The world is experiencing the fourth industrial revolution (industry 4.0), which is described in the National Digital Transformation Plan as a huge technological revolution. The fourth industrial revolution is quite different from the previous ones in terms of space, scale, width and depth as it is based on a digital revolution and involves numerous technologies. This may lead to historically unprecedented changes in socio-economic development models and the socio-political systems of countries as well as in trade, investment, and the economic activities of businesses. According to experts, to win the game “Industry 4.0” countries must conduct a digital transformation.
In Vietnam, the entire digital revolution is led by the Government. In other words, the Government is responsible for crafting policies, strategies and orientations for the development of digital transformation and digital economy.
In fact, the Prime Minister has assigned the Ministry of Communications and Information to develop a national digital transformation project and hand it to the Prime Minister for approval by the end of 2019. The project is expected to specify a roadmap for the country’s digital transformation, major approaches to speed up digital transformation in the country, and the responsibilities of Central-level agencies, ministries, sectors and localities for building digital bases and shaping a digital economy.
The Minister of Information and Communications Nguyen Manh Hung recently said, “Digital transformation opens up a big opportunity for Vietnam. It creates a comprehensive change for all enterprises. The information technology companies play the central and leading role in digital transformation in Vietnam. Digital transformation does not need a lot of resources but much endeavor and a breakthrough in thinking.”
Results of a survey conducted by Group IDC in 2018 show that 90% of the surveyed enterprises have already started their digital transformation, albeit at different levels: from studying and researching into digital transformation to carrying out digital transformation. More than 30% of the CEOs of the surveyed enterprises have said that digital transformation is a life-or-death issue for their companies.
According to a study conducted by the Vietnam Software and IT Services Association (VINASA), three sectors that can accelerate digital transformation include information technology (IT) with a readiness rate of 77.3%, finance and banking with a readiness rate of 69.3%, and e-commerce with a readiness rate of 65.5%. In order to develop a digital economy, experts suggest that Vietnam should focus on the development of financial technology.
Vietnam’s advantages in digital transformation
At the end of 2018, nearly 70% of Vietnam’s population was connected to the internet. Miniwatts Marketing reports that Vietnam ranks 13th on a list of 20 countries with the largest populations connected to the internet. Vietnam also ranks 25th among the 39 countries with the largest populations using smart phones (topping Southeast Asia). Vietnam is a country that has seen a sharp increase in the number of smart-phone users (around 18% on average in the period 2015-19). This can be seen as a favorable condition for the country to embark on digital transformation.
As Vietnam is a developing country, it will not suffer a big loss like industrial countries, which have to transform their economies from the existing technological basis into a new one. As Vietnam has a comparatively young population and an increasing number of people connected to the internet, it can have another advantage when conducting digital transformation and developing a digital economy.
According to Deputy Minister of Science and Technology Bui The Duy, digital transformation mainly involves the use of data and digital technology to make a complete and comprehensive change to all aspects of life, which will reshape our socio-economy, our lives, our work and our interactions. Additionally, digital transformation and the development of a digital economy will create opportunities for Vietnamese businesses to make more contributions to national socio-economic development. On the other hand, the process generates challenges and social issues.
The question is how to mobilize people from all walks of life to actively participate in socio-economic development, while maintaining sustainable development and making sure that all demographics make the transition smoothly. To ensure sustainable and inclusive development, Vietnam aims to continuously develop human resources. In addition, the Government gives priority to information and communication technology (ICT) development.
In fact, Vietnam’s ICT sector has enjoyed average growth rates from 20% to 30% per year over the past years.
In 2018, the turnover of the ICT industry reached US$ 98.8 billion and the total value of ICT exports stood at US$ 94 billion. The ICT sector has expanded 16 times over the past decade and become one of Vietnam’s fastest-growth industries. Major ICT companies include the military-run telecommunication and industry group Viettel, VNPT, FPT, CMC and Vingroup.
According to economists, digital transformation can open a door to high productivity, innovation, and strong competitiveness. It also provides an opportunity for countries like Vietnam to keep up with developed countries. Minister of Information and Communications Nguyen Manh Hung at a recent conference said, “Digital transformation serves as an opportunity for Vietnam. If we have appropriate policies, we can catch the opportunity and become a developed nation.”
He also suggested Vietnam should implement three stages of digital transformation. First, Vietnam should accelerate the digitalization of industries and establishment of digital government. At the same time, the Government should encourage businesses to conduct digital transformation in order to raise productivity. Second, Vietnam should highlight digitalization as a competitive advantage at both national and global scales. Finally, Vietnam should successfully build a comprehensive digital economy, foster new digital industries and digitalize all aspect of life.
Translated by Thu Nguyen