Digital economy - the future of Vietnam's economic growth

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Connecting and developing the digital economy is an inevitable trend, a driving force for economic growth. Photo: Internet

Commenting on the development of Vietnam's digital economy, according to the World Bank's chief economist Jacques Morisset, Vietnam's digital infrastructure is quite modern, covering all provinces and cities invested by domestic telecommunications companies. Vietnam is also the destination of some of the world's leading information technology companies such as Apple, Samsung and Intel.

This demonstrates Vietnam's competitiveness and creates a special platform for businesses and domestic development units - the model adopted by Japan and Korea in the 1970s, 1980s and more recently in China.

According to the report "Review of Vietnam's economic situation" with the title "Digitalized Vietnam - The Road to the Future" of the World Bank published recently, Vietnam is one of the fastest growing internet economies. E-commerce sales have been growing at a rate equivalent to the growth of world e-commerce sales and higher than GDP growth.

When assessing where Vietnam is in the digital race, the WB said that Vietnam achieved good results compared to similar countries and is even ahead of other countries in some connectivity issues with high rankings for mobile and internet use and advances in business and government use of new digital tools. However, Vietnam's results are relatively low in terms of technology mastery and user protection.

Before the Covid-19 crisis, Vietnam's innovation capacity was around average, but the pandemic has changed the game for the private sector. Many Vietnamese businesses have embraced technology to facilitate remote working and reach customers during social distancing and travel restrictions. Surveys by the World Bank show that the rate of use of digital platforms, e-commerce sites, online social networks and specialized applications increased sharply in response to the Covid-19 pandemic, from 48% of enterprises in June 2020 to 73% in January 2021, the proportion of enterprises investing in digital solutions increased more than 4 times from 5% to 21%.

In particular, businesses and experts say the government's state management capacity has been better equipped to master the digital economy. Resolution No. 17/NQ-CP of the Government issued on March 7, 2019 pointed out the important state management tasks to develop the Digital Government in the 2020-2025 period.

In April 2020, the Government issued Decree 45/2020/ND-CP regulating the provision of online public services on the National Public Service Portal and Decree 47/2020/ND-CP on sharing digital data between public agencies and the private sector. The draft Decree on Personal Data Protection and the Decree on Electronic Identification and Authentication is being consulted and is expected to be issued in 2021, which is expected to create more platforms for the application process and use of digital technology in Vietnam.

The government also stepped up efforts to streamline procedures and provide public services to people through digital means. For example, according to the Ministry of Finance, by the end of July 2021, the total number of administrative procedures of the Ministry of Finance is 895, of which 81 online public services at level 3 and 452 online public services at level 4. Currently, it has connected and integrated 285 of 533 online public services at levels 3 and 4 on the National Public Service Portal, reaching a rate of 53.4%.

Particularly, the General Department of Customs has provided 209 level 4 online public services, accounting for nearly 90% of the total administrative procedures performed by the Customs on information technology systems with nearly 7 million received records.

“Ambition” for digital transformation

Decision 749/QD-TTg dated June 3, 2020 of the Prime Minister on "National Digital Transformation Program to 2025, Orientation to 2030" sets a goal with a vision to 2030, Vietnam becomes a stable and prosperous digital nation, pioneering in experimenting with new technologies and models. The basic goal by 2025 is that the proportion of the digital economy in each industry and field reaches at least 10%; Vietnam is one of the 50 leading countries in information technology.

Expert Nguyen Huu Thai Hoa, Chairman of iBOSSES Vietnam Company, and Vice Chairman of the Strategy Council of VNPT Group, once issued the situation of "digital transformation or death" to affirm the survival of enterprises in the application of technology in the current situation and development trends. According to economic expert Dr. Nguyen Minh Phong, digital transformation is the first transformation of awareness and implementation of digitization of all information assets, restructuring business processes and organizational structure from a traditional environment to a digital one. Moreover, applying digital transformation must depend on the type and size of business.

Of course, for many businesses and regulatory agencies, the transformation to advance to the digital economy is still challenging, but it still needs to be done right away. According to experts, Vietnam is in a relatively good position to achieve its "ambition" for digital transformation, but needs to utilize its strengths and close the gap in weak points to digitize the economy.

Research by the World Bank shows that over 75% of small and medium enterprises, and about 63% of large enterprises, are currently unclear what the return on technology investment is and whether that investment is suitable for their needs. Less than 60% of SMEs reported either lack of information about existing technologies or lack of skills to use technology.

In addition, Vietnamese enterprises also reported that access to financial resources is still limited.

Therefore, Mr. Jacques Morisset said that, in addition to modern infrastructure, it is necessary to ensure the ability to provide a workforce with digital skills. This is a central solution because up to one-third of the existing jobs in Vietnam are at risk of being lost in the next five years due to digitalisation.

Besides, it is necessary to ensure that the domestic private sector is always active, because the innovation cycle in the digital economy is very short. The government needs to ensure competition, have policies in place to reduce barriers to market entry and strengthen regulatory regulation.

In addition, the Government should facilitate access to data and information, in close cooperation with the private sector, and ensure maximum transparency to avoid abuse in both the public and private sectors.