Economic Sector

Last updated: Wednesday, May 15, 2019


Working out Approach to Digital Economy

Posted: Tuesday, March 12, 2019

Vietnam has many advantages to keep up with the main flow of the digital economy. Currently, 70% of mobile subscribers are using 3G and 4G, 72% of Vietnamese population are using smart phones. This is a foundation for Vietnam to successfully transform from the traditional to the digital economy.

According to Minister of Information and Communications Nguyen Manh Hung, the digital economy uses more knowledge, resulting in faster and more sustainable economic growth. The advent of digital technology spawned new business models, replacing old business models such as Uber, fintech (financial technology). The benefits of digital transformation are shortening many business processes up to 50%, reducing the number of employees. Many automation jobs are deployed.

Head of the Central Economic Committee Nguyen Van Binh said that digital economy and digital society will continue to be major issues at least in the next decade. This is an opportunity for Vietnam. The digitalization helps drive high and sustainable economic growth. It is estimated that by 2022, the digital economy contributes about 60% of global GDP.

However, according to the assessment, Vietnam's economy has been the slowest in this regard among ASEAN countries, although telecommunication infrastructure has developed quite well with wide coverage and Vietnamese people love technology. Vietnam also has young population and adapts quickly to public technology.

In order for the digital economy to develop, according to Mr. Hung, it is necessary to have the government's guidance, and to have a national strategy on digital economy with policies on digital technology, the economy of the Internet must be globally competitive.

According to Mr. Nguyen Van Binh, Vietnam must continue to focus on three breakthroughs: institutions, infrastructure and human resources which can make the digital economy really a new driving force for economic growth in the future.

In particular, institutional breakthroughs are fundamental because good institutions will attract investors and mobilize both domestic and foreign resources. In addition, the continued creation of an attractive business investment environment to attract resources, facilitating the development of production and business activities, and building a legal environment to develop the digital economy are very important things.

At the same time, Vietnam must continue to build infrastructure for economic development such as infrastructure for the industrial revolution 4.0, the technology infrastructure must be one step ahead and prepare for 5G infrastructure. As for electrical infrastructure, as estimated by 2030, Vietnam needs US$150 billion of investment.

In addition, according to Minister Nguyen Manh Hung, Vietnam must pay attention to the re-training process at secondary schools, colleges and universities and even after high schools to train workers for 3-6 months so that workers can join 4.0 infrastructure.

According to Prime Minister Nguyen Xuan Phuc, the 4.0 revolution and the digital economy will be a big trend, opening up opportunities for Vietnam to catch up with developed countries. Therefore, in 2019, the Government will direct the re-evaluation of the socio-economic governance aspects of the Government from central to local levels, with a focus on the governance aspects of the Government. Objectives such as digital government, development tectonic values, integrity are difficult to bring into practice if Vietnam does not reform its old principles and governance model. At the same time, the Government will evaluate the whole real situation and potential of key economic sectors in order to create new resilience for development, in which the Government determines a digital economy to play a dynamic role, a growth driver for Vietnam's rapid and sustainable development goals.

"One of the issues the Government will focus on this year and the next years is to give more priority to science and technology, infrastructure investment, especially smart infrastructure and digital infrastructure to promote and utilize the revolution 4.0. Increasing spending on science and technology, encouraging private investment more for research and development will be a focus of government policy in 2019," committed Prime Minister.

Quynh Anh

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