Digital economy offers opportunities for Vietnam to develop

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Banks apply technology to conduct 24/7 online transactions. Photo: H. Diu

Open up great opportunities

Domestic and international studies predict that joining the Fourth Industrial Revolution would bring many positive results to the country's economic growth in the future. According to Minister of Information and Communications, Nguyen Manh Hung, the digital economy opens up great opportunities for Vietnam. Therefore, Vietnam will announce its strategy of national digital transformation, towards a digital economy and digital society, this year. The fundamentals will be emphasized, aiming to be ranked highly in the world – in the top 50 in 2025 and top 30 in 2030.

In fact, domestic ministries and agencies have already been making efforts to improve infrastructure, helping Vietnam to convert to digital successfully. The telecommunications-information technology infrastructure in Vietnam has been built synchronously, with mobile coverage reaching 99.7% of the population nationwide. In particular, 3G and 4G coverage reached over 98% with low fees, while 5G networks have been licensed for testing and are expected to deploy commercially from 2020. Digital technology has been applied in agriculture, industry and services. There are more and more new models of transnational service businesses based on digital technology and the internet. The development of e-government towards digital government has also been implemented with positive results.

Recently, Hanoi broke ground on a smart city project with total investment of nearly USD 4.2 billion. The project will apply many smart technologies with six elements such as smart energy, smart transportation, smart governance, smart learning, smart life and smart economy. It will also apply many modern technologies such as 5G, facial recognition and blockchain technology, contributing to improving all services in Hanoi. In addition, many large domestic technology corporations such as FPT, Vingroup and VNPT have made initial steps in researching and applying AI and blockchain to quickly integrate into global technology development and have seen some remarkable results. Regarding traceability of agricultural products, some of Vietnam’s exported agricultural products such as mangoes and dragon fruits started using blockchain technology a year ago, bringing high values and typical brands of Vietnamese agricultural products.

Low initiative

According to the Head of the Central Economic Commission Nguyen Van Binh, despite certain developments, the level of active participation in Industry 4.0 is still low. The policy institutions are inadequate, and the overall ranking of Vietnam's institutional innovation is still at an average level. According to the assessment of the World Economic Forum, Vietnam reached 50/100 points, ranking 94 of 140 countries in 2018. Moreover, the institutions for digital economy activities, sharing economy and innovation have not been formed synchronously; there is no legal corridor for piloting the application of new products and business services; no system of national standards for the application and development of the foundational technologies; as well as a lack of regulations on database protection, and personal data information.

Moreover, the structure and quality of Vietnam's human resources have not met the requirements – science, technology and innovation have not been the driving force for socio-economic development, the new national innovation system has not yet been established, synchronized and effective; the process of national digital transformation has been slow and many businesses have been passive, the capacity to access, apply and develop digital technology has been low; the digital economy scale has been small; and the fight against criminals, ensuring network security has faced many complex challenges.

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In order to improve the above limitations, Minister of Planning and Investment Nguyen Chi Dung said the Government would deploy three important policy groups. First, applying technology and transforming the public sector governance. Second, supporting and encouraging the application of technology and innovation in the enterprise sector to optimize resource allocation; developing production and business faster, smarter and more effectively; cutting down costs; expanding domestic and international markets; and improving the quality of supply chain management. Third, restructuring and concentrating investment resources to improve the efficiency of science and technology activities and development research, aiming to master a number of specific technologies of the Fourth Industrial Revolution.