Digital and Green Transformation: Driving Sustainable Business Development

The concept of dual transformation, which encompasses both digital and green transformation, is an essential trend that the Vietnamese business sector must adopt. This approach presents a plethora of novel business opportunities, while simultaneously contributing to societal and environmental sustainability.

The press conference unveils the annual report on digital transformation

Essential trend

In addition to developing the digital economy, the green economy is also one of the top priorities in developing economies in a complex, unpredictable and challenging world. As in other countries in the region and the world, digital technology and digital transformation are expected to be the driving force to obtain the success of green transformation and realize strategic goals on green growth in Vietnam. This is also considered an inevitable choice and an opportunity for Vietnam to become a pioneering country in the region.

Speaking at the Press Conference on Annual Report on Digital Transformation 2023: Promoting Digital Transformation with Green Transformation recently held by the Enterprise Development Department (Ministry of Planning and Investment) in coordination with GIZ, Mr. Nguyen Duc Trung, Deputy Director of the Enterprise Development Department, said: Recently, the impact of global issues such as climate change and decline in environmental resources has caused many obstacles against businesses. This has created a strong motivation for businesses to transition to a sustainable business model. In that development trend, combining digital transformation with green transformation, also known as “dual transformation”, not only ensures business goals of enterprises but also helps realize sustainable development goals for businesses, the environment and society.

The World Bank's 2023 Report on dual transformation trends also pointed out the connection between digital technology and green technology. In particular, based on research and evaluation of patent data usage, 16 green technologies and 11 digital technologies were selected as the foundation for dual transformation.

Dual transformation is becoming an essential trend of the Vietnamese economy because it is an urgent requirement for the future. Therefore, to unlock the dual development potential of both digital economy and green economy to achieve the goals in the “National Strategy for developing the digital economy and digital society to 2025, with an eye to 2030” and “National Green Growth Strategy for the 2021-2030 period, with an eye to 2050”, Vietnam needs to take drastic and quick measures in this race.

Vietnamese businesses are ready for dual transformation

Measuring the readiness of digital transformation in Vietnamese firms in 2023, the report pointed out that all industries have recorded a significant improvement in digital transformation readiness scoring, all higher than the standard threshold (>2.5), 0.7 - 1.4 points higher than the standard threshold. This showed that businesses of all industries have been deeply aware of the importance of digital transformation as well as actively integrated digital transformation into their development strategies.

Besides, survey data showed that the education and training industry, the scientific and professional industry, the accommodation and food service industry as well as the transportation and warehousing industry all have a significantly increased readiness for digital transformation as compared with the previous year. Remarkably, the education and training industry saw a skyrocketed increase in score, from 2.3 in 2022 to 3.7 in 2023, becoming the sector with the highest score of digital transformation readiness in 2023. On the other hand, the processing and remanufacturing industry almost had no significant change, scoring 2.9, due to barriers in capital investment in infrastructure, machinery and equipment for synchronous digital transformation.

In addition, about 90% of respondents in the survey came from big cities such as Ho Chi Minh City and Hanoi which had advanced level of readiness for digital transformation (with the score above 3.0). This positive sign heralds that businesses are ready for digital transformation in particular and transition for dual transformation in general.

Trung said, to support the business community in dual transformation, the Ministry of Planning and Investment launched the Digital Transformation Support Program for companies in a bid to stimulate companies to adapt to the global digital landscape. In the 2021-2023 period, the ministry coordinated with relevant bodies, domestically and internationally, to carry out many communication activities to raise awareness of digital transformation for businesses.

To date, businesses have clearly improved their perception of the necessity of digital transformation. Many have started data digitization, process standardization and digital application and moved towards digital transformation on a larger scale, more synchronously. At the same time, economic restructuring coupled with changing the growth model to achieve economic prosperity, environmental sustainability and social justice is the crosscutting direction that businesses pursue to achieve sustainable development.

Ms. Nguyen Thi Le Quyen, Enterprise Development Department, the Ministry of Planning and Investment In Vietnam, the advent of digital technology and the ensuing digital transformation are expected to be the catalysts accelerating the transition toward a green economy and the realization of strategic objectives for green growth. The National Strategy on Green Growth for the 2021-2030 period with a vision to 2050, along with the National Action Plan for Green Growth for the same period, have set forth ambitious goals. These include minimizing the ratio of greenhouse gas emissions to GDP, transforming the growth model by greening economic sectors, implementing the circular economy, and promoting economical and efficient utilization of natural resources and energy. This transformation is underpinned by a robust scientific and technological foundation, digital applications, and digital transformation, all aimed at fostering green lifestyles and encouraging sustainable consumption. Despite businesses now possessing an adequate understanding and awareness of digital transformation, the execution of this transformative process remains challenging. Consequently, the presence of supportive policies, programs, and consultations on the digital transformation roadmap, coupled with appropriate application support for digital transformation solutions, is of paramount importance. These measures are essential for businesses to achieve significant breakthroughs in the forthcoming stage. Mr. Trinh Van Bien, Director of Digital Transformation, MISA Joint Stock Company From the standpoint of comprehensive management and application of digital technologies and platforms, Vietnamese enterprises, particularly small and medium-sized ones, are selectively adopting and integrating the most critical components. Hence, with the assistance of the Enterprise Development Department and the Ministry of Planning and Investment at large, we aspire to foster a holistic digital transformation within our organization. In the realm of digital transformation, businesses must also prioritize network information security and data protection. A significant proportion of Vietnamese enterprises currently focus solely on safeguarding a portion of their data, overlooking its potential to generate value in the digital transformation journey. Furthermore, the concept of dual transformation remains somewhat nebulous for many Vietnamese businesses. Current training, coaching, and communication initiatives on dual transformation for businesses are inadequate. In the forthcoming period, it is imperative to boost training on digital transformation, green transformation specifically, and dual transformation broadly. This will empower companies to gain a clear understanding and proactively implement these transformations. Ms. Pham Hoai Anh, Commercial Director of 1C Vietnam Company Digital transformation offers a lot of advantages to our operational and business activities, facilitating enhanced efficiency, cost reduction, heightened product competitiveness, and the inception of innovative business models. 1C Vietnam, committed to aligning with Vietnamese enterprises on their journey toward digital transformation, persistently refines its strategies and pledges unwavering support in their pursuit of sustainable development. This commitment is manifested through 1C’s continuous efforts to update foundational knowledge of digital transformation and advocate for user-friendly encryption platforms. 1C stands prepared to collaborate with the Enterprise Development Department in assisting businesses with their digital transformation endeavors. This is achieved through a price support policy for comprehensive enterprise management software packages (Mini-ERP solution), starting from a modest price of VND40 million, available to up to 50 companies. This software solution provides comprehensive administrative support for small and medium-sized businesses.

By Thu Ha, Vietnam Business Forum