Việt Nam’s digital economy to hit $52 billion by 2025

Việt Nam is emerging as the most digital of all economies in the region. — VNA/VNS Photo

Việt Nam’s digital economy will likely reach US$52 billion in value by 2025, according to the e-Conomy SEA 2020report by Google, Temasek and Bain & Company.

With gross merchandise value (GMV) of its internet economy accounting for more than 5 per cent of the country's GDP in 2020, Việt Nam is emerging as the most digital of all economies in the region, the report said.

Last year, the Vietnamese internet economy hit double-digit growth at 16 per cent year-on-year, the highest in Southeast Asia.

The report noted all sectors except travel continued to grow in 2020, of which transport and food, and online media grew 50 per cent and 18 per cent compared to 2019. Only online travel dropped 28 per cent in terms of GMV but is expected to grow 25 per cent by 2025.

“This year’s seismic consumer and ecosystem shifts have advanced the internet sector in unimaginable ways, putting it in a stronger position than ever,” the report said.

Nguyễn Quang Đông, Director of the Institute for Policy Research and Communication Development, said the digital service industry is recording the fastest growth and is suitable with Việt Nam’s strengths with a young population who love technology and social networks.

Digital technology and the digital economy will be key drivers helping Việt Nam increase workplace productivity, escape the “middle-income trap”, and realise the objective of becoming a middle developed economy by 2040, the official said.

Việt Nam’s internet infrastructure and digital payment services remain limited, however, while the country still lacks a legal framework for digital assets, he said, stressing that the legal model of the 20th century no longer suits the digital economy.

Đông also underlined the need to promote international co-operation, especially in building new regulations and enforcing them through legal frameworks for the region.

A study by the Institute for Global Leadership under the US-based Tufts University revealed that Việt Nam ranks 48th out of the 60 countries and territories globally in terms of rapidly switching to a digital economy and 22nd in digitisation development.

Over the last five years, with the boom of smartphones, the internet, and social networks, digital technology and digital transformation have developed rapidly in Việt Nam, shaping a fledgling, dynamic digital economy with great potential.

Việt Nam’s digital economy is made up of four main groups: e-commerce, online tourism, digital communications, and logistics technology.

The country, together with Indonesia, leads in digital economy growth in Southeast Asia.

The two pacesetters are both posting growth in excess of 40 per cent a year.

Việt Nam’s internet economy is also booming, reaching $12 billion in 2020and recording a 38 per cent annual growth rate since 2015.

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

Experts have said that Việt Nam possesses strengths in human resources and Government support, so the country could create a dynamic wave to strengthen the development of its digital economy.

The Party and State have outlined plans to build policies and programmes to join Industry 4.0, focusing on applying and developing science and technology, promoting innovation, and improving the quality of human resources.

Then-Prime Minister Nguyễn Xuân Phúc on December 30, 2020, issued the National Strategy on the Industry 4.0 by 2030, to fulfil the goals set in a Politburo resolution which outlines policies guiding Việt Nam’s active involvement in Industry 4.0.

The strategy’s objectives are to take full advantage of opportunities presented by Industry 4.0 and fundamentally master and broadly apply advanced technologies in different social and economic fields.

Under the strategy, Việt Nam will aim to enter top 40 performers in the Global Innovation Index (GII), the top 30 in the International Telecommunication Union (ITU)’s Global Cybersecurity Index (GCI), and the top 50 in the United Nations’ e-Government Development Index (EGDI) by 2030.

The country also aims to raise the proportion of the digital economy in national GDP to 30 per cent and boost productivity by 7.5 per cent annually on average. Other targets are to achieve universal access to fibre-optic internet and 5G services, completion of digital government development, and the establishment of smart cities in key economic zones nationwide, and connection with regional and global networks of smart cities. — VNS