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Economic Sector

Last updated: Thursday, August 16, 2018

 

How Can Local Businesses Adapt Themselves to Fourth Industrial Revolution?

Posted: Monday, May 28, 2018


The Fourth Industrial Revolution is a new concept in Vietnam. This revolution has generated enormous economic, social and environmental impacts at all levels - global, regional and individual, including Vietnam. These impacts bring in positive achievements in the long term, but also pose corrective challenges in short to medium terms. What should local businesses do to adapt and utilise opportunities derived from the revolution?

Opportunity to cut business costs, raise labour productivity
Driven by artificial intelligence and robots with boundless memorising and learning capabilities and interconnected world, the Fourth Industrial Revolution will deliver companies a great opportunity to reduce business costs, increase labour productivity, improve performance and enhance values. Adapting to this revolution will expand their production capacity, innovate products and services, reduce fuel consumption and operating costs and better meet customers’ needs.

From a perspective of manufacturing, in the long term, the Industry 4.0 will produce a very positive impact. The world economy is entering a stage of technology and innovation-driven growth. Based on the digital revolution, the Fourth Industrial Revolution is helping companies present in many industries to enhance their productivity and innovations. Digital technology also enables authorities to better monitor workers' use of technology, raise the performance of human resources by streamlining tasks and raising the productivity of existing elements.

Besides, automation will be enabled in many economic activities. No direct human involvement is needed and transaction costs are therefore almost zero. This grows profitability by scale, stimulates new business models and gives a great advantage for businesses competing with their counterparts.

Before these opportunities, foreign-invested companies with strong technological and financial capabilities have been well prepared for application of core technologies of the Fourth Industrial Revolution, but domestic ones, particularly small and medium-sized businesses, are approaching at the middle level. The latter is prone to a higher risk of being ruled out since they do not have much financial power and place little emphasis on new technological application.

How can local businesses adapt?
To catch up with development trends and make the most of opportunities generated by the Fourth Industrial Revolution, companies, particularly local ones, must change their thinking of development, from quantity-based production to quality-based and value-based production powered by advanced technologies.
They must know where they are in the Fourth Industrial Revolution. This means that they must invest in new production technologies to enhance their competitiveness and strengthen their existence in the market. At the same time, they need to apply scientific and technical advances and information technology to corporate governance.

At present, to adapt to the Industry 4.0 era, many companies in Hanoi, Da Nang, Lao Cai and other localities have focused on developing highly-qualified human resources and expanding advanced technological approach and application into production and administration. Many have initially developed high-tech agriculture, e-commerce and online marketing.

Recently, at a demonstration workshop on Fourth Industrial Revolution: Internet of things - robots - artificial intelligence hosted by the Vietnam Chamber of Commerce and Industry (VCCI) in Hanoi. Mr Dao Ngoc Chien, Deputy Director High Technology Bureau under the Ministry of Science and Technology, said, the ministry adopted many activities and policies on specific supports for every province and city where there is a lot of potential. The ministry is working with experts toward 2025. Core technologies like artificial intelligence, smart robots, 3D printing and blockchain are included to be researched and applied in practice.

Authorities will actively provide policy support but businesses play a decisive role, he said. These are core factors that drive strong growth in the technological application.

Thus, there is no other way for businesses to adapt and utilise opportunities resulting from the Fourth Industrial Revolution but they need active support and approach. They also need to identify and choose sectors and value chains that localities can join based on their comparative advantages, especially in agriculture and tourism - which are prominent advantages of many local enterprises.

Beside efforts and initiatives of enterprises, localities necessarily focus on promoting development, create development breakthroughs, and apply information - communication technology. They also need to develop digitally interconnected infrastructure, and ensure network safety and security for people and enterprises to access digital development opportunities easily and equally.

Thu Ha








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