What do businesses need for digital transformation?

Investment costs are the number one challenge in digital transformation of enterprises. Source: Internet.

What businesses need most directly

Over the decades, Vietnam has risen to become a country with a fast economic growth rate, with the economic scale forecast to reach 760 billion USD by 2030. Currently, Vietnam is in the top 40 largest economies in the world in terms of GDP and top 20 in terms of trade, with per capita income increasing 43 times from 100 USD to 4,300 USD as it is today.

Speaking at the Vietnam New Economic Forum 2024, Mr. Tim Evans, General Director of HSBC Vietnam, affirmed that for many years, FDI has always been one of the important driving forces in the above remarkable growth, accounting for 4-6% of GDP annually. However, the story of Vietnam's growth does not simply revolve around attracting FDI and exporting.

According to Mr. Tim Evans, recently, Vietnam's economy has seen new drivers emerge, continuing to push Vietnam's growth to new heights. That is the rise of artificial intelligence, machine learning and robotics, which has completely changed the face of many industries, from healthcare to manufacturing and even banking.

Sharing the same view, Mr. Nguyen Anh Tuan, Vice President of the Association of Foreign Invested Enterprises (VAFIE), also said that the new context urgently requires green transformation and digital transformation. “Only that path can help businesses overcome difficulties, strive for sustainable development and successfully integrate with global trends. However, if legal obstacles and barriers are not promptly removed, businesses will be "buried" in the face of new opportunities and challenges. Therefore, what to do and how to successfully transform digitally, thereby increasing connections with FDI enterprises, is a big question for many enterprises, especially small and medium-sized enterprises," emphasized the Vice President of VAFIE.

Sharing from the business community also shows that the internal strength of enterprises is still weak and there are many obstacles and legal barriers that hinder enterprises from reaching new development opportunities. Besides, according to experts, for a long time, the question of how to successfully transform digitally for many enterprises has not had an exact answer.

According to Associate Professor, Dr. Phan Dang Tuat, Chairman of the Vietnam Association of Supporting Industries (VASI), we should not only focus on "beautiful" goals in the effort to pursue digital economy and green economy criteria, but forget the urgent needs of domestic enterprises, including supporting enterprises.

“The important thing is how manufacturing enterprises apply AI, digital, and green so that their goods have a chance to compete? In my opinion, enterprises need the most direct things for their survival. AI, green, and digital need time to ‘enter’ enterprises and ‘enter’ with the most feasible roadmap to combat risks. Enterprises do not look at the story in a macro perspective like experts, but are interested in the direct factors that affect their ability to survive. Green development and sustainable development factors should be integrated in the most feasible roadmap to help enterprises combat possible risks,” analyzed Associate Professor, Dr. Phan Dang Tuat.

To help the Vietnamese business community cope with the above challenges, the Chairman of VASI proposed that experts establish an independent consulting group for two groups of enterprises: small, medium, and large, outlining a detailed roadmap, in which sustainable development and digital transformation factors such as artificial intelligence can be applied to create competitive advantages.

Institutional reform to attract investment in digital technology

According to economic experts, up to now, the application of technology in business administration as well as production - business - distribution is still very limited. Even many business owners are still not fully aware of the role of technology in the context of the digital economy with increasingly fierce competitive pressure.

Giving more information on this issue, Mr. Do Tien Thinh, Deputy Director of the National Innovation Center (NIC), predicted that by 2030, the annual economic impact value of digital technology in Vietnam could reach about 74 billion USD. Vietnam's agriculture and food sector alone could account for about 17% of the economic development opportunities that digital technologies bring. However, AI also brings some challenges to the economy and each business, such as: the disappearance or sharp decline of many industries and business fields; AI will replace many programmers, teachers, actors, marketers, engineers, call center operators...; fierce competition according to the level of AI application in products and services.

“There is no AI strategy that can be suitable for all countries, economies, and businesses, but the basic formula for success is to proactively invest in cloud infrastructure, research on AI applications, and develop data. Therefore, it is necessary to grasp the trend of losing or forming new industries and fields due to AI's impact; it is necessary to identify stages and processes that can apply AI to increase competitiveness, reduce costs; spread AI benefits, promote AI applications in businesses, people, and the public sector...”, Mr. Do Tien Thinh added.

According to a recent survey conducted by the Ministry of Planning and Investment and USAID, 60.1% of businesses participating in the survey said that investment costs are the number one challenge in digital transformation. Therefore, according to Dr. Can Van Luc, BIDV Chief Economist and Director of BIDV Training and Research Institute, said that it is necessary to soon have mechanisms and policies to attract capital for investment in developing the digital economy, green and circular economy, energy conversion, etc. There should be policies and breakthrough solutions for developing human resources and science and technology in the new context; give appropriate priority to developing AI, cybersecurity and choosing a suitable semiconductor industry development model, etc.

In addition, the State needs to complete the policy framework and sandbox mechanism for developing the digital economy, green economy, circular economy and new business models; pay attention to developing the financial market, especially the corporate bond market, stock market, investment funds, venture capital market; derivatives market and carbon credit market.

VAFIE representative suggested that the State has the function of leading enterprises to digital transformation and creating an ecosystem to encourage enterprises to digitally transform. Therefore, it is necessary to quickly build a synchronous digital economic institution, law, and policy, amend and supplement regulations for new business sectors such as e-commerce, digital finance, and digital banking. At the same time, reform institutions to attract investment in digital technology in the direction of maximizing convenience for capital contribution, share purchase, and merger and acquisition activities of digital technology enterprises. Create a favorable environment to promote digital transformation and support business development. In particular, it is necessary to reform administrative procedures so that businesses, especially small and medium-sized enterprises, can easily access business support funds, preferential credit for digital transformation, and establish a number of specialized support funds such as information technology, semiconductor technology, AI, and supporting technology so that businesses, especially SMEs and startups, can apply new technology, train quality human resources, and innovate corporate governance. Encourage the establishment of technology consulting companies and digital transformation services to support businesses, especially small and medium enterprises, in transforming into digital enterprises at reasonable costs for each service package. Strengthen training and human resource development for digital transformation.