices of pharmaceuticals determine public access to pharmaceutical therapies.

Well-informed healthcare workers have the potential to play a role in curving public expenditure in pharmaceutical products, thus influencing the budget allocation for health services. This can be done for example, by prioritizing cost-effective drug treatments (e.g. generic substitution) and by offering relevant guidance to patients concerning their purchases of medicines (e.g. fighting misconceptions).

References

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About the authors

Joy Duran & Tomas Maturana have studied Nursing at the Faculty of Social Sciences and Healthcare at Lahti University of Applied Sciences and will graduate in June 2018.

Anne Vuori PhD is working as senior teacher of nursing at Faculty of Social and Health Care at Lahti University of Applied Sciences.

Illustration: https://pixabay.com/fi/pillereit%C3%A4-l%C3%A4%C3%A4ketieteellinen-rahaa-943764/ (CC0)

Published 31.5.2018

Reference to this publication

Duran, J., Maturana, T. & Vuori, A. 2018. Medicine pricing and its relevance to healthcare workers and patients. LAMK Pro. [Electronic magazine]. [Cited and date of citation]. Available at: http://www.lamkpub.fi/2018/05/31/medicine-pricing-and-its-relevance-to-healthcare-workers-and-patients