Digital economy boosts Vietnam’s economic growth

Another study by Australia’s Data 61 forecasts that Vietnam’s GDP may add an additional 162 billion USD in 20 years if the country’s digital transformation is successful.

Vietnam’s digital economy has grown since 2010 when smart phone coverage surpassed half of the population. It was boosted by the Industrial Revolution 4.0 in the last decade, when Vietnam’s infrastructure and business environment developed rapidly.

Dao Dinh Kha, Director of the IT Department of the Ministry of Information and Communications, said: “IT companies have grown rapidly. In the digital economy, creativity, competition, and sharing are implemented on the basis of digital technology, models, and skills.”

E-commerce, the most crucial factor of Vietnam’s digital economy, has grown strongly in terms of revenues and market scale totaling around 5.2 billion USD. In 2017, more than 83 million USD worth of foreign investment was poured into 21 Vietnamese e-commerce startups.

Mergers and Acquisitions (M&A) between e-commerce enterprises in Vietnam increased in value and number of transactions. The innovation startup ecology has grown. More than 3,000 innovative startups and 40 venture capital funds and angel investors were set up during the last 2 years.

According to the Ministry of Science and Technology, 78 financial technology (fintech) companies have been established in Vietnam. Vietnamese and foreign transport companies have launched several competitive apps like Grab, Uber, FastGo, Be, and VATO. Vietnamese travel startups have launched their applications like Mytour and Luxstay to compete with Booking, Agoda, and AirB&B.

Vietnam has basically completed connection of the data management of ministries, sectors and localities with the Government Office, moving up 10 places in the UN’s e-government rankings.

Minister and Head of the Government Office Mai Tien Dung said “In the 4th quarter of this year, we will complete the public service portal connecting public services from the central to local levels. Some public services will be piloted during the initial period to gain experience. We will assign ID codes to enable connection and sharing between organizations and inpiduals.”

The growth of Vietnam’s digital economy has been attributed to Vietnam’s sound IT infrastructure, wide user coverage, and Vietnamese people’s passion for technology. A young and well-trained Vietnamese population of hard-working and quickly adaptable people is the primary factor in the rapid growth of the digital economy.